ROSELLE — Mayor Jamel Holley is fuming over the Roselle Board of Education making a $7.5 million health insurance deal with the company associated with former mayor Garrett Smith, who has an indictment hanging over his head for insurance fraud.
“Amazingly, Smith is currently under indictment and facing a prison time for insurance fraud, and yet Donna Obe and Anthony Esposito still chose to award their political ally instead of acting in the best interest of Roselle,” said the mayor Monday in an interview with LocalSource regarding what transpired at 2 a.m. at a recent board of education meeting.
“They did this when no public was present and it’s just not right,” Holley added, explaining the board had a qualified broker aboard that could have saved $300,000 on health insurance but he was let go in lieu of a political connection.
“They didn’t do this the right way and it’s the wrong message to send to taxpayers,” the mayor said flatly.
Holley said that instead of saving money, $300,000 in commission will go into the hands of Smith and Alamo insurance from Hudson County.
It all started last week when Holley heard through an online media source what took place at the board meeting. Livid that something as important as a $7.5 million health insurance contract was not done with thought to taxpayers, the mayor went public informing not only residents but the media.
Holley publicly demanded the board of education rescind the resolution approving the contract with Alamo and begin the process of selecting a health insurance carrier from a well of qualified carriers that were not politically connected to any board member. This started a firestorm of controversy resulting in legal counsel for both sides jumping into the fray demanding retractions or further legal action would follow.
Holley said that while he is aware Obe has political connections to Smith, there is line that should not be crossed when it comes to contractual issues, especially when approval of a resolution takes place at 2 a.m. with no members of the public present.
Holley felt the manner in which the board passed the resolution was an underhanded way of approving an important health insurance contract and four members of the board agreed with him.
They sent a letter to Obe last week asking that the resolution be rescinded because all board members did not have time to thoroughly review the documents involved. The four include Reginald Atkins, Carla Walker, Celeste Sitarski and Archange Antoine. Each signed the letter that explained what they would like done at this point.
“Upon rescinding the resolution we would further establish a fair process for proper review of all requests for qualifications submitted for consideration. This process will include requesting each vendor to make a formal presentation before board members and examining how vendors with RFQ submission compare with the vendor previously providing the service,” the letter indicated.
“As elected members of the Roselle Board of Education, we are entrusted by the parents and the community at large to make quality decisions on behalf of our children and the faculty and staff who serves them. It is our responsibility to ensure tax dollars are not frivolously spent and investments of those dollars are placed in the hands of capable vendors who demonstrate integrity in conducting business practices,” the letter from the four board members said, adding their concern was based on the “recent developments involving Alamo insurance.”
Obe, recently the Real Democrats for Change candidate who challenged Democrat Sen. Ray Lesniak for his state senator seat in the primary and lost, is a political ally of Smith, who was indicted for insurance fraud in January 2011. Smith, who had just announced he was running for a third term, was also indicted for leaving the scene of an accident that took place Dec. 25, 2010.
According to court records, Smith allegedly crashed into a parked car early Christmas morning and then left the scene. Police eventually tracked Smith from traces of automotive fluid that led from the accident scene to his home. The day after the incident Smith moved his car onto the street as a blizzard hammered the area.
Things became complicated legally when the former mayor told police and his insurance carrier that someone else must have damaged his car, suggesting that perhaps a snowplow hit his vehicle. This proved to be unfounded and subsequently, in addition to the other charges, Smith was also accused of was filing a false police report.
Although the indictment still stands, Smith’s trial has been on hold until February. Holley said the Obe and board members should have stayed away from any connection to Smith since there is a wealth of insurance carriers available other than Alamo.
“This blatant political move by the board of education is absolutely wrong and sends a terrible message to Roselle. You deserve to know about it when your tax dollars are misused like this,” Holley said on his public Facebook page, adding “we cannot and will not go backwards to the old days when Roselle wasn’t working for you.”
In the meantime, legal counsel for both sides defended their stance, vowing there would be further legal action if the issues were not resolved immediately.
On July 3 Perry L. Lattiboudere of Adams Stern Gutierrez & Lattiboudere, LLC sent a certified letter to Holley explaining the board of education’s legal right to approve the resolution. He also advised that characterizing the board in a negative light via the media violated the board’s legal rights.
“This letter places you on notice that the factually incorrect and inappropriate characterizations are slanderous and defaming to the identified board members. Thus, your actions may expose you to legal claims in your official and/or personal capacity,” the attorney said, asking for “an immediate formal retraction” of what the mayor said publicly. Not obeying the request, Lattiboudere said, was not an option.
“Failure to do so will require the board of education to take all legally permissible steps necessary to protect the board members you identified in your scurrilous correspondence and published newspaper quotes,” the attorney said. In other words, the mayor would be sued for his actions.
The missive also noted the board used “a legitimate process of requesting proposals from vendors interested in providing services to the district. Lattiboudere pointed out that based on what Holley told residents and the media, the board could prove the mayor intentionally made a false and defamatory statement that showed malice and a “reckless disregard of the truth.”
A few days later John Hudak, a Democratic powerhouse and well known local attorney well versed in municipal and board of education law was retained by Holley.
Hudak immediately fired off a response letting Lattiboudere know where he was legally wrong in his assumptions and just how far he was prepared to go in order to resolve the issue legally.
“You allege Mr. Holley cast board members in a negative light,” Hudak said, explaining the mayor relied on information he saw in an online article published by politicker.com entitled “Obe Resurfaces on Roselle Board of Education with an Aye Vote for New Insurance Contract.”
He also inquired whether the attorney representing the board sent a similar letter to politicker.com.
“Please note that your letter constitutes an illegal and improper attempt to interfere with Mr. Holley’s exercise of his constitution rights and is in effect an attempt at intimidation by your office, the board of education and individual board members,” Hudak went on, adding this was “actionable” under state law.
Hudak also informed Lattiboudere that case law involving personal lawsuits by school board members and paid for by taxpayer dollars was not on the board’s side.
He cited an Elizabeth Board of Education case decided by an appellate court Jan. 18 involving a personal lawsuit bought by former board president Rafael Fajardo and former acting superintendent Pablo Munoz against the school board.
In that case, Hudak said, a lower court decision found personal claims filed on behalf of the two against the board were “improper, not authorized by law and constitute improper use of school funds.” He also noted that the New Jersey Department of Education found such personal lawsuits improper.
To further zero in on how things would go if the attorney for the board members did not back down, Hudak pointed out that the official board of education meeting when the resolution was approved took place prior to the politicker.com article and Holley’s public statements on the matter. This left in question, Hudak said, authorization of board of education financial resources for Lattiboudere’s legal services and public funds used to pay him for work he performed so far.
“Unfortunately, the actions of the board, Board President Donna Obe, board member Anthony Esposito and your office in this matter constitute a clear disregard for well established law, are an improper attempt to interfere with Mr. Holley’s exercise of his constitution rights, in effect an attempt at intimidation,” Hudak said in his letter, adding this left Obe, Esposito, the school district and board “open to legal action to rectify the same.”