Public Hearing - September 25, 2020
1 BEFORE THE NEW YORK STATE SENATE
STANDING COMMITTEE ON HOUSING, CONSTRUCTION, AND
2 COMMUNITY DEVELOPMENT
AND
3 STANDING COMMITTEE ON INVESTIGATIONS AND
GOVERNMENT OPERATIONS
4 AND
NYS SENATE STANDING COMMITTEE ON CONSUMER PROTECTION
5 ----------------------------------------------------
6 JOINT VIRTUAL PUBLIC HEARING:
7 TO EXAMINE AND IDENTIFY WHETHER AND HOW POTENTIAL
HOMEBUYERS OF COLOR SUFFER ILLEGAL AND UNEQUAL
8 TREATMENT BY REAL ESTATE AGENTS ON LONG ISLAND
9 ----------------------------------------------------
10 Date: September 25, 2020
Time: 10:00 a.m.
11
12 PRESIDING:
13 Senator Brian Kavanagh, Chair
NYS Senate Standing Committee on Housing,
14 Construction, and Community Development
15 Senator James Skoufis, Chair
NYS Senate Standing Committee on Investigations
16 and Government Operations
17 Senator Kevin Thomas, Chair
NYS Senate Standing Committee on Consumer Protection
18
19 SENATORS PRESENT:
20 Senator James N. Tedisco (RM)
21 Senator Philip M. Boyle
22 Senator James Gaughran
23 Senator Anna Kaplan
24
25
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1
SPEAKERS: PAGE QUESTIONS
2
Bart Cafarela 5 22
3 Real-Estate Broker
Reza Amiryavari
4 Real-Estate Agent
Joseph Jannace Real-Estate Agent
5 Margaret Petrelli
Real-Estate Agent
6 Realty Connect USA
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3
1 (This date's joint virtual hearing is a
2 continuation of the hearing held on September 17,
3 2020, which the co-chairs declared was on
4 temporary recess, but was not adjourned.)
5 SENATOR SKOUFIS: Good morning, everyone.
6 I'm Senator James Skoufis, chair of the
7 Investigations and Government Operations Committee.
8 I'm joined by Co-Chairs Brian Kavanagh,
9 who is chair of the Housing, Construction, and
10 Community Development Committee, as well as
11 Co-Chair Kevin Thomas, who leads the Consumer
12 Protection Committee.
13 We're also joined by our ranking member and
14 colleague Senator Jim Tedisco.
15 This is Part 2, this is a continuation of a
16 hearing from last week, that looks at the serious
17 issue of housing discrimination within real estate
18 on Long Island specifically, prompted by "Newsday's"
19 investigation in late 2019.
20 We had one panel that chose not to be with us
21 last week, but they are with us here today, and
22 I will introduce them in just a moment.
23 But, first, I'd just like to remind the
24 incoming panel of the same ground rules that were in
25 place for last week's hearing.
4
1 First, after I introduce them in a moment,
2 they will be administered an oath and their
3 testimony will be sworn.
4 Each witness will be afforded up to
5 five minutes for their opening remarks.
6 During questions at this hearing, chairs and
7 rankers will be provided 10 minutes, while members
8 of each committee will be provided five minutes if
9 we are joined by members.
10 Chairs and rankers will be afforded a second
11 round of questions if needed.
12 Just like at the last hearing, I would like
13 to remind the witnesses today that they are subject
14 to Section 215.60 of the Criminal Procedural Law
15 entitled "Criminal Contempt of the Legislature,"
16 specifically:
17 A person is guilty of criminal contempt of
18 the legislature when, having been duly subpoenaed to
19 attend as a witness before either house of the
20 legislature or before any committee thereof, he or
21 she (1) fails or refuses to attend without lawful
22 excuse, or (2) refuses to be sworn, or (3) refuses
23 to answer any material and proper question, or
24 (4) reuses, after reasonable notice, to produce
25 books, papers, or documents in his or her possession
5
1 or under his or her control which constitute
2 material and proper evidence.
3 Criminal contempt of the legislature is a
4 Class a misdemeanor, punishable by fines and jail
5 time.
6 So, with that, I think we are prepared to
7 hear from our first and only panel today, which are
8 folks from Realty Connect USA, and with the company
9 we have: Bart Cafarela, Reza Amiryavari,
10 Joseph Jannace, and Margaret Petrelli.
11 I know we were having some trouble getting
12 Margaret Petrelli into the Zoom today.
13 I don't know if she has joined us yet or not,
14 but, hopefully, she can. Certainly, the expectation
15 is that she be with us today.
16 Stanley, do you have any update on
17 Ms. Petrelli?
18 OFF-CAMERA TECHNICIAN: She is being walked
19 through the technical piece with our control room
20 now.
21 SENATOR SKOUFIS: Okay. Very good.
22 So while we wait for her, I will administer
23 an oath to her after she joins us.
24 But, in the meantime, if the three gentlemen
25 could raise their right hand for me.
6
1 Do you swear that the testimony you're about
2 to give is the whole truth, and nothing but the
3 truth, so help you God?
4 BART CAFARELA: I do.
5 REZA AMIRYAVARI: I do.
6 JOSEPH JANNACE: I do.
7 SENATOR SKOUFIS: Very good.
8 Thank you.
9 Mr. Cafarela, do you have opening remarks?
10 BART CAFARELA: I do; I do, Senator.
11 SENATOR SKOUFIS: Please proceed.
12 BART CAFARELA: Thank you.
13 Good morning, Chairman Kavanagh,
14 Chairman Skoufis, Chairman Thomas, and members of
15 the committee present today.
16 I would like to start off by thanking all of
17 you for providing us this opportunity to discuss the
18 important issue of fair housing on Long Island, as
19 well as "Newsday's" investigation and how it
20 pertains to Realty Connect USA.
21 If I may share just a little bit about
22 myself:
23 My name is Bart Cafarela.
24 As a licensed real-estate broker for over
25 40 years, I have always taken fair housing practices
7
1 quite seriously.
2 Everyone has the right to fair and equal
3 treatment in all aspects of their lives, including,
4 most especially, when obtaining housing.
5 In 2010 we created Realty Connect USA.
6 Fair and equal treatment for all, and fair
7 housing, was one of our cornerstones.
8 This applies not only to our customers, but
9 to our staff and all our sales agents as well.
10 The principles of equality have, in fact,
11 been woven into the very fabric of our firm.
12 I believe we may have the most diverse
13 real-estate agency on Long Island.
14 Since our inception, and through the past
15 decade, we are, and have been, extremely proactive
16 at providing weekly educational training on many
17 subjects, with fair housing being a constant
18 component.
19 Topics such as, fair housing by a brokerage,
20 illegal rentals, laws regarding advertising,
21 fair-housing rules and regulations, all protected
22 characteristics, and updated fair-housing laws are
23 some of the topics, just to name a few.
24 In addition, since our inception, and at
25 least on a quarterly basis, we contracted with the
8
1 department of state board-certified trainers to
2 facilitate our dedicated programs on fair housing
3 for all our agents.
4 These trainings were held in addition to our
5 regular broker trainings.
6 All our meetings are filmed and archived in
7 our internal Facebook site, allowing agents who did
8 not or were not able to attend in person to view
9 these trainings at their convenience with
10 24/7 access.
11 We strive to educate our agents not just to
12 the law, but to the spirit of the law, and well
13 beyond what is required.
14 This is something that Realty Connect USA has
15 always done.
16 I believe this committee has received some
17 samples of the meetings Realty Connect USA has
18 conducted, and continues to conduct on a frequent
19 and consistent basis.
20 Our dedication to providing agents with
21 updated, constant information about fair housing is
22 evidenced in the hundreds of samples of
23 documentation provided to you, which included
24 in-person meetings, company-wide trainings,
25 company-wide e-mails, company social-media posts,
9
1 archived training videos, and now because of
2 COVID-19, Zoom meetings.
3 I believe you received our packet here.
4 The worst thing that can happen to a
5 homebuyer or renter is to be discriminated against
6 or treated differently because of their color,
7 national origin, sexual orientation, age, or gender,
8 just to name some.
9 They are the real victims, and this is
10 unacceptable.
11 So it was important for me to review the
12 "Newsday" tapes in their entirety, as well as to
13 speak to the agents individually, before taking any
14 action or passing any judgment.
15 When I first saw the article and viewed some
16 of the clips, I, like most people, was concerned.
17 At face value, things may not always appear
18 as they should.
19 After speaking with each of the agents
20 individually, as well as viewing each of their
21 recordings in their entirety, I was satisfied that
22 unequal treatment, racial bias, or steering was not
23 at the heart of their statements with the testers.
24 Yet, if any of the comments recorded offended
25 anyone, I, along with the agent in question, are
10
1 truly and sincerely sorry, as it is -- certainly was
2 not the intent.
3 And while I do believe that unequal treatment
4 was not at the core of any of these comments, it's
5 clear that we all need to modify how we interact
6 with our customers.
7 We need to be consistent, as inconsistency
8 can be interpreted as unequal treatment.
9 We need to understand implicit bias, and how
10 it affects each of us and our interactions, not only
11 with our clients and customers, but with everyone we
12 meet.
13 We now need only to speak about the
14 real estate, the property, the house, and the deal.
15 Period.
16 And so, how do we at Realty Connect USA move
17 forward?
18 To develop a better understanding of the
19 issue, we scheduled a meeting with Bobby Kalotee,
20 the chair of the Nassau County Commission on Human
21 Rights, to discuss the issue of fair housing in
22 Nassau County, and we volunteered our services to
23 sit on a proposed committee to address these issues
24 and formulate strategies moving forward.
25 I voluntarily met with the New York State
11
1 Department of State, as well as the New York State
2 Director of Human Rights, to discuss the "Newsday"
3 article.
4 After much research, we met with
5 Steve Glassrot [ph.], director of housing policy and
6 initiative for Erase Racism.
7 SENATOR SKOUFIS: If you could wrap up in the
8 next 20 seconds or so.
9 BART CAFARELA: I'll do my best, Senator.
10 And expert test -- and we also met with
11 founder, Elaine Gross, who provided expert testimony
12 here this week.
13 In fact, we hired Erase Racism to host a
14 workshop for our agents entitled "How Do We Build a
15 Just Long Island?" which focused on housing
16 discrimination, the history of housing
17 discrimination, and included a strong segment on
18 implicit bias.
19 This seminar was held in February, and we
20 look forward to doing future workshops with her
21 organization.
22 Having been disappoint -- disappointment with
23 the department of state training programs, we began
24 a search for an internal, mandatory fair-housing
25 course for Realty Connect USA agents that could
12
1 provide just not -- just not another outdated
2 compliance course, but a true learning experience.
3 I wanted an interactive curriculum, which
4 provided supervision through monitoring, and also
5 would include a testing component, so that the
6 agents would truly understand what was being taught.
7 We contracted with Andrew Lieb of Lieb Law,
8 an expert in fair housing and real-estate law, and
9 designed an online course that included all these
10 components.
11 We launched this course in late April, which
12 is ongoing and mandatory for every one of our
13 existing agents, agents that are new to our company,
14 as well as our staff.
15 In addition, we have updated our website, our
16 independent-contractor's agreement, our in-office
17 signage, created a "Know before you go" customer
18 information sheet, and amended on-boarding
19 proceedings to reflect -- to better reflect the
20 commitment to fair housing and equal treatment for
21 all.
22 SENATOR SKOUFIS: I'm going to ask you to
23 stop there, if you could.
24 BART CAFARELA: Thank you.
25 SENATOR SKOUFIS: Yeah, thank you.
13
1 BART CAFARELA: I conclude.
2 SENATOR SKOUFIS: Because we do have the
3 others to -- I'm sure we'll have questions.
4 Mr. Jannace, do you have any opening
5 statement?
6 JOSEPH JANNACE: Yes, Senators.
7 Senators, and members of the committee
8 present today, I would like to first thank you for
9 the opportunity to speak about this issue in my
10 opening statement.
11 I'm Joseph N. Jannace, a real-estate broker
12 with Realty Connect USA, and I've have been a
13 realtor for over 47 years.
14 I can unequivocally state that I have never
15 steered or discriminated against anyone who came to
16 see me to help find a home.
17 I believe the totality of the video obtained
18 by "Newsday," and the facts presented in the article
19 regarding my treatment of the two testers,
20 demonstrate fair and equal treatment to all.
