Clover Management settles with ex-employee

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Michael Joseph, a major Democratic donor whose development firm specializes in senior housing complexes, has settled a lawsuit brought by a former employee who accused the company of racially discriminatory business practices.

An order dismissing the case was filed in federal court on April 1. The terms of the settlement have not been disclosed.

The plaintiff, Peter Rizzo, claimed in his lawsuit that the Clover Group refused to consider areas with significant Black populations for its senior housing projects. Rizzo recorded Clover Group executives using coded language to describe their reluctance to build in Black neighborhoods, referring to Black people as “Canadians” and significant Black populations as “the Canadian factor,” according to the lawsuit.

You can listen to those recordings in our first story on the lawsuit, in which we found 10 of Clover’s 11 apartment complexes in Western New York were in predominantly white neighborhoods. The company owns or operates more than 50 such complexes in seven states. 

To listen to the audio, click on image and unmute.

The lawsuit alleged that Clover Group companies and its executives:

• “Intentionally engaged in illegal race-based housing discrimination by refusing to develop housing in or near Black neighborhoods.”
• Commented “on the number of ‘Canadians’ or ‘shvartzes’ (a Yiddish racial slur)” living near a potential building site.
• Were warned that their use of racial demographics as a site-selection parameter might violate the federal Fair Housing Act.
• Fired the whistleblower “in a blatant and illegal act of retaliation” after he refused to participate in the company’s “illegal race-based housing discrimination.”

In our first story, we found the average Black population in other ZIP codes where Clover lists senior housing complexes, beyond Western New York, was less than 6 percent, according to U.S. Census data. None of the communities outside Western New York where Clover has developed senior housing has a Black population over 20 percent.

“Clover knows what they’re doing is wrong,” Rizzo told Investigative Post at the time the lawsuit was filed. 

“That’s what really was the saddest part of this. They didn’t bat an eye when I let them know that this is illegal. They know it’s illegal. It’s how they’ve made hundreds of millions of dollars in the last couple of decades.”

We followed that first story with a series of follow-ups covering, among other topics:

• Joseph’s community leadership positions and his big donations to Democrats.
• Taxpayer subsidies directed to Clover projects.
• Calls by elected officials and others for sanctions against Joseph and his company.
• Questions regarding Joseph’s eligibility to serve as chair of Roswell Park Cancer Institute.
• Joseph’s resignation from Roswell’s board the same day we published the previous story.
• A second lawsuit filed by another former employee making the same allegations as Rizzo.

In the second lawsuit, Shane Forrest of Greensboro, North Carolina, claimed Clover fired him after 18 months on the job because “he refused to use race as a site selection factor” in his work. Forrest’s lawsuit was settled in February, the terms undisclosed.

Joseph and his wife, Roberta, are big donors to elected officials, individually and through a constellation of companies controlled by Clover. In aggregate, they’ve given close to $700,000 to candidates and other political campaign committees over the past 20 years — mostly, though not exclusively, to Democrats. 

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The biggest beneficiary by far of the Josephs’ political contributions was Andrew Cuomo, the former governor, to whom they donated more than $222,000. They’ve supported every New York governor over the past two decades, going back to Republican George Pataki. They’ve given more than $62,000 to Gov. Kathy Hochul, as well, dating back to her short tenure as a member of Congress.

Joseph and his companies donated $59,000 to the campaigns of Erie County Executive Mark Poloncarz, including $25,000 last October, eight months after Rizzo filed his lawsuit. Joseph served as chairman of Poloncarz’s transition team after the Democrat was first elected to county executive in 2011.

Joseph has served on the boards of numerous organizations in Western New York, most prominently as the long-time chair of Roswell Park, the state-funded cancer center. A week after the lawsuit was filed — and the same day Investigative Post reported that the Clover president and CEO was a Florida resident, possibly making him ineligible for the post — the governor announced she had accepted his resignation from Roswell’s board.

Both Michael and Roberta Joseph continue to serve on the board of the AKG Art Museum.

Rizzo initially demanded $15 million for back pay and lost future pay, as well as “pain and suffering and punitive damages.”

Neither Rizzo nor his attorney, Nate McMurray, would comment on the settlement. 

The public relations firm Clover hired to handle press relations in the wake of the lawsuit did not respond to a request for comment from Joseph or his company. The company, through that firm, had previously characterized Rizzo as “an angry and disgruntled former employee” whose allegations were “meritless, baseless, and misleading.”

Geoff Kelly