At a time when many cities are cutting costs, Union City, New Jersey, nicknamed "Havana on the Hudson", appears to be wasting money.

Fox 5's Arnold Diaz, in an investigation that spanned four months, found the Union City's mayor is playing favorites at taxpayers’ expense.

The mayor's ex-wife, who is not a city employee, was driving a municipal car. She runs a daycare center housed in a city-owned building. And the center doesn't pay any rent to the city.

Located just across the river from Manhattan, Union City is the most densely populated city in the United States. 67,000 residents, 80 percent of them Latino, live in an area just over one square mile.

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