21 "Newsday" concluded I engaged in steering by
22 providing the minority reporter with listings that
23 were 58.4 percent White census tract areas, and the
24 White tester, listings over 67 percent White census
25 tract areas.
14
1 Simply put, I do not have -- I do not have
2 access or knowledge to the statistical racial makeup
3 of particular census tracts.
4 I don't even know what a particular "census
5 tract" is.
6 These statistics are not something I've ever
7 considered, or would consider, in representing a
8 client to purchase a home.
9 The criteria I consider in suggesting homes
10 to prospective clients are the details they provide
11 regarding commute, style of home, bedrooms,
12 bathrooms, finishes of a home, and many other
13 factors that are specific to real estate.
14 At no point does race, either directly or
15 inherently, play a factor in how I choose to
16 represent a client or the listings I send.
17 This was not a fair and accurate test, in the
18 fact that the two reporters had numerous differences
19 in their criteria.
20 Linda indicated that she definitely likes
21 renovated homes.
22 Jennifer asked to include listings that
23 needed a little updating to get more for the money.
24 These factors dictate whether a prospective
25 client is provided with listings in newer condition,
15
1 or not.
2 Linda was starting a new position in
3 Bay Shore, while Jennifer and her husband both were
4 working in central Queens County.
5 This had the biggest bearing on my selection
6 of which listings to send to each.
7 Linda was opposed to short sales, while
8 Jennifer was open to short sales.
9 Because Jennifer had a young child,
10 I eliminated main roads.
11 Linda was open to waterfronts, while Jennifer
12 eliminated waterfront homes.
13 Senators, for your reference, my statement
14 includes the time stamp for each of the factors I've
15 described above.
16 In both tests, I spent several minutes
17 explaining the real-estate search engine
18 Collaborate, which allows clients to specify
19 criteria of homes in geographic areas.
20 These preferences are shared for my viewing
21 and allows me to effectively represent a client, and
22 provide showings of homes identified by the buyer.
23 Despite my efforts to provide resources to
24 most effectively search for a home, I was repeatedly
25 asked by these reporters for listings.
16
1 The conversations and criteria provided by
2 clients is the utmost importance in deciphering
3 their preferences. There's no detail that is too
4 small or insignificant.
5 After all, it's been my life's work to use
6 these details to ensure countless prospective
7 homebuyers to find a home that suits their family
8 and loved ones.
9 I welcome any questions you might have, and
10 thank you again for providing me the opportunity to
11 speak today.
12 SENATOR SKOUFIS: Thank you for being here.
13 I do want to acknowledge that we have been
14 joined by Senator Anna Kaplan.
15 Mr. Amiryavari.
16 If you can unmute yourself, please.
17 JOSEPH JANNACE: Press your "mute."
18 REZA AMIRYAVARI: Yes.
19 Senators, and members of the committee
20 present today, I first like to thank you for
21 allowing me an opportunity to speak on issue and
22 opening statement.
23 I originally entered real estate as a second
24 career in early 2000s.
25 After my experience purchasing a home, my
17
1 wife and I bought a home, and no one told us about
2 the various steps involved.
3 We were rushed through the process and never
4 told about the inspection being such an important
5 aspect of buying process.
6 I was never told about what good things or
7 bad things to look for in a home.
8 This is typically the most important purchase
9 of an individual or family in their lives.
10 This experience motivated me to become
11 involved in real estate.
12 I believe it is my passion for helping
13 clients that allows me to be an effective
14 real-estate agent.
15 For that reason, I tried to give as much
16 information as possible to my clients, to assure
17 their home-buying experience is not like the first
18 one I had.
19 Let me be abundantly clear in saying that
20 I did not provide unequal treatment or serve either
21 of the testers depicted in the investigation.
22 Furthermore, the "Newsday" article indicates
23 that there was a third tester I was evaluated by,
24 whose recording equipment failed.
25 "Newsday" reported that the third tester was
18
1 provided equal and fair treatment.
2 Unfortunately, "Newsday" did not provide me
3 with any evidence of the third tester.
4 I don't believe I violated any fair-housing
5 law; however, as a result of the "Newsday"
6 investigation, I now realize that even the best of
7 intentions can be misconstrued and interpreted as
8 something proper -- improper.
9 In the wake of the "Newsday" article,
10 I evaluated how I communicate with my clients.
11 I evaluated my professional responsibility to
12 communicate more concisely and effectively.
13 Since the release of the article, I have
14 completed six separate fair-housing education
15 courses with the Lieb School of Real Estate,
16 New York School of Real Estate, Charter Real Estate
17 School, Long Island Board of Realtors, Long Island
18 School of Real Estate, as well as a course generated
19 by Realty Connect USA and Andrew Lieb of the
20 Lieb School of Real Estate and Continuing Education.
21 I have also completed the training
22 commissioned by Realty Connect USA entitled "How Do
23 We Build a Just Long Island?" conducted by
24 Ms. Elaine Gross of Erase Racism.
25 Finally, and most importantly, I am an
19
1 immigrant myself from Middle East, who arrived in
2 the United States in 1975.
3 I have made it a personal and professional
4 practice to look past an individual's race or any
5 protected class.
6 In the context of the "Newsday" article, the
7 race of either tester was never a factor in my
8 efforts to provide them with the best possible
9 service.
10 I appreciate you affording me the opportunity
11 to speak, and I welcome any questions you might
12 have.
13 SENATOR SKOUFIS: Thank you very much for
14 your opening statement.
15 I do want to point out we have been joined by
16 Senator Phil Boyle.
17 And I'm glad, Ms. Petrelli, you were able to
18 work through the technical issues at the onset, and
19 you've joined us.
20 Before we get to your testimony, and if you
21 could please unmute, I did swear in the rest of the
22 panel before you arrived.
23 So if I may, if you can raise your right hand
24 for me.
25 Do you swear to tell the truth, the whole
20
1 truth, and nothing but the truth, so help you God?
2 MARGARET PETRELLI: I do.
3 SENATOR SKOUFIS: Thank you.
4 Please proceed.
5 MARGARET PETRELLI: Okay.
6 Good morning, Senators and members of the
7 committees present today.
8 I would like to thank you for allowing me an
9 opportunity to speak on a -- to speak and issue an
10 opening statement.
11 I would like to start by saying that the
12 "Newsday" article has caused me to conduct a great
13 deal of self-reflection in my personal life and my
14 professional life.
15 I must admit that being accused of unequal
16 treatment or implicit bias relative to representing
17 clients in consideration of their race is a
18 significant accusation.
19 I believe that I did not act in violation of
20 fair-housing laws and regulations.
21 I know that I had no intention to represent
22 either tester differently in any way.
23 I welcome the opportunity to speak with you
24 about the specific thought process I had and what
25 the videos depict.
21
1 However, I admit the "Newsday" article, in
2 general, has changed the way I conduct business.
3 I have been a licensed real-estate agent
4 since 1996.
5 I have never had a complaint made by a
6 client, or anyone else, for that matter.
7 However, I recognize, as a professional, we
8 are always learning and changing how we conduct
9 business.
10 I believe it is incumbent on the real-estate
11 agent to remind mindful of any implicit bias we may
12 have.
13 I believe it is important to utilize
14 resources made available to each agent of
15 Realty Connect to assure proper knowledge and
16 application of the federal fair-housing laws.
17 Since the release of the "Newsday" article,
18 I conducted a self-imposed reduction of my business
19 activities to ensure proper education, and evaluate
20 how I interact with clients.
21 I voluntarily participated in four separate
22 fair-housing courses.
23 First, with [indiscernible], followed by a
24 course with the New York State Association of
25 Realtors.
22
1 I have attended and participated in the
2 training commission by Realty Connect USA entitled
3 "How We Build a Just Long Island," conducted by
4 Elaine Gross of Erase Racism.
5 I have completed the interactive fair-housing
6 course generated by Realty Connect USA and
7 Andrew Lieb of the Lieb School of Real Estate, and
8 continuing education from the New York State
9 Association of [inaudible].
10 These classes have provided a different
11 perspective that I find useful in communicating with
12 clients, and assuring that I do not speak or act in
13 a way that would invite scrutiny.
14 While I disagree with many of the methods and
15 conclusions in the "Newsday" article, I have tried
16 to use the article to self-reflect and more
17 effectively represent my clients and the Long Island
18 community.
19 I welcome any questions you may have, and
20 thank you again.
21 SENATOR SKOUFIS: Thank you all very much.
22 We'll jump right into questions, and I'll
23 start.
24 I'll start with Mr. Cafarela.
25 You're the broker; correct?
23
1 BART CAFARELA: Correct.
2 SENATOR SKOUFIS: Okay.
3 And how many agents are in your brokerage?
4 BART CAFARELA: Over 400.
5 SENATOR SKOUFIS: Over 400. Okay.
6 Now, if -- if I may, you know, you -- I think
7 your word was "concerned"; you said you were
8 concerned when you initially saw the videos and the
9 information in the "Newsday" exposé.
10 But that, after having meetings and speaking
11 with the agents, you felt that there was no
12 misbehavior that rose to the level of discipline.
13 And just to be clear, there was no discipline
14 with any of the agents following this investigation.
15 Is that correct?
16 BART CAFARELA: Well, when I reviewed --
17 well, the "Newsday" article actually came out, and
18 it came out in pieces. And it naturally was
19 shocking, I think, to everyone when it first -- when
20 it first broke, and it broke in a big way, it broke
21 in a big public way.
22 So I -- I took the time to research, and
23 tried to view as much as I possibly could, as fast
24 as I could, initially. And it, quite frankly, took
25 a long time to go through all the process.
24
1 And when I saw everything in its entirety,
2 and after consulting with the agents themselves, and
3 I probably viewed these tapes several times now,
4 I chose not to see that there was any racial
5 discrimination. The spirit of the racial laws was
6 not violated.
7 And I chose not to do any -- take any direct
8 discipline with any of the agents.
9 And I did suggest that, like I myself did,
10 maybe we missed something, and maybe we should --
11 maybe I should get back into the real-estate schools
12 and see what they're teaching again.
13 And I voluntarily went to a fair-housing
14 class, along with some of my staff, at that
15 particular time.
16 And I did suggest the same to [simultaneous
17 talking] --
18 SENATOR SKOUFIS: And you felt there was no
19 inconsistent treatment that rose to the level of
20 violating fair-housing laws.
21 Is that fair?
22 BART CAFARELA: That's fair to say, yes.
23 SENATOR SKOUFIS: Okay.
24 You felt there was no steering --
25 BART CAFARELA: That's correct.
25
1 SENATOR SKOUFIS: -- in the end?
2 BART CAFARELA: That's correct.
3 SENATOR SKOUFIS: Okay.
4 If I may, I want to put up two clips, the
5 first of which is going to be Clip 1 from
6 Mr. Amiryavari.
7 (Audio-only clip playing, and transcribed
8 as follows:)
9 AGENT REZA AMIRYAVARI: You don't want to be
10 in -- I don't think you should be in Elmont.
11 I think you should probably just be
12 Franklin Square.
13 THE TESTER: Okay.
14 AGENT REZA AMIRYAVARI: I think that's my
15 thought, you know?
16 THE TESTER: Okay.
17 AGENT REZA AMIRYAVARI: I think you want to
18 stay in Franklin Square, if you go there.
19 THE TESTER: Okay.
20 AGENT REZA AMIRYAVARI: Here is great --
21 THE TESTER: Okay.
22 AGENT REZA AMIRYAVARI: -- East Meadow okay,
23 no issues --
24 THE TESTER: Okay.
25 AGENT REZA AMIRYAVARI: -- as far as, you
26
1 know, the feedback that I get from, you know,
2 buyers, and I've looked stuff up.
3 THE TESTER: Right.
4 AGENT REZA AMIRYAVARI: But, technically, as
5 a real-estate agent, we shouldn't tell the buyers --
6 THE TESTER: Oh, okay.
7 AGENT REZA AMIRYAVARI: -- which school
8 district is better.
9 THE TESTER: Okay.
10 AGENT REZA AMIRYAVARI: Really, we are not
11 supposed to --
12 THE TESTER: Okay.
13 AGENT REZA AMIRYAVARI: -- because you gotta,
14 you know, the school district-wise only, you know,
15 because there's something called "steering," you
16 know, steering (indicating), like, you know,
17 steering --
18 THE TESTER: Oh, like a car, or something?
19 AGENT REZA AMIRYAVARI: No, like a horse, you
20 know.
