Senator Eliot Shapleigh - El Paso, Texas

An internal memorandum from January 2007 provides a glimpse of the effort HACEP Commissioner Jaime Rubinstein made to send a $300,000 parenting services contract to the non-profit drug treatment group Aliviane.

The contract was controversial from the beginning; it has been scrutinized and rejected once by HUD, and a lawsuit filed by former HACEP CEO Pablo Salcido alleges that Rubinstein improperly interfered with the bidding process to secure the contract for Aliviane.

The memorandum obtained by NPT provides more detail about the internal discussions taking place on the board, and Rubinstein's role. It contains a list of suggested bid specifications drawn up by Rubinstein on Jan. 24, the date of an executive session of the Housing Authority of the City of El Paso board, and was attached to a Jan. 25, 2007 email from HACEP attorney Bob Blumenfeld.

One of Rubinstein's suggested bid specifications states flatly that Aliviane's program "will be the only approach considered."

Blumenfeld acknowledged the authenticity of the memo and his responses, in which he wrote that bid specifications cannot by law name a winning bidder and suggests a process to lawfully bid the contract to Aliviane. On Jan. 28, he wrote that "a singl-brand-restrictive (sic) RFP violates most state procurement rules."

Blumenfeld said all he did was offer the commissioners sound legal advice.

"I don’t think there's anything wrong with commissioners commenting on the RFP if they're the ones driving the process. He (Rubinstein) was driving the process," Blumenfeld said.

Blumenfeld said he was troubled by the "release of attorney-client materials," but said that all the memo does is re-enforce what already was known, that "they (HACEP Commissioners) were interested in getting the services of Aliviane."

Rubinstein, reached by telephone, said he would be available to discuss the issue, but subsequently did not return telephone calls over the past several weeks seeking comment. The Housing Authority released a statement Nov. 1 defending the contract process and Aliviane's Dando Fuerza parenting program.

"The contracting decision and process with Aliviane has been reviewed by HUD and our external auditors, and there have been no specific negative findings or violations of the law regarding this matter," reads the statement, which was attributed to Interim President and CEO Arturo Huerta and sent in response to interview requests from NPT. Huerta did not respond to telephone calls seeking further information.

The statement further reads that Aliviane has provided services to 114 families since it began the project in May, and although the program "is in its early stages, it is showing signs of promise."

Aliviane officials issued the following statement:

"Aliviane was approached by many residents of public housing to deliver services to parents at four of the complexes operated by HACEP. After 10 months from the time Aliviane first submitted the proposal, the project finally got funded. As you may be aware, Aliviane went through a very rigorous and technical process before the agency got the final green light. Aliviane went through four HACEP Board approvals, several HACEP committee approvals, and also underwent a review by the Regional HUD office in Dallas before Aliviane received any money. During these 10 months Aliviane was also asked to submit a competitive bid, which the agency did. This proposal went through several processes before Aliviane received any money to run the project. When Aliviane was given the go-ahead, however, it only took the agency 30 days to get the program off and running," the statement read.

Aliviane CEO Chilo Madrid declined to be interviewed, citing pending litigation.

Former Housing Authority CEO Pablo Salcido, who was fired by the board in October, 2006, filed a lawsuit in July, seeking back pay and alleging irregularities in the contracting process, including the involvement of Rubinstein in pushing the board to approve a $300,000 contract with Aliviane for family counseling services. Salcido alleged the Housing Authority had never engaged such a contract before. He declined to comment on the issue.

Rubinstein wrote in an e-mail message to NPT in July that “All discussions regarding the contract with Aliviane were done in an open forum. Please refer to all public records regarding this process. Once you have an opportunity to review the documents, these will unequivocally prove that there was nothing illegal or unethical done by a commissioner nor the process to contract the services. HUD reviewed our actions and did not find any unethical or illegal conduct or actions by a commissioner or HACEP.”

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According to the Aliviane Web site, the Dando Fuerza a la Familia program is "a culturally relevant adaptation of the Strengthening Families Program (SFP) for Mexican American border communities. This program is specifically designed for families that have substance abuse problems, to help children ages 6 to 8 years old reduce the risk of abusing substances, to improve the family environment, and to improve the parents' abilities to nurture and provide appropriate learning opportunities for their children." [dando fuerza a la familiar]

The contract was introduced in August 2006, at a HACEP board meeting. Rubinstein at the time cited residents requesting the program. It was discussed throughout the fall internally and in at least one public meeting, and the contract was awarded. However, at a meeting Dec. 15, Blumenfeld told the board that the contract still needed to be approved by HUD as a sole source contract. [dec. 15 board minutes]

The contract was not approved; HUD told the board that it must be a competitive bid.

