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Mysterious Memo Surfaces

September 21, 2006

A memorandum that appears to lay out a comprehensive agreement between the Hartford Housing Authority and Meriden developer Salvatore Carabetta surfaced Wednesday, raising new questions about relationships at the heart of a lawsuit alleging bid-rigging and corruption.

The document, dated July 31, 2002, appears to give Carabetta and his partnership, SOC Group Inc., a strong hand in an effort to modernize public housing in Hartford's North End. It assigns his company responsibility for drafting a plan, raising money, choosing architects and pushing forward several projects aimed at replacing the city's aging housing developments.

But the memorandum, the existence of which has been rumored since ousted Executive Director Lancelot Gordon Jr. filed a federal suit last week to get his job back, was characterized Wednesday by many key players as something of a mystery.

Officials say they've never seen an original copy.

No one seems to know who wrote it.

And the official whose signature appears on at least one circulating version of the document said he never signed anything.

"I don't know where the damn thing came from," John D. Wardlaw, Gordon's predecessor as executive director, said Wednesday.

Wardlaw said he was stunned when authority officials confronted him about the document.

"I told them point blank ... that this document is bogus, I'm not involved in it, I wasn't aware of it, and they acknowledged that, and I walked out," Wardlaw said. "Come on, not only is it not something I could sign, it is something I wouldn't sign."

Carabetta, whose signature also appears on the memorandum, could not be reached. Repeated calls to him Wednesday and during the past week have not been returned.

The relationship between Carabetta and the authority is a key element of a federal lawsuit filed last week by Gordon, the ousted executive director. Gordon, 58, was fired after less than a year by the authority's board of commissioners over allegations that he failed to follow the authority's procurement policy in connection with nearly $11,000 in financial transactions.

But Gordon claims in the lawsuit that he was fired because he was trying to uncover entrenched corruption at the agency.

Among several allegations, Gordon claimed in the lawsuit that authority board member Angel Arce invited him to a July 2004 meeting with Carabetta at the Olympia Diner in Newington, and tried to persuade him to help steer the $300 million redevelopment project at Westbrook Village and Bowles Park to Carabetta.

Arce has denied that the Olympia Diner meeting ever took place, or that he tried to push for Carabetta. Arce declined to comment Wednesday on the controversy surrounding the memorandum.

Two Projects

The agreement dates to the summer of 2002, when the authority was working to select a developer for two projects: the rebuilding of Dutch Point and Nelton Court.

According to meeting minutes and officials familiar with the talks, there were two finalists: The Community Builders of Massachusetts, and SOC Group Inc. - a partnership between Carabetta and Sheldon Oak Central Inc., a nonprofit housing developer in Hartford. The choice rested with a committee of authority officials and neighborhood representatives.

But with the panel divided, the developers agreed to split the two projects, according to officials and minutes from meetings. The Community Builders would do Dutch Point, and SOC Group Inc. would do Nelton Court. To consummate the deal, memorandums would be finalized with each developer.

But the mystery memo that resurfaced Wednesday goes beyond Nelton Court.

It did lay the groundwork for that project, as well as a $7 million plan for SOC Group Inc. to build the second phase of a new project at Stowe Village.

It also appears to spell out a more far-reaching vision for improving public housing, "deconcentrating poverty," relocating residents, and "transforming the market of the neighborhood" on the north side of Hartford, including the planned $300 million redevelopment of Westbrook Village and Bowles Park.

"We wanted to do not only Nelton Court, we wanted to do a complete redevelopment," Daniel O. Merida, head of Sheldon Oak Central, said of his company's interest in beautifying and building a larger part of the city's North End.

Merida said his interest was in Nelton Court, and Carabetta's interest was in Stowe Village. But together they had an interest in the city as a whole, he said.

"I didn't want to do one building in Nelton Court, like Nelton Court is an oasis," Merida said. "I wanted to do the right thing, which was to redevelop block by block."

In the end, the SOC Group Inc. and Carabetta did not win contracts to rebuild any of the projects outlined in the memorandum. The second phase of Stowe Village was awarded to a Hartford company; a Massachusetts developer has been selected to rebuild Westbrook Village and Bowles Park; and the authority is still in the process of selecting a developer for Nelton Court.