21 THE TESTER: Ah, okay.
22 AGENT REZA AMIRYAVARI: You know, like facing
23 somebody towards whatever you want them.
24 THE TESTER: Oh, okay, okay. I see.
25 AGENT REZA AMIRYAVARI: So, in our business,
27
1 they say, if you do that, that's not right.
2 THE TESTER: Okay.
3 AGENT REZA AMIRYAVARI: And it's not right.
4 Some agents do it, but it's not correct --
5 THE TESTER: Okay.
6 AGENT REZA AMIRYAVARI: -- because the buyers
7 should kind -- we gotta give you information,
8 basically.
9 THE TESTER: Right, right.
10 (End of video clip and corresponding
11 transcription.)
12 SENATOR SKOUFIS: So, Mr. Cafarela, around
13 the same time that your agent went into some detail
14 explaining what steering was, he explicitly noted,
15 "you don't want to be in Elmont."
16 Now, certainly, that seems to me to be
17 steering.
18 Now what convinced you otherwise after having
19 a conversation with your agent?
20 BART CAFARELA: Well, this is -- that was,
21 I think, 16 seconds of probably several hours of the
22 interactions with the clients that Russ had.
23 And I think not having heard the opening
24 statements from the agents with me today, I think
25 Russ may have handled that in his opening statement
28
1 and addressed that.
2 And this was Russ's way of explaining, like
3 he said when he purchased his own home, people
4 didn't explain much to him.
5 This is his way of explaining what he can,
6 and what's not permitted.
7 It may not have been the most articulate way
8 to go about doing it, but I believe Russ is trying
9 to explain to that client, really, what steering was
10 all about, because [simultaneous talking] --
11 SENATOR SKOUFIS: Yeah, I don't think the
12 question is, you know, his explanation of steering,
13 and whether, you know, it was accurate or not, at
14 least that's not my question here.
15 My question to you is: In light of, you
16 know, him bringing it up on his own shortly after
17 making a note, "you don't want to be in Elmont," you
18 noted, after speaking with your agents, that you
19 didn't believe there were any violations of
20 fair-housing, no steering taking place.
21 What additional context, or what explanation
22 did you receive from your agent, that convinces you
23 that that statement, "you don't want to be in
24 Elmont," was not steering?
25 BART CAFARELA: Well, I think it was related
29
1 to the entire interaction that Russ may have had
2 with this particular tester.
3 I will point out, in my conversations with
4 what --
5 Well, I call him Russ. His name is Reza.
6 -- in my conversation with Reza, Reza didn't
7 realize one client from another. He couldn't -- he
8 never distinguished one was, I believe now turns out
9 to be Hispanic, and one was White.
10 SENATOR SKOUFIS: What do you think he was
11 referring to when he said "you don't want to be in
12 Elmont"?
13 BART CAFARELA: In the context of that whole
14 conversation, I don't exactly know what he was
15 referring to.
16 I'm trying to think back what took place
17 prior to that interaction, as to why he said not to
18 be in Elmont.
19 I don't consider --
20 SENATOR SKOUFIS: So you can unequivocally
21 tell this committee there was no steering taking
22 place, but then just tell me that you don't know
23 what he was referring to when he --
24 BART CAFARELA: I can honestly tell you that
25 that's the case.
30
1 SENATOR SKOUFIS: How can you say that when
2 you just said you don't know what he's referring to
3 there --
4 BART CAFARELA: Well, I --
5 SENATOR SKOUFIS: Stay away from Elmont,
6 basically?
7 BART CAFARELA: -- yeah.
8 Well, I viewed the entire video of Russ, and
9 I saw the whole interaction in context.
10 And he offered these clients, and I quote,
11 I wrote a quote down that I think it's very
12 important to know, that showed that he had no
13 intention and there was issue of steering
14 [indiscernible], when he said to the tester, "I can
15 show you any home, anywhere."
16 SENATOR SKOUFIS: And that's -- that's a
17 defense for anything that might come subsequent to
18 that statement?
19 BART CAFARELA: Well, I wasn't using it as a
20 defense.
21 And I would have to go back and review that
22 particular portion as to why he said "you don't want
23 Elmont."
24 SENATOR SKOUFIS: Okay.
25 BART CAFARELA: It could have been his
31
1 opinion, based on a lot of conversations with that
2 tester, that maybe the best choice of homes for him
3 were not in Elmont.
4 SENATOR SKOUFIS: Okay.
5 I would have thought, especially since your
6 opening remarks, and given the additional week of
7 time, perhaps you would have that context at your
8 fingertips, knowing that you would be asked about
9 this.
10 But let's move on to Clip Number 1 from
11 Ms. Petrelli, please.
12 (Audio-only clip playing, and transcribed
13 as follows:)
14 AGENT MARGARET PETRELLI: [Indiscernible]
15 they want something, some form of ID.
16 THE TESTER: Some form of ID? Okay.
17 Uhm ...
18 [Inaudible.]
19 AGENT MARGARET PETRELLI: [Indiscernible.]
20 THE TESTER: That matches the name?
21 AGENT MARGARET PETRELLI: Yes.
22 THE TESTER: I'm sort of confused to why you
23 would need some form of ID, though.
24 AGENT MARGARET PETRELLI: Well, I just need
25 to know that this is really where you live, and
32
1 everything, so that if we do the paperwork --
2 THE TESTER: Right, right, right.
3 Okay.
4 [Simultaneous talking by both parties.]
5 THE TESTER: Yeah, no, yeah, that's fine.
6 (End of audio-only clip and corresponding
7 transcription.)
8 SENATOR SKOUFIS: Mr. Cafarela, is it office
9 policy to request ID of prospective buyers?
10 BART CAFARELA: It is strongly suggested that
11 the agents can -- yeah, can ask them for ID at their
12 open houses.
13 We've done this consistently, and we have
14 done it from a safety point of view, that agents do
15 feel comfortable asking for a form of ID.
16 It's not a company policy. It's strongly
17 recommended that agents [indiscernible] --
18 SENATOR SKOUFIS: It is?
19 BART CAFARELA: -- [indiscernible].
20 Yes.
21 SENATOR SKOUFIS: And is it --
22 BART CAFARELA: From a whole safety point of
23 view.
24 SENATOR SKOUFIS: -- however, is it
25 problematic if some people are asked for it, and
33
1 some others, by an individual agent?
2 BART CAFARELA: Yes, we realize it is
3 problematic if that agent says -- requests some form
4 of ID from some clients, and from other clients they
5 do not.
6 There is also incidents where homeowners
7 request, that they don't want people in their homes
8 unless we get their ID.
9 And we do respect those requests from our
10 clients.
11 SENATOR SKOUFIS: If I can turn over to
12 Ms. Petrelli, and if you could please unmute
13 yourself, so, in the case of the "Newsday" testers,
14 you asked the tester of color for their ID, but not
15 the White tester.
16 Can you -- can you give us some explanation
17 for that?
18 MARGARET PETRELLI: Yes, Senator, I can.
19 I asked the minority because of a personal
20 life event between the five-month gap between the
21 two testers.
22 It was a traumatic experience that
23 erratically altered my understanding of personal
24 safety.
25 I now make it a practice to ask all clients
34
1 for identification.
2 Realty Connect USA stresses asking for
3 identification for our own safety.
4 I do not wish to share the particulars of
5 this personal event, and hope that you can respect
6 my wishes for that.
7 SENATOR SKOUFIS: Okay.
8 So what you're saying is, the minority tester
9 was the second of the two testers to approach you --
10 is that correct? -- and something happened in the
11 interim?
12 MARGARET PETRELLI: Yes.
13 SENATOR SKOUFIS: Okay. So can you say --
14 can you tell us, these committees, with certainty,
15 then, that prior to this life event, this personal
16 event, that you're referring to, that you had never
17 asked a prospective buyer for an ID?
18 MARGARET PETRELLI: I probably did not.
19 I should have for my own personal safety, but
20 I probably did not.
21 SENATOR SKOUFIS: Okay.
22 And since this personal event, have you asked
23 all prospective buyers for their ID --
24 MARGARET PETRELLI: Yes.
25 SENATOR SKOUFIS: -- regardless who they are
35
1 and where they're coming from?
2 MARGARET PETRELLI: Yes, Senator.
3 SENATOR SKOUFIS: Okay. Thank you.
4 I may come back for a second round, but in
5 the meantime, I'll turn it over my
6 co-chair Brian Kavanagh.
7 SENATOR KAVANAGH: Great.
8 Thank you, Senator Skoufis, and thank you to
9 the witnesses.
10 I'm going to just start with Mr. Cafarela.
11 You -- you mentioned that a whole series of
12 steps that you've taken since the "Newsday" articles
13 came out.
14 Do you believe that -- and you've said -- you
15 said, unequivocally, that you don't believe anybody
16 at Realty Connect violated fair-housing laws.
17 Do you believe the article showed, I mean,
18 wrongdoing? improper behavior?
19 What is -- what is your -- what is your
20 assessment of the -- of the evidence that we've all
21 seen?
22 BART CAFARELA: The entire "Newsday" --
23 "Newsday" article, as I said earlier, was quite
24 sensational, and it actually unfolded over a series
25 of weeks, if not months. And it was a lot -- it
36
1 was -- it was -- it was an impressive -- it was an
2 impressive article, and it was very, very detailed
3 on many fronts.
4 So it took us time to really absorb it all
5 just to really see it.
6 If you're asking my overall impression of the
7 "Newsday" article, Senator? Is that -- am I correct
8 on that?
9 SENATOR KAVANAGH: Well, I want that, and
10 then your overall -- I mean, you've -- you've --
11 it's inspired you to take a whole range of steps.
12 And it's sort of, like, kind of if -- if --
13 if nobody at your firm did anything wrong, why was
14 such a substantial change in your practices
15 necessary?
16 BART CAFARELA: Yeah, okay.
17 Correct.
18 You know, you can't be too careful today.
19 The industry, as well as the world, is
20 evolving. And what was normal -- normal acceptable
21 practice three, four, five years ago, is not normal
22 today.
23 What is practiced today is not acceptable --
24 what was practiced six months ago is different than
25 what we practice today.
37
1 So we -- I felt that we better step it up and
2 really make sure that we are providing at least --
3 the best -- the best possible training we can
4 possibly find regarding fair housing, which was not
5 an admission, it should not be construed, as we've
6 done anything wrong in the past.
7 I -- I strive, along with my partners, to put
8 forth the best fair housing we possibly could
9 throughout [indiscernible] -- throughout our company
10 since we -- since we started.
11 So we -- we start out the very best, to be
12 sure that any issues would never -- would never
13 happen again, and that our agents were well-trained.
14 SENATOR KAVANAGH: Do you believe it's
15 acceptable today to give specific opinions about
16 school districts, what school districts to avoid?
17 BART CAFARELA: Senator, we -- we --
18 SENATOR KAVANAGH: That's a yes-or-no
19 question.
20 Are you -- do you believe it is acceptable to
21 give specific opinions about school districts?
22 BART CAFARELA: We do not believe that today.
23 SENATOR KAVANAGH: Do you believe that was
24 acceptable a year ago?
25 BART CAFARELA: We don't believe it was
38
1 even -- you know, it's -- it's -- to talk -- to talk
2 about school districts was -- a year ago, did agents
3 speak about school districts?
4 I'm sure they did, and -- and -- in the
5 context of, this school, that school, the next
6 school.
7 It certainly is something that we train
8 today, not to talk about school districts.
9 In fact, Senator, we put together a little
10 "Know before you go" --
11 SENATOR KAVANAGH: Okay, but [indiscernible]
12 I'm focused -- you've done that recently.
13 I'm talking about, as things were a year ago.
14 As things were a year ago, do you believe it
15 was acceptable in your industry to be making
16 specific assertions about school districts to avoid?
17 BART CAFARELA: We -- we -- we -- I don't
18 believe a year ago we were encouraging people to
19 talk about school districts.
20 SENATOR KAVANAGH: I'm not asking you whether
21 you were affirmatively encouraging people to do
22 that.
23 I'm asking whether that was acceptable in
24 your industry and in your firm.
25 BART CAFARELA: In the industry I would think
39
1 it was acceptable to talk about school districts.
