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Ousted Housing Authority chief had hired niece without telling board

The recently fired Palm Beach County Housing Authority chief executive had hired his niece as a consultant and employed her for four years before his board members knew about his family connection to her, documents obtained by The Palm Beach Post show.

Housing Authority board members fired Van Johnson on July 29, saying his leadership was marked by “financial malfeasance, gross mismanagement and ethics violations.”

Agency documents obtained by The Post indicate that, in 2012, Johnson hired his niece, Joynicole Martinez, to perform duties that eventually ranged from grant writing and management to assisting with training and assessing the status of projects.

It is unclear how much Martinez received over the years.

An analysis Johnson prepared for the board in 2016 indicates that she got at least $44,000 over the previous four years. But a contract she and Johnson signed on Sept. 30, 2016 — two days after Johnson told the board about his relationship to her and four years after Martinez began working for the housing authority — called for her to receive $7,000 per month plus reimbursement for travel and expenses. And that contract was amended in February to expand Martinez’ duties and boost her monthly pay to $10,000.

One particular area of concern for board members was that, under Johnson, the authority was “carrying nearly $1 million in administrative and consulting fee expenses” during a time when it was struggling to meet payroll, the authority said in a statement announcing Johnson’s termination.

Director waited 4 years

to declare niece’s hiring

Documents show that Johnson, who was hired by the housing authority in 2011, hired Martinez in 2012 to perform consulting work for the Leased Housing Corp., a development arm of the housing authority later renamed The Spectra Organization and led by Johnson.

Four years after hiring Martinez, during a meeting on July 28, 2016, Johnson first told housing authority board members that the consultant was his niece, documents show.

The housing authority, like others across the country, provides direct and indirect housing assistance to residents using money from the U.S. Department of Housing and Urban Development.

HUD’s Office of Inspector General often investigates financial misdeeds of the type the Palm Beach County Housing Authority alleged in firing Johnson. HUD’s OIG would not confirm or deny that it has opened an investigation of Johnson, who did not return a call to his cellphone.

Martinez, whose grant-writing and consulting business is based in Charlotte, N.C., did not respond to a telephone call to her business.

Florida’s governor appoints all members of the housing authority’s board, and Johnson’s contract noted that it fell under state law, which prohibits a public official or employee from employing or promoting a relative, including a niece.

However, a 1996 state ethics advisory opinion issued in a case in which a county housing department head hired a firm run by his niece to provide janitorial services found that the niece is a consultant and not an employee, meaning the state’s nepotism statute would not apply.

Later, the niece became an employee of the department her aunt supervised. The opinion warned the aunt “to avoid the appearance of favoritism regarding her niece’s employment” and that “any other promotions or advances of the niece by the executive director would violate the anti-nepotism law.”

After Johnson told board members about his relationship to Martinez, he agreed to transfer authority of her contract to the housing authority’s general counsel, Lesleigh Varner. Board members then voted unanimously to retain Martinez’s services.

Varner was later made deputy executive director and now, in the wake of Johnson’s termination, serves as interim chief executive.

Two days after agreeing to turn over management of Martinez’ contract to Varner, Johnson signed an agreement with Martinez, and he signed the amendment in February boosting his niece’s pay.

Board Chairwoman Arsalia Byrd did not respond to questions emailed to her by The Post.

Vice Chairman Paul Dumars said Martinez’s oversight of a grant program of particular importance — it pays for housing opportunities for people with AIDS — may have contributed to board members’ reluctance to terminate her consulting contract when they first learned she was related to Johnson.

But board members were not operating with a full set of facts, Dumars said.

“Her contract was never brought before the board,” he said. “We had no knowledge of what we were paying her.”

A “cost benefit matrix” prepared by Johnson said Martinez actually saved Spectra money.

“On average, Spectra would have spent $144,500 for the services provided by Dr. Martinez,” the analysis states. “This represents a cost savings of $100,012.50.”

The analysis showed that Martinez was paid $44,487 for carrying out various tasks from Oct. 18, 2012, through June 29, 2016. Using estimates provided by other consultants, the analysis said Martinez could have charged $144,500 for completing those tasks.

Niece’s website touts

degrees, experience

After firing Johnson, the housing board terminated Martinez’ contract, though documents indicate the agency is still trying to recover $5,300 in computer equipment Johnson purchased for himself and his niece with his authority-issued credit card.

Documents show Johnson had promised to reimburse the housing authority for the computer he bought Martinez.

“We have not been reimbursed to date,” Varner wrote Dumars, when she also noted that he has not returned the computer he bought for himself.

The website of Martinez’ firm, The Alchemist Agency, says she has an undergraduate degree in political science and an MBA in marketing from the College of Charleston, an MBA in international business from the University of Phoenix, a doctor of science degree in clinical counseling from A.T. Still Osteopathic Medical University and a doctor of health science degree in public health from the state institution.

“Her grant writing has won over $110 million toward advancing the community serving missions of her clients,” The Alchemist Agency’s website states. “Joynicole is an experienced local, state, and federal grant evaluator. Over the course of her career, Dr. Martinez has evaluated over 20 grants totaling more than $425 million in grant funding.”

A housing authority document said Johnson told board members about his family tie to Martinez after the Leased Housing Corp. became more closely affiliated with the housing authority.

“Mr. Johnson felt the need to disclose to the PBCHA board, his personal relationship with a grant writer (niece) he hired to do work for the Leased Housing Corporation in 2012,” the document states.

“At the time he hired Dr. Martinez, he was looking for someone to replace the consultant whose contract had expired. Dr. Martinez was serendipitously recommended to him by another executive director.

“At the time of her hiring, Leased Housing Corporation (LHC) was a completely separate entity (affiliate of PBCHA), governed by a separate board of directors and not subject to procurement regulations. Now that LHC is an ‘instrumentality’ of PBCHA (and governed by a mirror board), Mr. Johnson felt the need to be transparent with the board.”

Johnson, the document states, “explained to the board that his decision to retain the consulting relationship with Dr. Martinez was based strictly on expertise and cost benefit to LHC and PBCHA.”

“Mr. Johnson requested authorization from the board to retain the consulting relationship with Dr. Martinez because of her ‘hard to find’ combination of skills, certifications, expertise and cost benefit to Spectra and PBCHA,” the document states.

Even in disclosing his family tie to Martinez, Johnson was not transparent with the board, Dumars said.

“He misled the board on her contract, her payments and the scope of her work,” he said.

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