On Jan. 24, HACEP commissioners met, discussed the bid requirements in executive session, and in open session voted to require Blumenfeld to create new bid specs. Those bid specs, according to Rubinstein's memo, should specify that HACEP wanted to contract with Aliviane's Dando Fuerza program. [blumenfeld jan. 25, with rubenstein bid specs]

Blumenfeld wrote an email Jan. 25 to procurement director Larry Cano and copied to interim CEO Vince Dodds, both of whom have since left HACEP. In the email, he attached Rubinstein's suggested bid specs, along with handwritten notes.

Where Rubinstein's big specs stated that Aliviane's program would be the only approach considered, Blumenfeld suggested adding "or an equivalent."

"The Procurement Committee wants to review the RFP packets before they are released, and to be the evaluation committee, under your oversight and direction," Blumenfeld wrote to Cano.

On Jan. 28, Blumenfeld wrote to Cano and Dodds, sharing a draft of an email he wanted to send Rubinstein explaining that Rubinstein's suggested bid specs were not legal. [blumenfeld jan. 28 follow up]

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Cano did not return telephone calls seeking comment.

While he would not go so far as to say Rubinstein broke any rules, or even did anything wrong in pushing for the contract, Dodds said: "I think the records will show from meetings dating back to the fall that Commissioner Rubinstein had a definite interest ... that we contract for these family services."

When asked whether he thought the level of involvement by Rubinstein was appropriate, he said, "I don’t think it is appropriate for commissioners to get involved in the details of the bidding process."

Dodds said he felt pressured to complete the contract, and when asked what form that pressure took, he said: "It's phone calls. It's emails. … Even at board meetings to some extent."

Dodds said he had a problem with the "general nature of the relationship between the board and the day-to-day operation of the housing authority.

"My opinion about the healthy operation of the Housing Authority, and really any business or public agency is that the board should be oversight and policy focused, fiduciary focused, and they should hire somebody to be the leader of the organization, give them their strategic direction and suggestions for implementation of their strategic direction and then monitor that as it goes along, and I communicated that to the board," Dodds said. "After I communicated that to them I could see the ongoing approach by the board was to continue with the status quo and that's when I felt I needed to go find something else to do."

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The Housing Authority's July response to Salcido's lawsuit and the questions raised by the Aliviane contract mentioned meetings in August, September, and December 2006, and March and May 2007, when the contract was finalized.

The detailed response also accounts for communications between HUD and HACEP in regards to technical assistance given the local agency in regards to the contract.

But it does not mention the Jan. 24 meeting, when after an executive session the board directed staff to issue a request for proposals. [jan. 24, 2007 board minutes]

The motion was made by former Mayor Don Henderson, who quit the board in disgust in July over what he called micromanaging. [henderson resignation letter] [july 11 npt background]

In his resignation, he blamed the behavior of the board for Dodds' refusal to consider the permanent job of CEO.

"I have never in my Board serving life witnessed such activity from some of the Board members," he wrote. "The second-guessing and undermining was over the top and no one could perform the job as the Director now, or in the future if this activity continues."

Henderson did not return telephone calls seeking comment.

While he made the motion to issue a request for proposals Jan. 24, he initially abstained from voting on the issue. According to the minutes of the Dec. 15, 2006 meeting, "Mayor Henderson said he has been associated with Aliviane since they first got started. He has been involved with them in a lot of different ways. He added he has testified several times on behalf of Aliviane and knows of people who have benefited from their services. Aliviane hired him to set-up their pension and insurance plans; therefore, he has to abstain from the vote."

The minutes also state that Aliviane promised to "provide service to a minimum of 350 families instead of the original 420."

On March 23, 2007, the board voted to approve a contract. The motion was made by Rubinstein, and seconded by Henderson. Then-Commissioner David Escobar abstained. [march 23, 2007 minutes]

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HACEP board member Larry Medina, who served on the board previously, but was not on the board when the contract was approved, said he could not comment on Rubinstein's role in the contract, and said he was not familiar with the Dando Fuera program.

"And it's very important for me at least that before I start making accusations and allegations of fellow commissioners that I have all the facts in my hands," he said.

However, Medina did acknowledge a growing problem in the organization.

"There are a lot of things that are wrong with the Housing Authority," he said. "There are a lot more things now that are wrong with the Housing Authority than there were in my first stint. It's not a secret what I'm saying. The morale is at an all-time low."