2 SENATOR KAVANAGH: Okay. Is it -- was it
3 legal to talk about school districts a year --
4 [indiscernible] -- to recommend somebody
5 specifically to avoid a specific school district?
6 BART CAFARELA: You know, we -- we -- we
7 brought in -- we brought in a lot of fair-housing
8 experts, quote/unquote, some of them were attorneys,
9 to train on this subject. And talking about school
10 districts was not something they said "do not
11 mention."
12 These were state-certified trainers. They
13 were working off curriculums --
14 SENATOR KAVANAGH: Mr. Cafarela, with all due
15 respect, I'm asking you specifically, in -- your
16 understanding, you're -- you're a -- you're licensed
17 in this business. I'm asking your understanding of
18 the law.
19 Do you -- is it your understanding of the law
20 that it is permissible, or impermissible, to
21 indicate that a homebuyer should avoid a specific
22 school district?
23 BART CAFARELA: That's not permissible.
24 SENATOR KAVANAGH: Not permissible?
25 BART CAFARELA: Correct.
40
1 SENATOR KAVANAGH: It's illegal?
2 BART CAFARELA: It's not permissible. It --
3 it --
4 SENATOR KAVANAGH: Under the law?
5 BART CAFARELA: -- correct.
6 SENATOR KAVANAGH: Okay.
7 Okay, I'm going to go -- Ms. Petrelli, one
8 of these testers was mentioned already.
9 But you met with a White tester and a
10 Black tester who were similarly situated, and both
11 said they had school-aged children.
12 You didn't provide the Black homebuyer with a
13 list of school districts.
14 I want to show a clip now of your interaction
15 with the White homebuyer.
16 This is number -- Clip Number 2, if we could
17 show that.
18 (Video clip playing, and transcribed as
19 follows:)
20 AGENT MARGARET PETRELLI: We have
21 [indiscernible], which is [indiscernible].
22 That's 23.
23 We have Seaford, which is 6.
24 We have Massapequa, which is beautiful,
25 which, if you are in Massapequa, you only want
41
1 School District 23.
2 THE TESTER: Okay.
3 AGENT MARGARET PETRELLI: You don't want 6 in
4 Massapequa because that takes you into Amityville,
5 and you're not going to like those schools.
6 But Seaford is different.
7 THE TESTER: Oh, okay.
8 (End of video clip and corresponding
9 transcription.)
10 SENATOR KAVANAGH: Okay. So
11 [indiscernible] -- Ms. Petrelli, we just heard you
12 advise a White homebuyer that she didn't want
13 District 6 in Massapequa because it takes in
14 Amityville, and "you're not going to like those
15 schools."
16 What did you mean when you said "you're not
17 going to like those schools"?
18 MARGARET PETRELLI: Okay, I discussed the
19 particular school districts with respect to resale
20 value.
21 The resale value in certain areas and certain
22 school districts don't hold up.
23 It had nothing to do with any kind of a
24 racial makeup, or anything to do with that.
25 It was only on resale value.
42
1 SENATOR KAVANAGH: Okay, are you -- are you
2 telling this committee that racial makeup of
3 communities doesn't affect resale value?
4 MARGARET PETRELLI: I don't look at it that
5 way. I don't look at the racial end of it.
6 I'm just looking at the resale value.
7 SENATOR KAVANAGH: Okay.
8 [Indiscernible], again, we're -- a lot of
9 what we are looking at is training, including, we
10 have several pieces of legislation about training.
11 So I do want to understand your understanding
12 then and your understanding now.
13 You believe it is acceptable today to steer
14 somebody away from a school district if you're doing
15 it based on your perceptions of resale value in that
16 school district?
17 MARGARET PETRELLI: Today, no.
18 SENATOR KAVANAGH: Okay, was it acceptable a
19 year ago?
20 MARGARET PETRELLI: I didn't -- like, it was
21 just nothing to do with race, so I don't believe
22 I was doing anything against the fair housing.
23 It was just to do with the resale value.
24 SENATOR KAVANAGH: Okay, I understand --
25 I understand that you are testifying about --
43
1 about -- about your intent there.
2 But, again, there's been additional training,
3 and you've, you know, had time to think about this.
4 Do you believe that it was impermissible a
5 year ago to tell somebody that they don't want a
6 particular school district because "you're not going
7 to like those schools"?
8 Which I will note, "you're not going to like
9 those schools" is not a reference to home values.
10 It's a ref -- it's -- I mean, I -- I don't
11 know how somebody hearing "you're not going to like
12 those schools" is going to understand that your
13 meaning was, you're not going to like those schools
14 because, some day, you're going to sell your home,
15 and the quality of those schools is going to affect
16 resale value.
17 But putting that aside, as a homebuyer with a
18 child, and you're telling them they're not going to
19 like the schools, but you believe that is -- today,
20 do you believe legal, and acceptable, if your -- if
21 your intent -- if -- if the reason you're saying is
22 about resale values in that school district?
23 MARGARET PETRELLI: I'm sorry, Senator,
24 you're going have to repeat that, because I don't
25 understand --
44
1 SENATOR KAVANAGH: Do you believe it is
2 acceptable and legal to tell somebody that they
3 don't want to go to District 6 in Massapequa because
4 it includes Amityville, if the reason you're saying
5 that is that you believe the resale value of the
6 Amityville schools will not hold up?
7 MARGARET PETRELLI: That's really not what my
8 intention was. That's not what I did.
9 As a matter of fact, if you go back to the
10 video, when you go to Minute 6, where it says, "I'm
11 sure you want a good school district, too, because
12 it's great for resale. You being a teacher, why
13 don't you look at the school districts. Pick a
14 couple" [simultaneous talking] --
15 SENATOR KAVANAGH: I respect -- I don't --
16 just because our time is short, and I respect what
17 you're saying, I respect you've testified about your
18 intent here.
19 And, again, if you want to say you don't know
20 the answer to this, that's an answer.
21 But, do you believe it is legal to tell
22 somebody that they want to avoid a particular school
23 district if that is based on your intent to maximize
24 the homebuyer's resale value?
25 MARGARET PETRELLI: That's -- that's not what
45
1 I did, Senator. I had -- that was not my intention
2 at all.
3 It was just --
4 SENATOR KAVANAGH: I know, but just, again,
5 [indiscernible] what you did was said, "You don't
6 want 6 in Massapequa because that takes in
7 Amityville, and you're not going to like those
8 schools."
9 That's just a fact.
10 Now, there's other context, and we do have
11 access to other materials.
12 But you believe today that statement is
13 acceptable, if your intent -- if it's based on the
14 resale values in Amityville, rather than whether the
15 particular homebuyer will like or not like the
16 schools per se?
17 MARGARET PETRELLI: Again, all I can say,
18 Senator, is that I didn't do it with anything to do
19 with the school district, as far as anything racial
20 and steering.
21 I did it because of the resale value.
22 SENATOR KAVANAGH: Okay.
23 I'm going to -- my time is up. I may want to
24 continue in a minute.
25 But I'll -- I'll turn it back over to our
46
1 other chairs.
2 SENATOR SKOUFIS: Senator Thomas.
3 SENATOR THOMAS: Thank you, all.
4 I have a few questions for Mr. Cafarela.
5 Given that you are the broker and all of them
6 work under your license, I'm correct about that;
7 right?
8 BART CAFARELA: Right.
9 SENATOR THOMAS: Okay.
10 So tell me your obligations, under the law
11 and regulations, regarding the supervision of
12 agents.
13 BART CAFARELA: In short, Senator, all
14 licensees that work under my broker's license we are
15 responsible for.
16 SENATOR THOMAS: That's it?
17 BART CAFARELA: Well, that's pretty broad.
18 How specific would you like me to be?
19 SENATOR THOMAS: Tell me, go ahead, elaborate
20 more than just them being your responsibility.
21 BART CAFARELA: Well, we have a
22 responsibility to supervise, which is one of our big
23 responsibilities. And we monitor -- we monitor --
24 I don't want to say we monitor all the activities.
25 That would be totally impossible. But we do
47
1 supervise all the agents under our license.
2 And we -- we -- we communicate with them the
3 best we can, and we try to utilize all the latest
4 technology to do so, so everyone has a clear
5 understanding of exactly the procedures and the --
6 and what's expected of them at my company.
7 SENATOR THOMAS: How often -- actually, let
8 me go back a little.
9 How -- how long ago have they started to work
10 under your license?
11 Like, when did they first start to work under
12 your license, all four of them?
13 BART CAFARELA: Oh, I don't have those dates,
14 but I believe all three of the agents with me today
15 have been with me for a number of years.
16 I don't have that information with me
17 currently, but they -- they've been with me for a
18 while.
19 SENATOR THOMAS: Dealing -- do you -- like,
20 when -- when you supervise agents, do you often give
21 them personal feedback?
22 How does this -- how does your supervision
23 work?
24 BART CAFARELA: Our company is maybe uniquely
25 organized for this, where my partner and I, both
48
1 brokers here, our primary responsibility and job is
2 to look after and work with the staff and the -- all
3 our agents.
4 We -- we don't do our own personal business.
5 We dedicate all the administrative work to
6 our administrators, and we handle all the -- all the
7 agents with any of their brokerage issues.
8 So that's really our -- our -- pretty much
9 [simultaneous talking] --
10 SENATOR THOMAS: So let's say -- so let's say
11 there is a complaint launched against one of your
12 sales agents.
13 How would you go about trying to, you know,
14 figure out what's going on? And how do you rectify
15 that situation?
16 BART CAFARELA: Okay, great.
17 So should a -- should a complaint be launched
18 against one of our sales agents, that would go --
19 that would come to myself or my partner, and we
20 would immediately take action against -- on that
21 complaint, and have conversations, and call in the
22 agent involved, and do an investigation, and handle
23 it with any party that may be involved with that.
24 We would handle that directly and personally.
25 SENATOR THOMAS: So let's say, in the past
49
1 year, how many complaints have come up to you and
2 your partner?
3 I mean, you don't have to give me like
4 specific facts, but how many have actually come up
5 to you?
6 BART CAFARELA: Outside of the fair-housing
7 forum --
8 SENATOR THOMAS: Yes.
9 BART CAFARELA: -- or just in general?
10 SENATOR THOMAS: No, outside of this.
11 AGENT REZA AMIRYAVARI: Outside of the
12 fair-housing?
13 It's -- it's -- it's not all that often.
14 It's -- the complaints could be from, maybe a
15 homeowner who is not particularly happy. An agent
16 is having an issue with other agencies.
17 SENATOR THOMAS: But how many; how many
18 [simultaneous talking] --
19 BART CAFARELA: It's maybe a half a dozen, if
20 I had to render a guess.
21 SENATOR THOMAS: Half a dozen. Okay.
22 BART CAFARELA: Putting aside -- putting
23 aside the fair-housing and the "Newsday" article,
24 yeah.
25 SENATOR THOMAS: And -- and -- you know,
50
1 outside of this "Newsday" article, in the past year,
2 how many agents have been disciplined for any sort
3 of violation?
4 BART CAFARELA: Well, it depends on the
5 violation, and it depends on the complaint. And
6 most of the complaints are usually resolved.
7 Agents may have been disciplined.
8 There have been agents who have been let go.
9 Some [simultaneous talking] --
10 SENATOR THOMAS: So you're telling me, this
11 past year, you let go of someone, or you disciplined
12 anyone?
13 BART CAFARELA: I would -- I -- I -- I'd have
14 to go back to see if anyone in the past 12 months
15 has been let go because of a -- just -- because of a
16 problem or a complaint.
17 SENATOR THOMAS: Okay, let me move on.
18 So you supervise about 400 agents?
19 BART CAFARELA: Along with my partner, yes.
20 SENATOR THOMAS: Okay. And how many of them
21 are active?
22 BART CAFARELA: Most of them.
23 SENATOR THOMAS: Most of them.
24 And how many offices do these agents operate
25 out of?
51
1 BART CAFARELA: We have one main office and
2 eight conference centers.
3 SENATOR THOMAS: Eight conference centers.
4 Okay.
5 All right. So you reviewed the videos;
6 right?
7 And in your testimony, in your opening
8 statement, actually, you talked about sitting down
9 with the human rights commissioner here in
10 Nassau County, Bobby Kalotee?
11 BART CAFARELA: That's correct.
12 SENATOR THOMAS: What -- what did he say
13 about the videos?
