NJ at its best: Housing Authority chief Mary Jo Grauso gets bonus after serving suspension...

LAKEWOOD — Five months after returning from a 60-day unpaid suspension for giving no-bid contracts to a boyfriend, Housing Authority chief Mary Jo Grauso was awarded a $4,000 bonus Tuesday on top of the standard 3 percent (you godda love it!)

Authority commissioners defended the raise and bonus, which totaled about $7,000, as a reward well-earned by a director whose misstep, while severe, should be put in the context of an otherwise accomplished career. Grauso's base salary is now $109,545 annually.

"We are a very high-performing agency that has succeeded in many areas we've never ventured into before, and it's because of the leadership we've had," Audrey Wise, authority chairwoman, said Wednesday. "How many times are we going to make her pay for her indiscretion?"

Still, the bonus, given after a performance evaluation, struck some as inappropriate, especially in light of the agency's history of controversy. Grauso's predecessor, Meir N. Hertz, stepped down as executive director six years ago following charges of income tax invasion, to which he pleaded guilty.

"Overall, Mary Jo has done a good job over the years, but she made a serious lapse in judgment and it sends the wrong message to now award her with a bonus," Mayor Raymond Coles said.

Township Committeeman Charles Cunliffe said he was surprised Grauso maintained her position after the violation, and was "shocked" to learn of the raise. The Township Committee appoints six of the seven commissioners but has no further control over the authority. The seventh member is appointed by the governor and is currently vacant.

One dissenting vote

In May, Grauso was suspended without pay for allowing her then-boyfriend, James Castaldo, and his Toms River construction company to continue refurbishing housing units managed by the authority after the cost of the work surpassed the $21,000 threshold after which competitive bids must be sought. Grauso, who served her 60-day suspension intermittently, returned to her authority post full-time in October.

Five commissioners voted unanimously Dec. 21 to approve the bonus. On Tuesday, the board put the bonus into effect, retroactive to Oct. 1. Marta Harrison, who was absent at the December meeting, was the only commissioner to cast a dissenting vote Tuesday.

"The violations leading up to the suspension were serious, and when taking them into account, overall a merit-based raise was inappropriate," Harrison said.

In the coming weeks, the Inspector General's Office of the U.S. Department of Housing and Urban Development, which funds much of the authority's operations, will also be investigating Grauso's actions, according to Coles, who said he spoke with a HUD official.

Rene Febles, the inspector general's special agent in charge in Newark, said he could not confirm or deny an investigation.

Grauso could not be reached for comment Wednesday.