We've reported extensively here on allegations of cronyism and other problems with the Department of Housing and Urban Development's work in post-Katrina New Orleans -- problems that culminated in the resignation earlier this year of former HUD Secretary Alphonso Jackson, who remains under criminal investigation for his role in questionable contracts in New Orleans, Philadelphia and the Virgin Islands.

This weekend, the Washington Post disclosed new problems with HUD's operations. They appear to be related to the agency's efforts to boost contracts awarded to minority-owned companies while disregarding concerns about qualifications raised by longtime HUD contracting staff:

The contract awards that staff members questioned took place within programs, heavily promoted by Jackson, to help small, minority-owned businesses get a bigger share of the roughly $1 billion in public contracts HUD awards each year. During Jackson's tenure, the proportion of contracts awarded to small black- and Hispanic-owned businesses, including under the Section 8(a) program, rose from 6 percent to nearly 35 percent. The proportion of contracts open to full competition decreased from 71 percent to 33 percent, federal records show.

The paper's examination of HUD contracts found three firms that won hundreds of millions of dollars in contracts under Jackson while career contracting staff repeatedly raised concerns about their qualifications. The firms, all based in the South, are:

* Harrington, Moran and Barksdale Inc. (HMBI), an Arlington, Texas-based company that's led by two former Reagan administration officials and has close relations with senior Republican appointees at HUD. In 2004, the company -- which had previously managed only a handful of apartment buildings and development projects -- landed $71 million in HUD contracts overseeing the upkeep and sale of defaulted homes.

* National Housing Group, a Miami-based property management firm that's contributed generously to GOP campaigns, won $50 million in contracts from 2003 to 2007. Its second-highest executive has been indicted for allegedly falsifying reimbursement requests to HUD.

* Drayton, Drayton & Lamar of Georgia had received about $1 million in HUD business through 2002. But since 2003, it landed $35 million in data-technology and information-management contracts at HUD despite concerns about its performance. "Its president has socialized with a HUD official," the Post noted.

It also appears that HUD brass retaliated against lower-level employees who voiced objections to the deals. For example, when veteran agency contracting specialist Gloria Freeman repeatedly raised concerns about HMBI, she was transferred to a policy job and later retired. And when Ed Girovasi -- a 33-year HUD employee -- was asked to review an NHG claim for $8 million, he concluded the firm had exaggerated and actually owed HUD $250,000. He too was transferred to a policy position and later retired.

Labels: Alphonso Jackson, contracting, housing, HUD

On Friday, President Bush announced his nominee to replace outgoing Housing and Urban Development Secretary Alphonso Jackson, who resigned while under investigation for illegal partisanship and cronyism in the provision of contracts. Jackson was also criticized by low-income housing advocates for pushing a plan to tear down public housing complexes in New Orleans that were barely damaged by Hurricane Katrina and replace them with mixed-income developments with less room for the poor -- a plan that's now faltering due to the credit crunch.

Bush's choice is Steven Preston, currently head of the Small Business Administration and a former executive with ServiceMaster and an investment banker with Lehman Brothers. Preston came to the SBA in 2006, at a time when the agency was under fire for its slow response to requests for loans from small businesses and homeowners impacted by Katrina. Shortly after he took over, the backlog of loan requests fell by 80 percent and its response times increased by 90 percent, as Bush noted during the press conference announcing the appointment:

Steve Preston is an experienced manager who knows what to do. He knows how to tackle a problem, devise a solution and get results. That's exactly the kind of leadership I was looking for.

The nomination was met with cautious praise from the U.S. Senators representing Louisiana. Democrat Mary Landrieu called Preston a "willing and able partner" and said she hoped HUD would be a "better partner" under his leadership, while Republican David Vitter said he was "encouraged" by Preston's "track record as a reformer and problem solver."

But others in Congress were less optimistic about Bush's choice. Noting that the United States faces the biggest housing crisis in recent history, Sen. Christopher Dodd, a Connecticut Democrat who chairs the Committee on Banking, Housing and Urban Affairs, said the nation needs a leader with expertise in housing issue, "yet the President’s choice has no apparent housing background, which raises questions." Rep. Nydia Velazquez, a New York Democrat who chairs the House Small Business Committee, was even less charitable in her assessment of the nomination:

Trading one troubled agency for another is short-sighted, and it could not come at a worse time for the American people. HUD’s crisis must be resolved without delay. But the fact remains the agency Mr. Preston has been responsible for leading is still plagued by serious problems of its own. Large businesses continue getting small business contracts, SBA’s Katrina disaster relief program is a failure, and morale of the agency’s personnel is one of the lowest in the federal government.