14 BART CAFARELA: I don't know if Bobby really
15 said much about it. I don't even know if Bobby was
16 aware of it.
17 SENATOR THOMAS: He wasn't aware of it?
18 BART CAFARELA: I'm not sure if he was.
19 I don't think there was -- he said -- he had
20 any comments regarding the fair-housing and the
21 "Newsday" article.
22 SENATOR THOMAS: Okay, but -- but --
23 BART CAFARELA: I don't recall that part of
24 the conversation.
25 SENATOR THOMAS: -- I mean, but --
52
1 BART CAFARELA: From him, rather, him being
2 aware.
3 SENATOR THOMAS: -- I mean, your -- your
4 opening statement said, you know, in order to
5 rectify the situation that we're in, you sat down
6 with him.
7 Like, what was the conversation about, like,
8 what exactly were you trying to rectify?
9 BART CAFARELA: Well, it's, like, we sought
10 him out for advice.
11 We sought him out, thinking that there may be
12 an issue with fair housing in Nassau County.
13 He is the director -- he -- I believe he
14 still is the director of human rights in
15 Nassau County, and I sought his advice.
16 SENATOR THOMAS: And what did he say?
17 BART CAFARELA: He really didn't think it was
18 that big of a deal based on what we let him know.
19 SENATOR THOMAS: Wow, he said that?
20 Okay.
21 BART CAFARELA: Well, don't quote me on that.
22 And --
23 SENATOR THOMAS: Well, you're in a hearing,
24 testifying live.
25 BART CAFARELA: Yeah, so -- [simultaneous
53
1 talking] --
2 SENATOR THOMAS: So I don't know how else to
3 take that.
4 But let me move on --
5 BART CAFARELA: Okay. [Simultaneous
6 talking] --
7 SENATOR THOMAS: Let me move on.
8 BART CAFARELA: -- he did suggest that we be
9 part of a committee on fair housing that they were
10 thinking of putting together.
11 SENATOR THOMAS: Okay.
12 So I want to talk to you about the different
13 programs that were used, which gave potential
14 evidence of disparate treatment. Right?
15 So one of the agents that you supervised
16 directed a prospective homebuyer to use Collaborate,
17 which was to a Black tester, and Prospect Match to a
18 White tester.
19 How do these programs work?
20 BART CAFARELA: Okay.
21 SENATOR THOMAS: And who decides, you know,
22 which program to use?
23 BART CAFARELA: Okay.
24 So if I may explain, and I -- Collaborate and
25 Prospect Match are, in essence, the same program.
54
1 It's with the multiple listing service on
2 Long Island, where we can actually input criteria
3 that a customer would like.
4 And based on the criteria that is entered, or
5 they enter, listings would automatically be sent to
6 them, based on their criteria.
7 So they have access to the entire database,
8 and to every property available through the
9 Long Island Multiple Listing System.
10 So the Collaborate is just a program that
11 they can go in at any time and change and modify,
12 view properties, based on their criteria, and it
13 pushes listings to them.
14 You may have used it.
15 I use it regularly.
16 If you're in a home search, you would
17 probably use it with one of the big search engines
18 as well.
19 And most of the agents do utilize that.
20 So every home -- potential homebuyer can
21 actually dictate which homes they would like to see,
22 where they would like to see them, what their
23 interest is, and what the criteria is, and they can
24 do that without the aid of an agent today.
25 SENATOR THOMAS: But is there any sort of
55
1 difference between the platforms?
2 I mean, if one is recommended to a White
3 tester and the other recommended to a Black tester,
4 is there some sort of difference there?
5 BART CAFARELA: Yeah, my understanding is
6 that Prospect Match is the old name for the service,
7 and Collaborate is the new name for the service.
8 MLS went through a transition, and I believe
9 Prospect Match, us old-timers, like myself, we call
10 it "Prospect Match." They now call it
11 "Collaborate."
12 But, in essence, it's the same program,
13 Senator.
14 SENATOR THOMAS: Okay.
15 Thank you so much.
16 BART CAFARELA: Thank you.
17 SENATOR SKOUFIS: Thank you, Senator Thomas.
18 I know that Senator Kavanagh has some
19 questions, but a couple things first.
20 One, I want to acknowledge that, some time
21 ago, Senator Jim Gaughran joined us.
22 And just a reminder to any committee members,
23 that if do you wish to ask questions, to please just
24 raise your hand.
25 Use that function within Zoom and we'll get
56
1 you on the list.
2 I do just want to follow up on something,
3 very quickly, with Mr. Cafarela that was part of
4 the exchange with Senator Thomas.
5 I just want to revisit something that you
6 just said.
7 In characterizing your outreach to the
8 Nassau County Human Rights Commissioner, you
9 described his response to the allegations within
10 your company as, quote, not that big of a deal.
11 I want to give you an opportunity to perhaps
12 revise those comments, given that you're under oath.
13 I -- because if that is, in fact, the case,
14 and that he viewed them as "not that big of a deal,"
15 I suspect that our committees would want to follow
16 up with him.
17 So do you want to just elaborate a little bit
18 on that exchange?
19 BART CAFARELA: I'll try to do my best to
20 clear that up, but I appreciate the opportunity to
21 allow me to do that, Senator.
22 I don't think anyone -- I may have misspoke
23 when I said "it was not that big of a deal."
24 And I don't know how early on it was after
25 the investigation that I sought out Bobby.
57
1 And I will say this, that those of you who
2 know Bobby, and I refer to him as Bobby, he is a
3 very effervescent individual.
4 We've known him in the past, early on, many
5 years prior. So we thought it would be a good idea
6 to speak to him, just to see if there was anything
7 that we could do, should there be an issue, should
8 anyone believe there were housing issues on
9 Long Island, that we would like to be part of the
10 solution and not part of the problem.
11 And that's when the committee issue arose,
12 and he said, look, if we put together a committee,
13 I believe, I think the Nassau County Executive was
14 thinking of putting a committee together, would we
15 like to be part of that?
16 We said we certainly would be honored to do
17 that.
18 So I don't want to characterize him as him
19 saying "not that big of a deal."
20 I don't think anyone -- everyone has taken
21 this very seriously.
22 So I misspoke when I said "he didn't think it
23 was a big deal."
24 Maybe the individual instances, or maybe the
25 way I described it to him, maybe didn't raise his
58
1 level of concern with us.
2 SENATOR SKOUFIS: So just to be clear, in
3 reflecting on the individual cases in your company
4 that "Newsday" -- that was included in the "Newsday"
5 exposé, your feeling is that the commissioner did
6 not have a high level of concern after speaking with
7 you, and seeing the videotapes, regarding your
8 specific agents?
9 BART CAFARELA: No, no, no.
10 Let's take that back.
11 I don't agree with that [indiscernible].
12 Everyone has a high level of concern when it
13 comes to fair housing, including him.
14 I don't think he actually saw any of the
15 videotapes that we were referencing when we met with
16 him.
17 But he always has a level of concern.
18 After all, he is the director of the division
19 of human rights.
20 SENATOR SKOUFIS: And so I guess -- I think
21 I'm more confused now than when I started this line
22 of questioning.
23 So what was his takeaway, in your opinion, of
24 your specific agents' behavior as alleged in the
25 "Newsday" investigation?
59
1 BART CAFARELA: We didn't speak about the
2 specifics. And I don't think we made him aware of
3 specifics, or he knew of the specifics, of the
4 article.
5 We mainly spoke about, if we would like to be
6 on a committee, would we be interested in that?
7 SENATOR SKOUFIS: So there was no
8 conversation about the individual situations?
9 BART CAFARELA: I believe we didn't have
10 conversations about the individual situations, no.
11 SENATOR SKOUFIS: Okay.
12 BART CAFARELA: Again, this was -- this was a
13 while back ago.
14 And once again, if you do know -- if you do
15 know Bobby, he's -- he probably did 95 percent of
16 the talking that day.
17 SENATOR SKOUFIS: Senator Kavanagh.
18 SENATOR KAVANAGH: Thank you,
19 Senator Skoufis.
20 Just a quick question for Mr. Amiryavari.
21 Am I saying that correctly?
22 REZA AMIRYAVARI: Yes, sir.
23 SENATOR KAVANAGH: Okay.
24 You said in your -- in the clip that was
25 shown earlier, you said, you know, some agents --
60
1 you know, you described steering, actually, I think,
2 you know, a solid definition of it.
3 I like thinking about it as a horse rather
4 than a car. I think that's kind of an evocative
5 image.
6 But you said that, you know, "some agents do
7 it." You don't do it.
8 What did you mean by "some agents do it"?
9 Are you aware -- have you seen this behavior
10 in other context?
11 REZA AMIRYAVARI: At the time, being -- this
12 was, mind you, it was about 2016, which was about
13 four years ago, yeah, most agents, and most buyers
14 even, folks that, you know, they were -- they were
15 talking about schools on Long Island. They were
16 actually talking about, asking questions about, the
17 schools, and stuff like that.
18 You know, so that's what I basically meant.
19 SENATOR KAVANAGH: Okay. So you -- so your
20 perception is that -- you know, this was four years
21 ago.
22 Your perception is, at that time, it was not
23 unusual to engage in steering and -- and -- and --
24 REZA AMIRYAVARI: No --
25 SENATOR KAVANAGH: -- among agents --
61
1 REZA AMIRYAVARI: -- no, no, no.
2 No, no, no, no.
3 The word "steering," that's why I went out of
4 my way to explain what "steering" was, because
5 I don't condone it. I do not do that.
6 SENATOR KAVANAGH: No, I understand -- I'm
7 not suggesting you -- you thought it was a good idea
8 for people do it four years ago.
9 But you -- you -- you described it, and then
10 you said "some agents do it."
11 You don't do it, but some agents do it.
12 Is that -- I mean --
13 REZA AMIRYAVARI: I'm saying that the
14 trainings that I took at the time, you know, that
15 nobody, that I remember -- you know, most agents
16 could sort of, and even the buyers, as I said, the
17 buyers that were coming to us and asking questions,
18 they were specifically asking about schools.
19 So we had to indulge them [indiscernible].
20 And then that caused, you know, me to learn
21 about the grading -- the school grading that,
22 actually, "Newsday" published many times, and they
23 were online.
24 And I actually directed these folks, anybody
25 that would come to me, I said that, you know, the
62
1 information is on online --
2 SENATOR KAVANAGH: Right.
3 REZA AMIRYAVARI: -- and you can go and check
4 it, please, and then, you know, you decide.
5 SENATOR KAVANAGH: Okay.
6 So we -- we had -- we had -- we had, you
7 know, several folks last week, including, I think,
8 the entire contingent from Douglas Elliman, tell us
9 they're not aware of any instances of steering
10 anywhere on Long Island or in the industry.
11 I just thought your perception and your
12 testimony was somewhat different.
13 REZA AMIRYAVARI: Sure.
14 SENATOR KAVANAGH: Mr. Cafarela, so you,
15 you know, saw the exchange I had a moment ago with
16 Ms. Petrelli.
17 Do you -- and I -- a follow-up sort of on a
18 question I asked you before: Is it acceptable for
19 an agent to tell somebody that they're not going to
20 like the schools in a particular school district if
21 they're doing that because of their perceptions of
22 resale value in that school district?
23 BART CAFARELA: That's a two-part question.
24 You know, last -- last night I was watching
25 TV, and there was a National Association of Realtor
63
1 commercial on, and promoting local knowledge.
2 Go to a realtor today because of local
3 knowledge.
4 Many buyers, they seek realtors out for local
5 knowledge.
6 That's some of the local knowledge they've
7 always relied on in the past from a realtor, as well
8 as other local knowledge.
9 So, you know, that -- I think it's a two-part
10 question.
11 Resale value plays an important part in
12 purchasing a home, and people want to know about
13 that. And people do want to know about school
14 districts today.
15 We don't talk about school districts today.
16 Was it acceptable four years ago?
17 I probably would say many agents did talk
18 about school districts four years ago.
19 SENATOR KAVANAGH: Has the law -- to your
20 knowledge, has the law on that point changed in the
21 last four years?
22 BART CAFARELA: I'm not aware that the law
23 has changed in the last four years. But the
24 perception of the answers are certainly interpreted
25 differently today than they were four years ago.
64
1 SENATOR KAVANAGH: So -- so, again,
2 Ms. Petrella -- Ms. Petrelli went through a list
3 of school districts that, collectively, were about
4 87 percent White.
