NIAGARA FALLS – Stephanie W. Cowart, executive director of the Niagara Falls Housing Authority for nearly two decades, was removed from her position late last week by the Niagara Falls Housing Authority Board of Commissioners and placed on an indefinite paid administrative leave.
Housing authority officials are keeping under wraps what prompted the removal of Cowart during a Thursday special meeting, but a law enforcement source said the FBI is conducting an investigation related to the NFHA.
FBI Spokesperson Maureen Dempsey confirmed agents were in Niagara Falls last week, but said she could not confirm or deny any investigative matters.
Housing Authority Board Chairman Jeffrey M. Paterson said Monday the reason behind Cowart’s removal is something that came to light recently.
He said the board is conducting an internal review and has retained outside legal counsel to assist it. The Buffalo law firm Bond, Schoneck and King, which specializes in labor and employment litigation, has been hired by the NFHA as special counsel, NFHA Attorney Jason Cafarella said.
He and Paterson said they could not comment on whether the FBI subpoenaed records from NFHA.
Paterson said he couldn’t reveal anything about the removal of Cowart but noted the board anticipates a lengthy investigation.
“We are undergoing an internal review that needs to run its course,” said Paterson. “We have no intention of being evasive. We are just operating under the constraints of what we can say.”
He said Deputy Executive Director Patricia Barone will take over day-to-day operations of the housing authority, as she does when Cowart is on vacation.
Cowart did not return calls seeking comment on Tuesday. She has hired the Barnes & Thornburg law firm, based in Washington, D.C., to represent her.
Cowart, who has been executive director of the Niagara Falls Housing Authority since 1997 and has worked for the Authority since 1983, was unanimously given a contract extension in October 2014 that extended her $130,000 a year job through Nov. 30, 2018.
At that time the board met in an 11-minute closed-door session to evaluate Cowart’s performance. When officials emerged, those who spoke issued glowing reviews of her work.
The housing authority had come under fire from federal investigators just a few months before Cowart was reappointed.
In July 2014, the Office of Inspector General of the U.S. Department of Housing and Urban Development said the housing authority did not follow federal regulations and grant requirements in how it used funds to build the Beloved Community, a replacement for the Center Court properties in the North End.
The authority withdrew roughly $1 million more than was necessary for the $30 million, 115-unit first phase of the project, and withdrew about $400,000 more than it needed for the next 100 units, according to the audit. The authority also earned almost $27,000 in interest on those funds.
Cowart denied any wrongdoing and in a written letter to the Inspector General said the housing authority was following all of the HUD guidelines and requirements to the letter of the law.
The authority was ordered to repay the federal government $1.5 million as a result of the investigation. Two years later that recommendation has not been changed, but the payment issue was referred to the HUD deputy secretary for departmental audit resolution for a decision.
The housing authority Board of Commissioners has not commented publicly on this ongoing audit controversy nor said whether Cowart’s recent removal was related to that.
But Cafarella said the case was a “personnel issue” and did confirm that the Hope VI case “had nothing to do with the determination by the board” to put Cowart on leave nor did it involve the newly completed $16.8 million Cornerstone Townhomes which renovated 84 townhouses and 12 buildings in the distressed Applewalk public housing development.
State Comptroller Thomas DiNapoli also criticized Cowart in 2013 for receiving $6,400 in improper stipends and selling back to the authority more unused vacation time than her contract allowed.
Because of the personnel actions, Paterson said the housing authority board, which normally does not meet in the summer, will meet at 4 p.m. on Aug. 9. in its Executive Offices, 744 10th St.