Los Angeles County Dist. Atty. Steve Cooley has opened a conflict-of-interest inquiry into Mayor Antonio Villaraigosa’s top appointee at the city’s housing authority, officials said Monday.
Cooley’s Public Integrity Division is trying to determine whether housing authority board President Beatriz Stotzer violated state laws as a result of her private work for New Capital LLC, a company that manages apartments for affordable housing developers, Deputy Dist. Atty. Max Huntsman said.
Meanwhile, the federal Housing and Urban Development Department, which provides most of the housing authority’s $1-billion annual budget, confirmed that it was conducting its own review of Stotzer, who also serves as president of New Economics For Women, a low-income housing developer.
James Todak, special agent in charge of HUD’s office of inspector general, said his agency was “aware of the concerns about whether Stotzer owns or manages” properties that receive federal rent subsidies and was working with the housing authority to “address the issue.” Todak declined to comment on specifics but noted that, according to HUD policy, housing authority board members are “not supposed to” own or manage so-called Section 8 properties.
Both inquiries are examining Stotzer’s multiple roles. She is president of the city’s public housing authority, which distributes federal rent vouchers, while also serving as the unpaid board president at New Economics and another nonprofit group, West Valley Community Development Corp. Both groups develop affordable housing.
Complicating matters further, Stotzer is also chief executive at New Capital, which performs work for, and is partly owned, by New Economics for Women.
Cooley’s inquiry into Stotzer was launched in response to a private complaint. An inquiry is pursued to determine whether prosecutors have enough evidence to suggest that a crime may have been committed.
Huntsman said the living arrangements of Stotzer’s two sons also are “potentially of interest” to prosecutors. The sons occupy units in a San Fernando Valley affordable housing project developed by New Economics for Women.
“We’re still trying to sort it out,” Hunstman said. “We’ve heard a lot of information, but the devil is in the details with conflicts of interest — who had what financial interest with whom.”
In a statement, Villaraigosa said his aides were looking into the issues involving Stotzer. “If we determine wrongdoing occurred, we will take swift and appropriate action,” he said.
Stotzer’s lawyer, Stanley L. Friedman, said Stotzer had conferred with city lawyers in the past about possible conflicts and had “disclosed whatever needs to be disclosed.”
“To the extent that she’s ever needed to recuse herself, she’s done so,” he said.
Villaraigosa named Stotzer to the housing board in 2005. The agency oversees both management of public housing projects and distribution of Section 8 rental vouchers. All told, the agency is responsible for sheltering about 60,000 of the city’s neediest families.
In disclosure forms filed with the city, Stotzer said she earned more than $100,000 in 2010 as chief executive of New Capital. That entity paid Stotzer $150,000 in the fiscal year that ended June 2009, according to state documents.
Records show that Stotzer’s sons, Antonio Stotzer and Nicolas Stotzer, live in separate subsidized units at Tierra del Sol, a 119-unit project that opened in Canoga Park in 2005. New Capital screened their tenant applications and determined that both men were eligible to live there, said Roberto Lara, a lawyer for New Capital.
“I can tell you that their household incomes were substantially lower” than needed to qualify for assistance, he said.
Lara said Stotzer was not involved in the screening of her sons’ rental applications. Meanwhile, housing authority spokesman Fred Muir said the agency had not provided any Section 8 housing vouchers for Tierra del Sol.
Muir said that the housing authority did provide Section 8 vouchers for three apartment units managed by New Capital for the nonprofit group West Valley Community Development Corp., where Stotzer serves as board president. Stotzer did not know of those units until January and, upon learning that information, informed both the housing authority and its lawyer, Craig Takenaka, Muir said.
“He was basically saying he didn’t see a problem with it,” but said Stotzer should recuse herself if the matter ever came up for a vote, Muir said.
Stotzer’s multiple roles in the affordable housing industry were first reported last month by KCBS-TV Channel 2. She was also named in a lawsuit that alleges that New Capital had allowed West Valley Hart, an apartment building it manages in Canoga Park, to become unsafe, unsanitary and “in gross violation” of health and safety laws.
Lara, New Capital’s lawyer, said those allegations lack merit.
The district attorney’s inquiry comes at a time of turmoil for the housing authority. The agency’s onetime executive director, Rudy Montiel, was fired this year after eviction notices were sent to nine housing authority tenants who had picketed outside his home.
Montiel alleged that some board members had received thousands of dollars in “double dipped” costs and travel expenses submitted without receipts or authorization. Huntsman said his office would also look into those allegations.