5 She then said, you don't -- you're not going
6 to like the schools in Amityville, the racial --
7 Amityville is 34 percent White, it's about
8 22 less -- 22 percentage point less White than the
9 average.
10 If she says to a buyer, "You're not going to
11 like the schools in that district," that can be
12 acceptable depending on what her intention is?
13 BART CAFARELA: I think she made it clear to
14 that buyer what her intentions were.
15 And she did say because of resale value.
16 SENATOR KAVANAGH: She certainly didn't say
17 because of resale value in the clip we saw.
18 But, again --
19 BART CAFARELA: Yeah, well, [simultaneous
20 talking] --
21 SENATOR KAVANAGH: -- if -- if you -- just to
22 be clear, Mr. Cafarela, if I -- if I'm a
23 real-estate agent, and I have a White homebuyer, and
24 I list all the White school districts, and then
25 I say, "Here's a majority-minority school district.
65
1 You're not going to like that majority-minority
2 school district because of the resale values,"
3 that's permissible?
4 BART CAFARELA: Well, of course not.
5 But, Senator, let me just -- let me just say
6 [simultaneous talking] --
7 SENATOR KAVANAGH: No, but, again --
8 [Simultaneous talking by both parties.]
9 BART CAFARELA: -- oh, no, no, no, hang on --
10 hang on one second, if I may.
11 We don't -- we don't have that statistical
12 information. We've never had that, nor do we use
13 that.
14 SENATOR KAVANAGH: -- well, again,
15 Mr. Cafarela, is it -- it is accept -- we,
16 apparently -- you know, Ms. -- Ms. Petrelli has
17 testified that she had a perception of the resale
18 values in that school district.
19 BART CAFARELA: Yeah, and she clearly stated
20 to the buyer, "I'm sure you want a good school
21 district because it's great for resale."
22 She stated the context why that school
23 district.
24 SENATOR KAVANAGH: Ms. Petrelli, may I --
25 If you could unmute yourself for a moment.
66
1 MARGARET PETRELLI: Am I there?
2 SENATOR KAVANAGH: You are -- your picture is
3 gone, but your voice is there.
4 So if you can hear me, that's fine.
5 MARGARET PETRELLI: Okay.
6 SENATOR KAVANAGH: -- you -- do you have
7 any -- any sense of the racial composition of --
8 of -- do you have any sense that Amityville School
9 District may be less White, overall, than some other
10 school districts?
11 SENATOR THOMAS: No, I don't.
12 SENATOR KAVANAGH: You have never noticed
13 anything about -- about Amityville that's different
14 from other communities on Long Island?
15 MARGARET PETRELLI: No, Senator.
16 SENATOR KAVANAGH: Any of the brokers here
17 have any perception of Amityville School District as
18 opposed to other school districts?
19 Mr. -- Mr. Jannace --
20 I'm not sure I'm saying that properly.
21 -- you've been -- you -- you've gotten off
22 easy here.
23 Can you -- do you have a perception of the
24 Amityville School District, and the -- have you ever
25 noticed that Amityville School District is
67
1 two-thirds non-White?
2 JOSEPH JANNACE: Yes.
3 But that has no --
4 SENATOR KAVANAGH: Okay.
5 Mr. --
6 JOSEPH JANNACE: But that has no bearing on
7 showing homes there or not.
8 I show homes to everyone [simultaneous
9 talking] --
10 SENATOR KAVANAGH: -- no, I understand that.
11 But just -- that's something you've noticed.
12 Ms. Petrelli, you have never noticed that
13 Amityville School District is two-thirds non-White?
14 MARGARET PETRELLI: No, respectfully,
15 Senator, I have not.
16 SENATOR KAVANAGH: That's your testimony,
17 that's fine.
18 Mr. Cafarela, are you aware that Amityville
19 School District is two-third -- is somewhat less --
20 at least somewhat less White than other school
21 districts on Long Island?
22 BART CAFARELA: I grew up in Massapequa.
23 I do know that, yes.
24 SENATOR KAVANAGH: Okay, so you know that.
25 And if you know that, and you're -- putting
68
1 aside the clip we saw -- if you know that, and
2 you're advising a homebuyer to avoid that school
3 district because "you're not going to like the
4 schools," are you telling us that that is proper and
5 legal if the reason you're saying that doesn't come
6 from any racial animus; it comes from your
7 perception of the home values in a school district
8 that is majority-minority?
9 BART CAFARELA: In the context of resale
10 values, that's correct.
11 But I -- I think you heard from Peggy and our
12 agents. They're not going to -- they're not going
13 to steer anyone anywhere, regardless of the school
14 districts.
15 But if you saw the entire context, Senator,
16 with all due respect, she asked them to go and check
17 out all the school districts.
18 She was willing to provide that particular
19 tester with phone numbers of schools so they could
20 do their own [indiscernible] and their own
21 assessment.
22 SENATOR KAVANAGH: Okay, again, but
23 Mr. Cafarela, we're talking about the
24 permissibility of a statement, "you're not going to
25 like the schools."
69
1 Your testimony is that, that statement is
2 permissible -- was permissible then, and presumably
3 it's permissible now, because the law hasn't
4 changed, if your -- if it's based on your perception
5 of property values and resale value, rather -- you
6 can -- you can single out a school district as
7 having bad resale value?
8 That's permissible now, and, presumably, it
9 was permissible then?
10 BART CAFARELA: Context to value.
11 Just like it would be north or south or east
12 or west of someplace, or on a main road, it has to
13 do with resale value.
14 And that's what she articulated [simultaneous
15 talking] --
16 SENATOR KAVANAGH: Okay. I'm -- I'm --
17 I think we have a different perception of the law.
18 Mr. Cafarela, are you aware of any studies
19 that suggest that resale value -- changes in resale
20 value is highly correlated to the racial and ethnic
21 composition of neighborhoods?
22 BART CAFARELA: I have not.
23 SENATOR KAVANAGH: Okay.
24 Again, I -- I have 49 seconds left, and we
25 spent a lot of time, both today and last week.
70
1 So I will end there.
2 But I would just -- I would urge you to, you
3 know, read the newspapers.
4 There's -- there's -- there are numerous
5 studies that suggest that -- including a -- I think
6 in the last 72 hours, in "The New York Times," there
7 was a fairly extensive study reported on.
8 And, you know, again, it is a -- it is a
9 widely perceived fact among researchers, and many
10 people in the real-estate industry, that values in
11 homes have increased very substantially in
12 community -- in White communities, and much less so
13 in communities that are much -- are different in
14 their racial and ethnic composition.
15 And so we talked last week with some of our
16 experts, about making sure that, to the extent there
17 is training, that it would be valuable for people to
18 understand that the train -- you know, the impact of
19 the decisions brokers and agents make.
20 And, you know, we're -- we're singling out
21 individual people today, like Ms. Petrelli,
22 because, you know, we have that evidence before it.
23 But there's nothing -- we're not trying to
24 suggest that this is an isolated incident, or that
25 this is especially bad behavior, in the context of
71
1 industry.
2 The whole point here is that, we've had
3 testimony that this kind of behavior is commonplace.
4 And we also have the -- you know, we -- we --
5 we're now hearing that somebody who is licensed in
6 this industry believes it's okay to tell people to
7 avoid a school district based on resale values.
8 And, you know, for me, that suggests an
9 ongoing problem, and a continuing need to make sure
10 people understand the impact of these decisions.
11 BART CAFARELA: So, Senator, I would invite
12 you, [indiscernible], if you would be so kind as to
13 [indiscernible].
14 I will look at that article. I -- and
15 I appreciate you sharing that.
16 SENATOR KAVANAGH: Okay.
17 I'll end there.
18 SENATOR SKOUFIS: Okay. Thank you,
19 Senator Kavanagh.
20 I don't see any other senators who wish to --
21 oh, Senator Tedisco, is that your hand?
22 SENATOR TEDISCO: Yep.
23 As ranker --
24 SENATOR SKOUFIS: Please, go ahead.
25 SENATOR TEDISCO: -- yeah.
72
1 Mr. Cafarela, to you, and thank you for
2 being there and your testimony today.
3 So far I've heard a lot of questions in
4 relationship to what the realtors offer, or
5 suggestions of guiding, in certain ways.
6 But I want to ask you this question, to see
7 if this would be appropriate, because there might be
8 a fine line between what you're asked, and then
9 given the opportunity to give an opinion, or just
10 offering an opinion.
11 If I was to come up to a realtor, or you, and
12 say, "I only want to buy a house, or live in a
13 community where the house I buy has a very high
14 resale value," and then I started to list
15 communities, would it be appropriate for you to say,
16 "You don't want to live in that community" if it had
17 a low resale value?
18 BART CAFARELA: I wouldn't say that, and
19 I wouldn't recommend we say that.
20 I would -- I would suggest they -- the
21 research would -- we would provide some research for
22 that client, and they would make their own decision.
23 SENATOR TEDISCO: If they said --
24 BART CAFARELA: And maybe the research that
25 I was unaware of, that Senator Kavanagh just
73
1 mentioned, may be appropriate to use at that point.
2 We -- we -- we don't generally use all the
3 information that many of you rely on, and that
4 "Newsday" relied on, with racial demographics and
5 breakdowns.
6 And I know "Newsday" provides an extensive
7 school research paper every year, that we don't
8 utilize as well.
9 And we don't, for reasons that, it could
10 alter, and maybe, possibly, cause somebody to say,
11 hey, I didn't realize, you know, maybe I should
12 steer you away from that area.
13 And I know that's a terrible word to say, we
14 don't use that word. But maybe we shouldn't look
15 there because, you know, blah blah blah.
16 We don't use that information at all,
17 Senator.
18 SENATOR TEDISCO: If when you said that to
19 them, "Go do your research," they say, "Well, I just
20 want to know, does this community have a high resale
21 value, or not?" would you answer?
22 BART CAFARELA: Yeah, I would --
23 SENATOR TEDISCO: Would it be illegal -- do
24 you think it's illegal to answer them, no, it has a
25 low resale value, it doesn't have a high resale
74
1 value?
2 BART CAFARELA: If they were to ask me that
3 direct question, and say, "Hey, Bart, you know, does
4 this area have a good resale value?" I would say, my
5 opinion, it may, yeah.
6 Yeah, I would always recommend you go back to
7 the statistics, because that's how I'm basing what
8 I'm suggesting on, and, you know, based on -- based
9 on the facts that I could ascertain.
10 And we have many methods to do that, that are
11 not subjective.
12 SENATOR TEDISCO: If they asked you, "I only
13 want to buy a house in one of the best school
14 districts in this county," and they started to name
15 the school districts, and they said, According to
16 the test scores and the graduation rates, is this
17 school district one of the best in the county?
18 BART CAFARELA: Yeah, we -- we -- we would
19 offer that opinion today.
20 You know, we put together this little --
21 little sheet, that they could research the schools
22 on their own and determine what's important to them.
23 You know, I learned -- I learned long ago in
24 my career that what's important to one person may
25 not be important to another; that it's all their
75
1 personal preferences.
2 But I will -- I will even expand that
3 conversation with you, Senator, at another time if
4 you'd like, because, whether you agree with it or
5 not, school districts play an important role on
6 Long Island. And they play an important role in
7 values, and resale values.
8 And I'm sorry to say, but that's just --
9 that's just -- that's just a fact.
10 SENATOR TEDISCO: So when -- when one of your
11 realtors was asked -- or, there was an interest in
12 school districts, and she mentioned -- happened to
13 mention 87 percent of them, and they happened to be
14 White, but they also happened to be the best school
15 districts that the person was interested in, why
16 wouldn't that not be appropriate?
17 BART CAFARELA: I -- first of all, I don't
18 think anyone -- anyone knows that those school
19 districts are 87 percent White.
20 We certainly didn't know it.
21 One of the -- the interesting facts we
22 learned through the "Newsday" investigation is the
23 demographic breakdown of these neighborhoods that
24 we -- we -- we provided listings for to people.
25 We -- we didn't realize the racial makeup of
76
1 these neighborhoods.
2 "Newsday" provided us that information, based
3 on their study.
4 We don't know that. We don't have -- we
5 don't provide access to that. I wouldn't even know
6 where to go get -- to get access to that.
7 So -- it just so happens that maybe they all
8 were 87 percent. And maybe that's the whole south
9 shore of Nassau County. I don't know.
