A long-standing legal dispute between the Hoboken Housing Authority and one of its former directors was “99 percent” settled in the Authority’s favor a week ago Friday, according to the HHA’s attorney. After almost three years of legal wrangling, the Housing Authority appears to have been vindicated in the way that it handled the termination of former Executive Director Dominick Gallo’s contract. Gallo had been the chief administrator at the agency, which manages 1,353 federally subsidized housing units in the southwest corner of town, for 15 years when he was fired by the Authority’s Board of Commissioners in February of 1997. But Gallo did not go quietly. Three months after he was fired, he filed suit against the authority and several of its commissioners alleging that he had been wrongfully terminated and that he was owed damages. The Housing Authority countered by charging that Gallo should never have been awarded $171,000 for the remaining nine months on his five-year contract, and they asked the court to instruct him to return those funds. At an administrative hearing March 3, Superior Court Judge Arthur D’Italia ruled in favor of the Authority. He dismissed Gallo’s claims against the agency and instructed the former executive director to pay the Authority $92,000, officials said. A handful of claims that the Authority has made against Gallo are still outstanding. D’Italia’s court will hear them on March 29. If he rules in favor of the Authority on all of them, the agency could receive approximately $50,000 more, according to lawyers. “Everyone is very happy with this result,” said Spencer Miller, the HHA board’s attorney. “We feel that all our positions have been vindicated. This sends the message that the Housing Authority will abide by its guidelines.” In front of the judge, Miller argued that Gallo had secured an illegal contract from the Housing Authority, since the U.S. Department of Housing and Urban Development (HUD), which oversees the agency, prohibits executive directors from holding contracts of more than two years. “We also argued that the concept of leapfrogging ahead and buying out the final nine months of his contract was illegal and an improvident act by the Authority at that time,” Miller explained. His arguments were buttressed by a report commissioned by HUD’s Inspector General after Gallo was dismissed, but before he filed suit, which said that the Authority had acted improperly in buying out Gallo’s contract. The IG report recommended that the Authority act to “recapture” the funds it had paid to the former Executive Director, according to Miller. When he was reached at his home after the judge’s ruling, Gallo said he had no comment on the case. The legal tangle was precipitated in part by the untimely death of Gallo’s successor, George McGuire, in 1997. McGuire had been tapped to fill Gallo’s shoes as of January 1, 1996, but when he passed away unexpectedly, Gallo stayed on the job until February, 1997 even though he had already accepted a buy-out package that began on the first of that year. After the commissioners acted to remove Gallo, his position was filled by Interim Director James Scott for most of 1997. Scott was replaced by Alvin Steingold, an executive with a strong background in public housing management in Virginia. Steingold left his post after a year, however, citing differences with the nine-member board of commissioners that oversees the agency. Since then, the post has been filled by Troy Washington, who had been the Authority’s former comptroller. While Washington has ruffled the feathers of some tenants that live in the projects during his short stint with the Authority, he has developed a strong relationship with the board.
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