(Times-Tribune (Scranton, PA) Via Acquire Media NewsEdge) Feb. 16--The president of a Moosic construction company raided by federal agents last week sat on the board of Catholic Social Services when it planned a veterans apartment complex -- a job for which his firm was awarded a more than $100,000 no-bid contract.
Vincent Martino and his former partner, John Palumbo, formed Palumbo Construction Management in March 2008, corporate records show.
Nine months later, the firm, which has since been renamed PCM Construction Management, was hired as construction manager for a $2 million project to renovate St. Hedwig's Church in Kingston into a 12-apartment complex for veterans, a review of records shows. The contract called for PCM to be paid 5 percent of the total construction cost.
The Diocese of Scranton's Catholic Social Services entered into the contract despite a provision within two federal grants it received that prohibits anyone with ties to the grant recipient from benefiting financially from any project funded by the grants.
Records obtained from the Luzerne County Office of Community Development, which administered one of the grants, show Catholic Social Services was awarded a total of $769,022 from the federal Department of Housing and Urban Development: $400,000 from the Home Investment Partnership Program, which was paid through Luzerne County, and $369,022 from HUD's Continuum of Care Program. The grant programs are both designed to reduce homelessness.
Both grants contain a "conflict of interest" provision that states no person "in a position to participate in the decision making process, or gain inside information with regard to these activities, may obtain a financial interest or benefit" from projects assisted by the grants. The grants also say that a person may not have an "interest in any contract, subcontract or agreement ... either for themselves or those with whom they have a family or business ties during their tenure or for one year thereafter."
Mr. Martino was a member of the Catholic Social Services board of directors from September 2004 to March 2009, according to Bill Genello, spokesman for the Diocese of Scranton.
That coincides with the dates his company was awarded the construction manager contract. The initial contract signed on Dec. 2, 2008, called for the firm to be paid 5 percent of construction costs, plus 4 percent of cleanup costs. That contract was later replaced by a new contract signed on Dec. 4, 2009, that eliminated the 4 percent cleanup costs.
FBI agents raided PCM's offices on Glenmaura National Boulevard in Moosic on Feb. 6. Spokesmen for the FBI and U.S. attorney's office have declined to reveal the nature of the investigation. Efforts to reach Mr. Martino and his attorney, Brigid Carey, were unsuccessful.
The Diocese of Scranton confirmed the agencies are investigating the St. Hedwig's project.
Mr. Genello said the diocese is cooperating with the investigation and does not believe any official from the diocese is the target of the probe. Mr. Palumbo, who sold his interest in the construction management company to Mr. Martino in July 2012, said federal agents in December subpoenaed records from his architectural firm, Palumbo Group, relating to the St. Hedwig's project as part of a grand jury investigation.
In a phone interview Thursday, Mr. Palumbo said neither the construction management contract nor the architectural contract awarded to the Palumbo Group were bid out.
Mr. Genello said none of the contracts associated with the project was required to be bid under state law. He said Palumbo Construction Management was chosen for the job because John Palumbo had previous experience with other community projects.
Al Flora Jr., a Wilkes-Barre attorney familiar with public bidding requirements, confirmed the diocese would not be required to bid out the projects because it is a private, nonprofit body. The fact it paid part of the cost with public money would not matter unless the grants specifically stated contracts must be put out for bid.
Mr. Flora, who is not involved in the St. Hedwig's investigation, said even if it were determined Mr. Martino had a conflict of interest, that would not necessarily be a crime. The matter may only be a civil issue involving enforcement of grant regulations.
The $400,000 Home Investment Partnership grant involved in the St. Hedwig's project has a provision that allows HUD to rescind all or part of a grant if the recipient violates regulations of the grant.
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