10 SENATOR TEDISCO: And I took your point when
11 someone asked about the town or community of Elmont.
12 Was that what it was about?
13 And he said, "You wouldn't want to live
14 there."
15 You said, I'd have to go back to the tape.
16 BART CAFARELA: Yeah.
17 SENATOR TEDISCO: And when you said "go back
18 to the tape," did you mean a whole series of things
19 that the person said?
20 I'll give you an example, which just making
21 up out of my hand: I don't want to buy a house
22 where they have houses close to each other. Or,
23 I don't want to buy a house that has very small
24 lawns. I want larger lawns.
25 And then later on in the conversation, the
77
1 realtor said, Well, you don't want to go to Elmont.
2 It might have nothing to do with the racial
3 content.
4 It might do with, it has small lawns and
5 houses very close together.
6 Wouldn't that be the case?
7 BART CAFARELA: Could be, yes.
8 SENATOR TEDISCO: Okay.
9 Thank you very much. Appreciate your input.
10 BART CAFARELA: Thank you.
11 SENATOR SKOUFIS: Thank you, Senator.
12 I think, barring any last-minute questions,
13 co-chairs, are you okay?
14 SENATOR KAVANAGH: Can I -- can I just, if
15 I may, just one more, based on [indiscernible].
16 So, again, Mr. Cafarela -- and with
17 apologies to all watching for the
18 waiveringness [sic] -- but are you troubled at all
19 that -- again, this -- these were matched testers.
20 So Ms. Petrelli had a White homebuyer with
21 children, and a Black homebuyer with children.
22 And she specifically told the White homebuyer
23 to avoid Amityville, which in your -- which she may
24 not have been aware, she testifies, but you're
25 aware, is significantly a majority-minority
78
1 district, that "you're not going to like those
2 schools."
3 And she doesn't tell the Black homebuyer
4 that, even though they also have schools.
5 Is that because -- do you think that's
6 because Black homebuyers aren't concerned about
7 resale value and White homebuyers are?
8 Does it trouble you at all that -- that --
9 that "you're not going to like these schools" is
10 said to a White homebuyer to [sic] children, but not
11 to a Black homebuyer with children?
12 BART CAFARELA: I was troubled by that, yes.
13 SENATOR KAVANAGH: So, again, having reviewed
14 this material, you know, you testified before that
15 you think that the material in the investigation
16 requires changes -- you know, it requires you to
17 change, to rethink, to sort of get up with the
18 times, sort of, but that no -- you know there, was
19 no improper behavior by any agent.
20 And it's just -- it's -- it's perplexing
21 that, you know, I'm not sure what the distinction
22 between being troubled by it and not finding it
23 improper is.
24 BART CAFARELA: Yeah.
25 I would -- you know, again, the full context
79
1 of that, and the conversations, and understanding
2 it, I -- I -- I felt okay with -- I felt troubled by
3 it. On its outset, it looks very troubling, and
4 everything seems to be what it seems to appear.
5 But like I said in my opening remarks, we not
6 only want to go to above the letter of the law, we
7 also want to go to the spirit of the law.
8 And that's why, as the broker of this
9 organization, I -- I -- I may have -- I may have
10 gone a little overboard with fair housing, but
11 I don't think I could ever go overboard because it
12 is that important of an issue.
13 And I'm sure Peggy would never say that
14 comment again in relation to values, home styles or,
15 any, any, any sort of indication, because it can be
16 construed, and it can appear to be racist.
17 And that's one of the things we learned with
18 implicit bias: What you mean and what you say, and
19 how it's interpreted, could be two completely
20 difference things, as we are learning here today.
21 So, you know, our agents are -- are -- they
22 have to be much more -- much more conscientious of
23 exactly how they present themselves, and present
24 everything to a buyer, because it could be construed
25 differently than what it's meant.
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1 SENATOR KAVANAGH: If your agents or your
2 company treat Black homebuyers and White homebuyers
3 differently, as a -- and there's a pattern of that,
4 is that a violation of the fair-housing laws even if
5 nobody intends to discriminate?
6 BART CAFARELA: It is.
7 Yes, it would.
8 Yes.
9 SENATOR KAVANAGH: Okay. So you can -- you
10 can -- you can violate the law, in your current
11 understanding, without intending to disadvantage the
12 homebuyers?
13 If you treat them differently, if you --
14 if -- if that behavior that we saw in those tapes
15 became systemic, where White homebuyers with
16 children were told, "you're not going to like the
17 Amityville school districts" -- "the School
18 District," but you're not going to like the
19 Amityville schools, but, Black homebuyers were less
20 likely to be told that, that would be a violation of
21 the fair-housing laws?
22 BART CAFARELA: I'm not sure of the question.
23 If the question is, is -- is -- did I intend
24 to hit that person on the sidewalk?
25 No.
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1 But in my -- but I drank too much that day
2 and I hit them. So -- but it wasn't my intention to
3 hit them.
4 Now, I'm not clear in what you're asking.
5 SENATOR KAVANAGH: I -- I -- I suspect you're
6 not a criminal defense attorney.
7 "I'm pretty sure I was drunk, and I hit
8 them," isn't a very good defense in an assault case.
9 But it -- just to keep it in the context of
10 fair housing, it is not -- in your view, it is -- it
11 does not require an intent to discriminate, to
12 disadvantage, Black homebuyers in order to violate,
13 not just the spirit, but the letter of the
14 fair-housing law.
15 Is that your understanding today?
16 BART CAFARELA: I'm not sure what you're
17 asking me about.
18 But I will say that --
19 SENATOR KAVANAGH: I'm asking whether -- I'm
20 asking whether, in a -- in a -- in a -- in a
21 decision about whether a particular activity
22 violates the fair-housing law, is it necessary to
23 show that the person who is accused of violating the
24 fair-housing law intended to discriminate, intended
25 to disadvantage, one homebuyer over another?
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1 BART CAFARELA: Yeah, I think the intent is
2 irrelevant today.
3 SENATOR KAVANAGH: You think it's irrelevant,
4 or relevant?
5 BART CAFARELA: I don't think it's -- I think
6 today, if it's a clear-cut case of violation or
7 discrimination because one is Black and one is
8 White, I'm not interested in the intent.
9 SENATOR KAVANAGH: It doesn't matter the
10 intent.
11 And, again, the law -- as far as you know,
12 the law on that has not changed in the last
13 five years?
14 BART CAFARELA: I don't -- not in that
15 respect, no, Senator, the law has not changed.
16 SENATOR KAVANAGH: Okay.
17 Thank you.
18 I think that's all I have.
19 BART CAFARELA: Thank you.
20 SENATOR SKOUFIS: Thank you.
21 I do want to ask Mr. Jannace a couple of
22 questions. We haven't heard too much from you.
23 At the -- when the "Newsday" investigation
24 was released, you, and I think everyone, was
25 provided an opportunity to view their findings, and
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1 comment.
2 It does appear as though you took up their
3 offer to view what they had, but that you declined
4 to comment.
5 Can you just talk about why you declined?
6 Can you describe -- I don't think we've had
7 any of the agents so far, today or last week,
8 describe what that interaction was like with
9 "Newsday" when everything came out?
10 JOSEPH JANNACE: Well, we originally got a
11 letter, telling us that we were being investigated
12 by "Newsday," and the statistics.
13 I was devastated when I got that letter.
14 I was sitting in my den with my wife, and
15 I was -- my dad marched with Martin Luther King in
16 Washington.
17 I mean, I was raised that you treat everyone
18 the same.
19 And all of a sudden I'm being called racist,
20 or steering. And it devastated me.
21 And my wife turned around and said: Go into
22 the den -- into the living room and see who's there.
23 My teenage daughter had three friends there.
24 It was like the United Nations.
25 I've always treated everyone the same way.
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1 And then to have a newspaper say I did
2 something wrong, so I wanted to go see what I did
3 wrong.
4 When I got there, they wouldn't let me bring
5 my phone in so I could record what was being said.
6 I had to go through a metal detector.
7 I had -- they put me in a room where a woman
8 kept looking at me every couple of minutes to make
9 sure I wasn't touching anything.
10 And I wrote notes down.
11 And what I did was, I wrote everything I said
12 with the Black reporter on a piece of paper, in one
13 column. And then when they played the White
14 reporter, I highlighted the exact same things
15 I said.
16 I treated them both the exact same way.
17 So, now, why wouldn't I give them a response?
18 I thought they were prejudice.
19 I thought they were looking for headlines.
20 I thought they were trying to sensationalize.
21 I'm not saying steering and racism is right.
22 I'm not condoning that at all.
23 But they were looking to sell newspapers.
24 And my feeling, and when I spoke to my
25 attorney -- my personal attorney before that,
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1 anything I was going to say, they would have twist
2 and put there their benefit, and make me look bad.
3 So why should I make any statements at all?
4 Very honestly, I have no idea why I was even
5 mentioned in the "Newsday" story.
6 I treated both people -- if you watch the
7 videos, you saw I treated both of them the same.
8 So I have no idea.
9 They both looked for different requirements,
10 they both asked for different things.
11 So to go there and give "Newsday" more to put
12 into their paper to make me look bad, no, I wouldn't
13 go on the record with them.
14 So I hope that answers it.
15 SENATOR SKOUFIS: It does -- that does answer
16 it.
17 JOSEPH JANNACE: I'm sorry I'm a little
18 emotional, because, quite honestly, it's been, for
19 the last year and a half, having to sit down with
20 your children and tell them you have been accused of
21 something, when you know it's false, that's not --
22 it's wrong.
23 And what they did to me and to my family, it
24 was wrong, and I don't appreciate it.
25 I appreciate you giving me -- this is the
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1 first time I've had the chance to defend myself in
2 two years, and I thank you so much for that.
3 SENATOR SKOUFIS: Thank you, and that does
4 answer any question.
5 And for whatever it's worth, you know,
6 I think the fact that 98 percent of our questions
7 thus far have been trained at the rest of the panel,
8 I think may be a reflection of, you know, the
9 varying levels of concern that we have as committees
10 and co-chairs with the evidence that we have seen.
11 So, if I may --
12 JOSEPH JANNACE: Thank you, Senator.
13 SENATOR SKOUFIS: -- what do you make of what
14 we have heard today at this, sort of, part two of
15 the hearing?
16 I don't know if you watched last week.
17 Certainly we tried to get this panel into last
18 week's hearing.
19 But if you did watch, I'd love to hear what
20 you thought of last week.
21 And what do you make of, just generally, the
22 fact that it appears as though, and putting aside
23 your situation, looking at everyone else around you
24 today, last week if you did tune in, the broader
25 "Newsday" investigation, what do you make of the
87
1 fact that it seems as though there was not a single
2 agent disciplined after all of this?
3 Clearly, and I think we've gathered this from
4 a number of the panelists today, your colleagues,
5 that there is some acknowledgment that steering
6 exists.
7 Not a single agent -- I mean, perhaps you
8 and, you know, a number of others could argue that
9 the allegations were not credible.
10 But to suggest that every single allegation
11 in the "Newsday" exposé was not credible I think is
12 outrageous and outlandish.
13 JOSEPH JANNACE: I agree.
14 SENATOR SKOUFIS: So what do you make of the
15 fact that not a single person lost their job, not a
16 single person was disciplined?
17 JOSEPH JANNACE: Well, you know, I can't
18 speak for other real-estate companies, and I can't
19 speak for other individuals.
20 But I think you expecting the brokers to do
21 something, when there is State hearings that are
22 pending before them, when there's board of realtors'
23 hearings before them, you're asking them to make a
24 determination on someone's innocence or guilt based
25 on a newspaper article or tape.
88
1 And, meanwhile, how could someone -- if a
2 broker terminates their agent, they're admitting to
3 the department of state that they made a mistake.
4 So as long as there are open investigations,
5 you can't have people -- it's like putting them at a
6 double-edge sword.
7 But I will say this, someone -- the
8 number-one question that's asked to every
9 real-estate broker by every customer is:
10 How are the schools?
11 What are the schools like?
12 And I always tell them, go speak to the
13 administrators.
14 But when agents are asked those questions
15 every single day, by somebody, the public has to be
16 made aware that agents aren't allowed to answer
17 those questions, in addition to us being trained not
18 to answer them.
19 But we are asked those questions every single
20 day by almost every customer.
