The province’s auditor general has found the former director of public housing in the Halifax area was in multifaceted conflicts of interest involving his own rental properties and government contracts worth more than $1 million.
Auditor general Kim Adair published her office’s latest report on Tuesday, an “Examination of Service Contract Awards” at the Metropolitan Regional Housing Authority (MRHA). That organization, until October 2022, managed public housing in HRM and Hants County.
Adair’s audit found the director of MRHA:
- Awarded a sole source contract for $83,600 to a business
- Sold a property to the owner of that business
- Issued a tender that led to that business being awarded a contract for $996,000
- Sold another property to the business owner
Meanwhile, the director and the business owner were developing a proposal “to build a full-service affordable housing development on three properties,” to be funded by government.
The director, in his capacity as a private landlord, also received tenants’ income support payments from the Department of Community Services between 2011 and 2022 totalling $115,053. He received portable rent subsidies from tenants totalling $4,212 as well.
The director was in a conflict of interest “in many respects,” Adair told reporters on Tuesday.
“There was a clear mixing of the director’s responsibilities in his capacity at the Metropolitan Regional Housing Authority and his private business interests,” Adair said.
Adair said she doesn’t see an inherent conflict in the director being a landlord.
“But in this case, there were rental subsidies being paid to the director, and that is an obvious conflict,” Adair said.
“There’s a personal gain in a mixing of your private business interest with your duties and responsibilities.”
Jamie Vigliarolo and Richard Doyle
The auditors don’t name the director or business in the report. Adair said that’s because her office names names “only when it’s absolutely necessary.” But public records make clear who was involved.
Jamie Vigliarolo was the director of MRHA. The government paid him $129,859 last fiscal year.
Five-Star Security Services won the contract for the provision of security services, valued at $996,000. That company, owned by Richard Doyle, is also associated with Fivestar Bailiff and Civil Enforcement Services.
According to property records, James and Tracy Vigliarolo sold three properties to Richard Doyle. They sold both sides of a duplex at 18 Jackson Rd. in Dartmouth in 2020. In August 2022, they sold 20 Jackson Rd. The sale prices were $102,500, $102,500, and $218,800, respectively.
The auditors note the first two sales at those amounts. The third is not in the report, having occurred after the audit period, which ended June 30, 2022.
The Vigliarolos still own 12 Jackson Rd., along with three other properties in Dartmouth.
Timeline of conflicts
In March 2020, according to the audit, Vigliarolo suggested Five Star should be the service provider for a new “tenant services pilot program.”
“The Director indicated knowing the Owner from a previous private sector working relationship,” the auditors wrote.
“The Director attended preliminary meetings; however, according to management, the Director was recused from the final decision on whether to proceed with the pilot due to a conflict of interest. According to the Director, the conflict was verbally disclosed; however, we were unable to verify whether the declaration took place because the Housing Authority Conflict of Interest Policy does not require a declaration to be documented.”
The pilot ran between April and July 2020. It “focused on addressing tenancy issues through documentation and interaction with tenants to complement the existing security services.” The auditors found no justification for the use of alternative procurement, meaning a sole source contract, in this case.
“Management stated they contacted a few other suppliers; however, we were unable to confirm, as this was not documented,” the auditors wrote.
Five-Star was paid $83,600 for the pilot.
First sale came days after tender posting
On Aug. 1, 2020, MRHA posted a tender for security services. Five days later, according to the audit, Vigliarolo agreed to sell what it calls Property 1 to Doyle. That’s 18 Jackson Rd. (Parcel 40A, the right side of the duplex). That sale closed Aug. 21, 2020.
“We could not find any record that the Director publicly listed the property for sale during this period,” the auditors wrote.
MRHA also issued a separate tender for “tenant services” in August. But the day before the sale closed on Jackson Road, Vigliarolo was involved in a decision to combine the security services and tenant services tenders into one.
Vigliarolo told the auditors he was on a leave of absence for the whole period the tender was open. Adair’s office “found evidence to conclude otherwise.”