Merida said he was aware of the document.

"Of course I've seen it," Merida said. "I gave input. I know that Sammy [Salvatore Carabetta] signed it because it was something that was very exciting."

'It Just Showed Up'

Others were far less clear about the memorandum or its significance.

Gordon said Wednesday that sometime around May or June 2005 the memorandum "popped up" in his office in an interoffice envelope with his name on it, but no clear indication of who left it there.

"It just showed up," Gordon said. "I was looking at this thing and saying, `What the hell is this?' "

Gordon said he recalls reading the document with amazement, unable to believe what he was seeing. He characterized it as another example on a growing list of possible improprieties he was finding at the authority.

"It was basically someone selling our whole house," said Gordon, who was appointed interim executive director shortly before the memorandum arrived on his desk. "It made no sense at all, because these things have got to go through a competitive process."

Gordon said he then tried to determine the document's origins. He took it to Loo Pacacha, the agency's attorney, who had only been hired a few weeks earlier.

Pacacha said Wednesday that she remembered the visit, saying it happened sometime in June 2005. She said she told Gordon that, because she was new to the agency, she had never seen the document before and would need time to review it; the document Gordon brought her, Pacacha said, had no signatures.

"We were trying to piece together what happened, and there wasn't a lot of information," Pacacha said Wednesday.

Still answerless, Gordon decided to call Carabetta and was told that "the person who knew about it was on vacation." But a week after that phone call, Gordon said, the company sent him a copy of the memo. That one, unlike his own copy, had two signatures - Wardlaw's and Carabetta's.

Gordon said his next step was to set up a meeting with Wardlaw at the Gold Roc Diner in West Hartford to ask the former executive director about the memo.

On Wednesday, Wardlaw reiterated what he says he told authority officials when asked about the memo:

"I have told them, I have absolutely no knowledge, no nothing, as it relates to the content of that document," Wardlaw said. "That thing read as if there had already been decisions made, that there was no bid process. ... It just looked like something that, I don't know, I knew I couldn't do it.

"I was involved with a lot of things, and one of the things I did not necessarily get heavily involved in was awarding contracts like that," Wardlaw said. "I had a committee that would always look at that kind of stuff, and they would recommend something to me. But I don't recall that at all."

Rudolph Arnold, who was then the authority's legal counsel, said Wednesday that such a memorandum would have been brought to his attention, but he had no recollection of any such document.

Courtney Anderson, the authority's board chairman, said the panel was puzzled. "Among the commissioners, the first question was, was this real, did someone in-house produce this [memorandum of understanding]? Did Carabetta write this MOU? Was it a real arrangement between John Wardlaw and these guys?" he said.

"After the board talked to Mr. Wardlaw, we came to the conclusion that this thing ain't real; we turned it over to legal counsel. Then Carabetta also got legal counsel, and it's been a legal issue since."

Letter To Pacacha

For all the disavowals, documents obtained by The Courant indicate that in 2005 Carabetta had a lawyer - who is now a Superior Court judge - meet with Pacacha in an effort to get the authority to recognize the developer's rights concerning the redevelopment of city housing projects.

The lawyer, Robert G. Gilligan, who was appointed as a judge earlier this year by Gov. M. Jodi Rell, followed up that meeting with a letter to Pacacha on July 13, 2005, saying it was "important to communicate my client's position at this time, which is that the agreement is valid and binding ... ."

Gilligan, who could not be reached for comment Wednesday, wrote that Carabetta had rights under the agreement concerning not only the Nelton Court and Stowe Village projects, but also the Bowles Park and Westbrook Village projects. He concluded that it was "imperative that this matter be resolved" before the authority went forward to solicit bids on Bowles Park and Westbrook Village. But Pacacha dismissed those claims in a letter to Gilligan two weeks later, saying that "all obligations and expectations between the parties regarding this issue are ... terminated."

As the controversy over the memorandum unfolded Wednesday, there were several new legal developments.

Hartford Mayor Eddie A. Perez announced that the City Audit Commission will coordinate its investigation with the inspector general's office of the U.S. Department of Housing and Urban Development.

Also Wednesday, state Attorney General Richard Blumenthal said his office also has begun a preliminary investigation into Gordon's corruption allegations.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
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