21 SENATOR SKOUFIS: I'd like to just -- thank
22 you for that answer.
23 Can I just hone in on the first part of what
24 you just said.
25 So you believe that the reason why we haven't
89
1 seen any discipline from brokers with their agents
2 is concern that that discipline might preempt the --
3 either hearings or attorney general's investigation
4 or the state agency oversight.
5 That's the reason why you think that there
6 hasn't been discipline?
7 JOSEPH JANNACE: Well, I used to own my own
8 company at one time, with three offices.
9 And I wouldn't put my -- yeah, I would think
10 that, if I -- if a broker acknowledges something,
11 you're putting them in a position where they now
12 admitted they did something wrong, before the
13 department of state and the board of realtors.
14 So until everything plays out --
15 SENATOR SKOUFIS: Mr. Cafarela, is --
16 JOSEPH JANNACE: -- you really can't have ...
17 SENATOR SKOUFIS: Thank you for that.
18 Mr. Cafarela, is -- is that -- do you agree
19 with that statement?
20 Is that why there has been no discipline in
21 your company; not because of, contrary to what you
22 have said over the past hour and a half, contrary
23 to, you know, what you've said, which is, you know,
24 I don't believe that any of the behavior rose to
25 levels of discipline?
90
1 Have you not taken discipline because you did
2 not want to preempt these other investigations?
3 BART CAFARELA: No, absolutely not.
4 No.
5 And I fully understand my responsibilities as
6 the broker here.
7 And, you know, that's not the reason at all.
8 We actually chose to take the education
9 route, because I do believe, what I have learned
10 throughout this process, Senator, is we could talk a
11 lot about intentions and implicit biases.
12 And Elaine Gross's program really pointed out
13 implicit biases, and I think -- that we all have.
14 And is that an excuse for -- is that another
15 way of saying it's unintentional? No.
16 But I think -- I can't comment -- like Joe
17 said, I can't comment on the other brokers'
18 situations, only because I haven't looked into them.
19 I was concerned about my three agents and
20 their conduct. And I wanted to make sure that I was
21 satisfied that everyone was -- was fine with that.
22 SENATOR SKOUFIS: Let me ask you, if I may,
23 so say one of these state investigations, attorney
24 general, department of state, whoever it might be,
25 comes down and does find violations, and revokes one
91
1 of your agent's licenses.
2 What's going to be your response to that?
3 I mean, do you remain defiant at that point
4 that, you know, they did nothing wrong?
5 Or do you perhaps reflect, well, maybe
6 I wasn't looking at this properly, and I should have
7 taken some disciplinary action?
8 What's going to be your response if that
9 happens?
10 BART CAFARELA: I don't expect that to
11 happen, and I'm not sure what my response would be,
12 because I'm not sure I understand the question, if
13 one of our agents are found to be guilty in one
14 [indiscernible] form or fashion.
15 I'll -- listen, we -- we've kind of --
16 I think we maybe see things a little bit different
17 here.
18 And I know the prism you're looking through
19 everything here as well.
20 So we -- we -- I couldn't give you that
21 answer right now.
22 SENATOR SKOUFIS: Okay. Fair enough.
23 Senator Kavanagh or Thomas, do you have
24 anything further?
25 SENATOR KAVANAGH: No. I think I'm done with
92
1 questions, other than, you know, thank you to all
2 the panelists for, you know, participating today.
3 SENATOR SKOUFIS: Senator Thomas?
4 SENATOR THOMAS: I have a few questions for
5 Mr. Cafarela.
6 Sorry.
7 SENATOR SKOUFIS: Don't apologize.
8 Go ahead.
9 SENATOR THOMAS: So just going back to our
10 original questioning -- right? -- about the
11 supervisory ability, how do you otherwise keep tabs
12 on what an agent says that could be disparate or
13 even unintentionally discriminatory?
14 Like, how do you keep tabs on these things?
15 BART CAFARELA: You know, most of the work
16 being done today is being done from home right now,
17 so it's almost impossible to keep tabs on
18 conversations people have.
19 We don't censor their phone calls, we don't
20 censor their e-mails.
21 So I don't understand that.
22 We can't keep tabs on conversations.
23 SENATOR THOMAS: Okay.
24 BART CAFARELA: The best I -- we try to
25 attempt to do, Senator, is we -- we -- we try to
93
1 train them over and over and over again, and teach
2 them, and let them know that, should any issue --
3 today, should any situation come up that they're not
4 sure how to handle, they know where to go for those
5 answers.
6 SENATOR THOMAS: So last week during some
7 testimony, a number of agents testified that their
8 training was inadequate.
9 Can you talk about the trainings that you
10 give your agents?
11 BART CAFARELA: I can.
12 We provided -- there you go (holding up a
13 stack of documents) -- a lot of samples to Senator
14 Skoufis of what we've done.
15 Most of the trainings we do are broker-given
16 trainings and experts out of the real-estate
17 business.
18 If you want to talk directly about the
19 fair-housing training, in my opening remarks, we
20 have done a tremendous amount of that over the year.
21 We've quite -- we really stepped it up now
22 with our online program, because I believe the
23 State -- the State-mandated training, and the
24 approved training from the State, is somewhat
25 outdated and certainly ineffective.
94
1 SENATOR THOMAS: Okay.
2 BART CAFARELA: Because it's compliance
3 training, and I have been through those courses.
4 I think some of the investigators have been
5 through those courses.
6 And we realized that it's just not cutting it
7 in the real world today, and we can do a better job.
8 We've taken it upon ourselves do that, at
9 great cost and expense and time allocated to this.
10 And I would -- I offer the training to the
11 division of human rights, to take a look at it, to
12 make sure it meets with their approval.
13 And I would do the same with you, Senator.
14 SENATOR THOMAS: Okay.
15 Mr. Cafarela, thank you for that answer.
16 Now, can you tell me if any of the agents,
17 like, when they go into the training, they feel like
18 they're confident enough after the training to sell
19 a house?
20 Like, do you get any sort of like feedback on
21 their trainings?
22 Because we heard from a number of agents that
23 they were inadequate. They just had an attorney
24 spew a lot of legalese, and they were just on their
25 own.
95
1 BART CAFARELA: Yeah, good question, Senator.
2 Thank you.
3 Our organization doesn't -- we rarely --
4 I shouldn't say never -- we rarely take on brand-new
5 licensees.
6 Most of the agents that join our firm have
7 some field experience and have worked in other
8 companies.
9 This type of training both my partner and
10 myself do tremendously.
11 We do our own -- do a lot of the fair-housing
12 training ourselves so it can be interpreted into
13 real-life situations.
14 We don't put people in a room, sit down,
15 here's 10 hours worth of training. They come out.
16 What have they learned?
17 They really don't learn.
18 So when we developed our current program,
19 I -- I -- I did a lot of research on this. And
20 I not only wanted a program that was effective, but
21 I wanted to make sure our agents understood what was
22 being taught.
23 So our internal program has questions and
24 answers, so they make sure -- there's testing in our
25 program, that if you don't pass the test, you have
96
1 to take the program over again.
2 And we're able to do this and monitor this
3 program, you know, over the Internet, so they
4 understand exactly what we are trying to teach them.
5 And it's not the compliance training that the
6 State would provide.
7 It's our internal real-life training, and it
8 talks about what happens, and we'd like to think it
9 talks about real life.
10 SENATOR THOMAS: Would --
11 BART CAFARELA: As -- if I may, I know I'm
12 long-winded with this, but I'm a little passionate
13 about this.
14 SENATOR THOMAS: Got it. I understand.
15 But, you know, my time is limited here.
16 BART CAFARELA: Okay. I appreciate that.
17 Maybe we can meet at another day, then,
18 because I know you're local.
19 SENATOR THOMAS: Yes.
20 Now, in terms of one-on-one trainings, do you
21 give those to sales agents?
22 BART CAFARELA: We do. [Indiscernible]
23 agents individually as well.
24 SENATOR THOMAS: Okay. And how often is that
25 done?
97
1 BART CAFARELA: As needed.
2 SENATOR THOMAS: As needed.
3 Does it have to specifically request for
4 one-on-one, or is it like part of the training
5 regimen that you have?
6 BART CAFARELA: They request a one-on-one.
7 They would request it, yeah.
8 SENATOR THOMAS: Would you recommend, after
9 all of this, that it be not a request, but mandatory
10 that they do a one-on-one with an experienced sales
11 agent before they go out?
12 BART CAFARELA: Well, that's exactly how we
13 do it, Senator.
14 We -- like I said earlier, most of our agents
15 are experienced.
16 Any brand-new licensee that we take on, which
17 is very few, they do work with an experienced agent.
18 SENATOR THOMAS: Okay.
19 So --
20 BART CAFARELA: So we don't -- I'm sorry.
21 So we don't just put them in a two-week
22 training program and throw them out to the street.
23 No, that doesn't happen.
24 SENATOR THOMAS: Going back to the number of
25 agents that work under your brokering license --
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1 right? -- do you believe that you can supervise 400?
2 Is that like something that you can actually do?
3 BART CAFARELA: Yeah, a lot of people ask
4 that question, how do we do that?
5 We do it quite effectively through a lot
6 of -- because our organization was built to support
7 our sales people, and to supervise our sales people.
8 So it's -- we -- that's the primary role of
9 my partner and myself to do that, along with our
10 administrative staff to help us with that.
11 So that's what we do.
12 SENATOR THOMAS: Do you think [indiscernible]
13 if we were to introduce legislation to limit the
14 number of people working under your license, would
15 that be an issue for you guys?
16 BART CAFARELA: I -- well, you're asking an
17 opinion now, and I -- I'd -- I would love to talk to
18 you at another time about that, quite frankly,
19 Senator, because I don't think that would be
20 effective in your ultimate goal.
21 SENATOR THOMAS: Well, ultimate goal is to
22 make sure this doesn't happen again.
23 And I think that, from listening to a lot of
24 testimony here for the past -- I mean, today and
25 last week, it just seems that, you know, there are
99
1 way too many people that you guys have to supervise,
2 and it's just not adequate enough.
3 So, thank you for your responses.
4 And over to you, Senator Skoufis.
5 SENATOR SKOUFIS: Okay. We'll go out for one
6 last call.
7 Any final questions?
8 Seeing no hands, I want to thank each of you
9 for your testimony.
10 It's been almost two hours.
11 And, you know, I think this was informative,
12 it was enlightening, and we appreciate the answers.
13 We know that sometimes you have been on the
14 hot seat these past couple of hours, but we do thank
15 you for it.
16 It helps us inform our path forward now, as
17 legislators, in how to respond to, you know, what
18 we've seen and heard.
19 So thank you very much for being with us.
20 BART CAFARELA: Thank you.
21 JOSEPH JANNACE: Thank you.
22 SENATOR SKOUFIS: I want to thank everyone
23 for -- for -- who are tuned in, for tuning in.
24 And I want to particularly thank my two
25 co-chairs, Senator Thomas and Senator Kavanagh, and
100
1 our staffs, at central staff, who, as usual with
2 these very substantive hearings, put in an enormous
3 amount of work, helping us make sure that these run
4 smoothly, and properly, and that we maximize our
5 benefit, and get all the information that we're
6 looking for.
7 [Indiscernible.]
8 SENATOR KAVANAGH: Great.
9 And I would -- yeah, I would just echo the
10 sentiments [indiscernible].
11 Thank you, Senator Skoufis and
12 Senator Thomas, and all of the work from
13 Andra Stanley, our committee counsel, and housing,
14 and all the other committees.
15 It's been a great collaborative effort.
16 I would also just would remind folks who are
17 tuned in, that, you know, we began last week's --
18 the beginning of this hearing, by saying we have a
19 number of legislative solutions. A couple of them
20 have been mentioned today.
21 But we will be pursuing those as well.
22 So -- but, again, thank -- thank you
23 everybody who has been involved in this.
24 SENATOR SKOUFIS: Are you good,
25 Senator Thomas?
101
1 SENATOR THOMAS: Yes.
2 Thank you so much to everyone.
3 Thank you to staff.
4 Thank you to central staff for getting this
5 panel here after last week's debacle.
6 And thank you, everyone, that testified.
7 God bless.
8 SENATOR SKOUFIS: Okay.
9 See you all soon.
10 Thanks very much.
11
12 (Whereupon, the joint virtual public
13 hearing concluded, and adjourned.)
14
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