“Our investigation revealed the Director was working while the tender was open for bids until the leave of absence began on August 25, 2020,” the auditors wrote. “The Director confirmed direct involvement in approving the two initial tenders for publishing and by participating in discussions related to combining the two into one.”
Asked whether the tender was designed to favour the company, Adair said the auditors didn’t draw that conclusion.
“However, the facts sort of outline how the tender for the tenant services pilot preceded the larger contract, and it was the same company that ended up getting the contract,” Adair said.
MRHA awarded the tender to three bidders on Oct. 8, 2020, totalling $1.3 million. Five-Star Security Services won the majority of the work, $996,000.
Second property sale
“On November 4, 2020, one month after Metro signed a contract with Company A, the Director sold Property 2 to the Owner for $102,500,” the auditors wrote.
That’s 18 Jackson Street (Parcel 40B, the left side of duplex). The auditors wrote that a “conditional sales agreement indicated the property had a closing date of November 30, 2020.” Property records indicate it closed Dec. 7, 2020.
The auditors “could not find any record that the Director publicly listed the property for sale during this period.”
Vigliarolo didn’t disclose either property sale.
In September 2021, Vigliarolo wrote to his superior and declared a conflict involving a plan with Doyle. The two landlords were planning “to build a full-service affordable housing development on three connected properties (Property 1 and Property 2 now owned by the Owner; and Property 3 owned by the Director).”
Property 3 would be 20 Jackson Rd. That property now belongs to Doyle, but during the audit period, belonged to the Vigliarolos.
Director sought government funding for housing plan
Vigliarolo approached the government looking for funding for that plan.
“Our audit work confirms the Director and the Owner sought government funding for the business arrangement from the Department of Municipal Affairs and Housing, the department responsible for housing supports and public housing,” the auditors wrote.
“Senior management within the department confirmed to us that they were approached by the Director regarding the proposed full-service affordable housing development.”
While Vigliarolo disclosed the conflict in this case, the auditors “found no procedures were put in place to address the conflict.”
Vigliarolo also told the executive director about the government money he was collecting from tenants. That disclosure wasn’t documented.
The auditors made four recommendations for government, all accepted. Three of those have already been implemented, according to government, via the new Nova Scotia Provincial Housing Agency.
Following Adair’s June 2022 report, which found public housing was “severely lacking” proper governance and oversight, the government merged the five housing authorities into the agency with legislation tabled in October.
Adair said the findings of the latest audit are an example of that lax governance and oversight.
“I think it speaks to the culture of the housing authorities,” Adair said
Vigliarolo dismissed with other directors
Pam Menchenton is executive director of client services at the Nova Scotia Provincial Housing Agency. She told the Halifax Examiner on Tuesday that Vigliarolo was dismissed in October 2022. The other directors of the former regional housing authorities were let go at the same time.
“We only received the final report and the conclusion of the auditor general this month, so those dismissals took place as a result of restructuring,” Menchenton said in an interview.
Asked about Vigliarolo’s severance, Menchenton wouldn’t comment.
Menchenton said Five-Star Security Services has had its contract extended another year, per an option in the original tender “based on performance.” According to Department of Municipal Affairs and Housing spokesperson Heather Fairbairn, that one-year extension is valued at an additional $996,000.
“The auditor general didn’t identify any issues with the company, and so we have in fact extended. They have an option to extend and they extended for a year based on the performance of the company,” Menchenton said.
There’s a new conflict of interest policy in place, Menchenton said. Employees will have to read and acknowledge they understand that policy, and then review it annually.
Menchenton said she’s not a landlord. But she agreed with the Adair that owning a rental property doesn’t necessarily put a housing authority director in a conflict.
Asked whether the government has contacted police, Department of Municipal Affairs and Housing spokesperson Heather Fairbairn said the matter has been referred to another department.
“We are seeking advice from the Department of Justice regarding possible next steps,” Fairbairn wrote in an email.
With files from Tim Bousquet