BRADENTON -- In May, Bradenton Housing Authority acting Executive Director Darcy Branch implied at a board meeting she was the whistleblower who saved BHA from going under because of Wenston DeSue, the former executive director who is now under criminal investigation.
On Tuesday, with the blessing of the U.S. Department of Housing and Urban Development-Office of Inspector General, Branch told the Bradenton Herald she was the whistleblower -- and now fears retaliation from some board members. They blame her, she contends, for criticism they received about DeSue's activities that led to more than $500,000 of debt over two years.
With a national search
for a new executive director resuming, Branch said comments from board members have left her staff concerned about their future, which is why she is coming forward now. Branch said she told BHA board members in May that she was the whistleblower.
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"When has being a whistleblower become such a bad thing?" said Branch. "I want the public to know what we've been going through here and haven't done anything wrong."
The board is scheduled to open applications for the executive director on Thursday.
Branch said she first reported her suspicions about DeSue two years ago to the HUD field office in Miami.
"They came and did an internal audit. About two months later, I was told the case was turned over to the Office of Inspector General," Branch said. "It was at that first meeting that I was told not to tell anyone he (DeSue) was under investigation."
Branch said she also was told that had she not reported what DeSue was doing, she too, would have faced charges.
"So for over a year, this investigator came to my house with questions, and I cooperated fully," said Branch. "It was a very daunting task, and after every meeting I was told again not to tell anyone."
HUD officials, who have not publicly provided updates about its investigation of the BHA and DeSue, did not return a call for comment Tuesday about Branch's disclosure that she was the whistleblower. No charges have been filed in the case.
A critical reaction
Branch said her responsibility was to report questionable activities to HUD first and follow instructions from there. The reaction from board members has not been what she expected.
Long-time board member Lois Gerber has been accusatory toward Branch in recent meetings, saying she should have informed the board that Branch had gone to HUD. Gerber even suggested that Branch should have violated HUD's orders by slipping the board "an anonymous note."
Gerber and other board members have said they should not be blamed, even though they routinely approved documents DeSue submitted.
Gerber did not respond to the Herald's requests for comment Tuesday.
In an email to Branch after the whistleblower revelation, Gerber wrote that Branch's loyalty to HUD made the board look like "fall guys."
Gerber wrote that Branch's actions were "self serving and inappropriate. You protected yourselves and threw us to the wolves. I have little sympathy for you. ... If the board hires you, I will resign."
The board has maintained they had no knowledge of HUD's investigation, but at least one former member knew. Former board member Scott Rudacille, a Bradenton attorney, became increasingly suspicious of what DeSue was presenting to the board and began to make inquiries to HUD as well.
"It was at that point that HUD informed me of the ongoing investigation," said Rudacille, who resigned from the board in January 2013. "After I became aware that the OIG was investigating, I continued to ask to see things from DeSue as a board member and it wasn't happening. I knew at that point, that I couldn't serve on the board any longer."
Branch said the one person responsible for what happened at the BHA is DeSue, and to blame her for following HUD guidelines isn't fair.
"I don't blame the board for DeSue," said Branch. "These are volunteers that are here once a month for an hour, and they have to trust the person in that position to tell the truth and he didn't. I do blame the board for what's happened since and don't feel like it is moving in the best direction. They are letting their personal feelings get in the way of employees who have received nothing but high marks from HUD since DeSue has been gone."
Branch said she has been able to recover half of the $530,000 squandered by DeSue and, for the first time in years, has money for capital improvement projects.
"Why should we be in fear of losing our jobs?" Branch said. "The only reason why this agency didn't go into receivership was the staff and the trust HUD has in them."
Board Chair Napoleon Mills said he was surprised by Branch's disclosure, but he differed from Gerber.
"I would have liked to hear from HUD first," Mills said. "But I have kept an open mind and honestly didn't know it was Darcy. Wow, what a burden she has had to carry through all of this in having to remain silent."
Mills said he hopes to keep the commission on track at Thursday's meeting and still considers Branch to be a contender for the job. Branch has said she would continue to act as both financial director and executive director if hired, at her current financial director salary.
"I have no idea how many qualified applicants we have until we open those resumes," said Mills. "We know what Darcy brings to the table and, if nothing else, the applicants face a challenge because we do have Darcy as the standard to base their qualifications on."
Branch said she sent her concerns regarding Gerber's comments to the city in June and called for Gerber's removal from the board. Mayor Wayne Poston passed the information onto City Attorney William Lisch, who said a board member's opinion of an executive director did not fall under state statutes and city ordinances as cause for dismissal.
Ward 2 City Councilman Gene Brown, the city's liaison to the BHA, said he was unaware of the communications and that Branch had revealed herself as the whistleblower. Brown, who has advocated the board hire a consultant to narrow down the executive director applicants, said he believes that if Branch is an applicant, neither the past nor her status as a whistleblower should be taken into consideration.
"I don't know what any of that would do with getting the job," Brown said.
Brown said the more important matter is HUD's continued delay in informing the BHA of updates regarding the DeSue investigation.
"Are they going to press charges or not? It's been long enough," he said.
Explaining her actions
Branch, who was mentored by former Executive Director William DeSue before the board hired his son, said there was a big difference in philosophies between father and son.
"William's main motto from the day I started 18 years ago was, 'I'm not going to jail for anyone,'" said Branch. "He made sure I undertook all kinds of HUD training to ensure everything was done right. When Wenston was hired, his motto was, 'It's better to ask forgiveness than permission.'"
As financial director, Branch said it didn't take long to realize something wasn't right under the younger DeSue's leadership.
"One of his main objectives was a separation between the board and employees," said Branch. "When he went into a board meeting, he shut the door and there were some questionable things that started happening, like the board approving a budget revision two years ago that included a $530,000 loss and in the same board meeting, the board approved a bonus for him."
DeSue also managed to get a seven-year contract he wrote approved. It included a clause that he could walk away at any time and the BHA would have to pay his salary through the end of the contract, worth about $1 million.
Branch said it was virtually impossible to get the minutes of board meetings from DeSue, but she did witness the board's signatures on everything DeSue presented. Those documents are now in the possession of HUD-OIG investigators.
Branch said the real trouble started when DeSue hired projects manager Stephany West, who became his girlfriend and also is under investigation. Branch said West kept the meeting minutes, which is why it became increasingly difficult for other staff members to see them.
"Then came the part where his wife started calling and harassing staff because of the affair," said Branch. "He called the staff together and threatened them not to talk to his wife. There were fights, lover's quarrels and a hostile environment like you couldn't imagine, but the staff persevered."
After a year of investigation, federal agents raided the BHA in late 2013, seized documents and escorted DeSue and West from the office. As financial director, Branch has drawn criticism for allowing DeSue's alleged financial mismanagement to continue, but she said she had no choice but to remain silent, until now.
"I want the community to know that I did do something about it," said Branch. "And now I'm being retaliated against by some members of the board. I would think people would be happy that this is not happening anymore and we've saved a diving plane from crashing. What's happening to me and this staff is just wrong."
Mark Young, Herald urban affairs reporter, can be reached at 941-745-7041 or follow him on Twitter @urbanmark2014.