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HUD Rent Arrangement With Segarra's Spouse Draws Attention

Jon Lender

April 10, 2011

Hartford Mayor Pedro Segarra's spouse, Charlie Ortiz, collects about $2,000 a month in federal Section 8 rent subsidies as the landlord for low-income tenants under a "housing choice voucher program" administered locally by the city, public records show.

Ortiz has received more than $120,000 through that arrangement in the nearly five years since May 2006, when Segarra became a city councilman. Segarra ascended from council president to mayor last June when predecessor Eddie Perez resigned after his conviction on corruption charges including bribery and extortion.

The situation raises at least a couple of questions: Does Ortiz's arrangement amount to a city contract? And, if so, was it proper for Segarra not to disclose the arrangement on annual statements of financial interest that he has filed in recent years with the city's ethics commission?

The questions do not arise in a vacuum. They have been fueled by a far-reaching Freedom of Information Act request filed more than three months ago by Derek Donnelly, a former legislative aide to Perez who now supports Rep. Kelvin Roldan, D-Hartford. Roldan has been considering a campaign against Segarra in the city's mayoral election this year.

Among the many documents Donnelly obtained were city records of payments to Ortiz of federal Section 8 rent subsidies for two tenants in apartment units he rents, at 27 and 29 Wolcott St. The payments vary, but recently the typical amounts have been $1,216 and $805 per month. After hearing of Donnelly's FOI request, The Courant asked the city for the same documents that he obtained, and this column is based on those.

Asked about the federal rent subsidies paid to Ortiz, Segarra said in a recent interview that the arrangement is routine for any city landlord who rents apartments, that he had nothing to do with setting up the arrangement and that it predated his service on the city council. Segarra said that the rent-subsidy payments are only a small part of the real estate business that Ortiz runs independently of him, and that neither of them ever has tried to conceal the arrangement.

On the other hand, Segarra has responsibilities as a public official to disclose on his annual ethics disclosure forms any financial interests, direct or indirect, he has in a business dealing with the city. He said, after being asked about the situation by The Courant, that he would make inquiries to determine what actions he should take or disclosures he should make, if any.

It is possible that HUD rules also may come into play, although that was unclear last week. HUD has conflict-of-interest regulations that apply to any locally administered program of rent subsidies paid with federal funds under the Section 8 program. Those regulations prohibit any interest by, or financial benefit to, "an "immediate family member" of any public official "who exercises functions or responsibilities" with regard to a city-run Section 8 program such as Hartford's.

Segarra listed Ortiz as his "spouse" on his city of Hartford ethics disclosure forms for 2006 through 2009. His 2010 form is due next month. Segarra and Ortiz were married under Connecticut's same-sex marriage law last year just after Segarra became mayor. Previously, they had been in a legal civil union.

A spokeswoman in HUD's Boston regional office declined comment last week when asked whether her agency's federal conflict-of-interest rules would apply to Segarra and Ortiz.

The question applied to Segarra as an official who may exercise sufficient influence over the city's administration of federal rent subsidies that fall under the rules, and to Ortiz as a potential "immediate family member" in HUD's view. That latter point could depend on whether the federal government recognizes same-sex marriages under Connecticut law.

"This matter is being reviewed by HUD," said spokeswoman Rhonda M. Siciliano, adding, "we cannot comment until that review is completed." The review is being conducted because The Courant asked about the situation.

But Siciliano was not hesitant to talk in general terms about the contractual relationship between landlords and any city that runs a federal local rent-subsidy program. In an e-mail to The Courant, she had said there is indeed a contract between a landlord and the city — if that landlord rents an apartment to a low-income tenant under the HUD Section 8 "voucher" program administered by city housing officials.

That is the arrangement under which Ortiz has received the federal rent subsidies through the city.

Under the Section 8 program, a qualifying low-income tenant is issued a voucher that he or she can take to a landlord to rent an apartment. If the local housing agency — in this case, the city — determines that the apartment meets the standards of the program, it approves the rental arrangement under the federal program. The tenant generally pays a small portion of the rent, with the rest supplied by the federal government to the city, which pays the subsidy to the landlord.

Segarra said it never occurred to him that Ortiz's receipt of federally funded rent subsidies through the city might amount to a city contract that he should have disclosed on his mandatory city ethics disclosures.

But the city's ethics disclosure form requires a public official to disclose any contracts held by him or a "business with which [he is] associated." It defines such a business as one involving a member of the official's "immediate family," including a spouse — which, again, is the designation he gave to Ortiz on the forms.

Donnelly, the Roldan supporter and former Perez aide, declined comment Friday on his reasons for requesting the information.

In addition to records of any city payments to Segarra and Ortiz, Donnelly's FOI request also covered statements for Segarra's city credit card and city permits for the installation of an expensive fence at the Ortiz-owned house on Prospect Avenue where Segarra and Ortiz live. Donnelly, a Suffield lawyer, said he has filed a complaint with the state Freedom of Information Commission, claiming city officials did not fully comply with his FOI request, adding that he believes that he should not comment while the case is pending.

Among Donnelly's allegations to the FOI commission is that city officials didn't provide him with documents from Imagineers, the company that handles the rent-subsidy program under a contract with the city's housing division.

Segarra has touted the "transparency" of his administration, and has said he realizes that full disclosure of his financial interests is important. In his recent interview, he said he has borne in mind that allies of Perez have been digging into the backgrounds of both him and Ortiz, so he has been careful to disclose all information that might be significant. "It would have served no useful purpose for me to withhold the fact that [Ortiz] had Section 8 tenants," he said.

"I do recognize that other folks are trying to create some implications," he said, without mentioning the names of Donnelly or anyone else. But he said it didn't occur to him that Ortiz's participation in the federal housing program for such a small a number of tenants would count as a city contract that he needed to disclose, or that others might question.

"I'm not used to thinking like that because I don't have a corrupt mind," he said. "I have to start learning how corrupt people think so I can protect myself."

Donnelly declined comment on that statement by Segarra Friday.