Indeed, while the President focused on Preston's achievement in reducing the backlog of Katrina-related loan requests, the SBA under his leadership was lax in preparations for future disasters. In a report on the agency released last February, the Government Accountability Office acknowledged improvements under Preston but noted that the SBA still lacked a timetable for completing a disaster management plan.

In an interview with Newsweek magazine, National Low Income Housing Coalition Director Sheila Crowley discussed the serious problems with housing since Katrina, including Jackson's poor handling of the region's federally assisted housing. She shared her wishes for what Preston's priorities would be:

I have high hopes he'll roll up his sleeves and dig into the Katrina mess, given that he has knowledge from another agency perspective. We'd also like to see immediate attention to issues related to getting adequate funding for public housing agencies. What HUD has lacked for the past eight years is an agency secretary who is an advocate for the agency's programs and who cared that the programs they worked for served the American public. And what we're looking for in a secretary is someone who has that commitment.

Will Preston be that someone? Time will tell.

(Photo of Preston and Bush from www.whitehouse.gov)

Labels: Alphonso Jackson, Gulf Coast Reconstruction Watch, housing, HUD, public housing, Steve Preston

As Facing South readers know, federal leaders -- most notably Alphonso Jackson, who announced his resignation last Monday under a cloud of scandal from his perch at Housing and Urban Development -- successfully pushed last year for the demolition of nearly 5,000 units of public housing in New Orleans, even though they were barely affected by Hurricane Katrina.

The dreary NOLA public housing buildings had few fans, but for thousands of displaced, low-income Katrina victims, they were a quick, affordable and ostensibly dependable option.

HUD and the city's plan to replace the units with "mixed-income" housing had none of these benefits. Building new housing would take time, something victims living in toxic FEMA trailers didn't have. There was no promise the new units would be affordable to the poor.

And now, it's not even clear they'll be built at all, or at least anytime soon. According to a report in the Times-Picayune yesterday, the new plans -- which depend heavily on private investment -- have been derailed by the national housing credit crunch:

Although demolition of the sturdy brick buildings at Lafitte is scheduled to begin this week, developers still have not secured all of the financing to replace the "big four" public housing complexes with mixed-income communities.

The rapid decline in financial markets has upset plans developers made last year to remake the public housing developments with a mix of public and private money. Since the City Council voted to demolish the complexes late last year, a spiraling credit crisis has made banks uneasy about making new loans. Meanwhile, the value of low-income housing tax credits that will be used to finance the projects has declined.

Another blow to the "trickle down" recovery approach favored by the priests of privatization. Inspiring even less confidence is the fact that Mayor Nagin didn't require the developers to prove they had the money to rebuild:

In December, Mayor Ray Nagin required developers to submit copies of financing plans before the city would issue demolition permits, but those were not signed deals proving that the financing was actually in place.

The Times-Picayune filed a public records request for copies of the financing plans submitted by each developer, but the mayor's office did not make them available within three days as required by law.

Labels: Alphonso Jackson, HUD, new orleans, public housing, ray nagin

The following statement is from the Advancement Project, a civil rights group that filed a lawsuit against U.S. Department of Housing and Urban Development Secretary Alphonso Jackson on behalf of New Orleans public housing residents shut out of their homes after Hurricane Katrina. Under investigation for alleged corruption and cronyism in contracting decisions, Jackson announced yesterday that he is resigning April 18. The Advancement Project points out that while the Katrina disaster caused the worst affordable housing crisis in recent history, HUD responded by demolishing thousands of habitable public units accessible to the poor and championing a redevelopment plan that replaces only 20 percent of them:

Alphonso Jackson will be most remembered for having turned his back on the people of New Orleans. We are glad to see him go, but the damage has been done. The people suffering, without a place to call home, are the people of New Orleans; the thousands of families who lived in public housing before Katrina and the working poor, many of whom remain displaced outside the city they used to call home.

While it is HUD's mission to provide affordable housing across the country, the exact opposite took place in the recovery and rebuilding of New Orleans. It therefore comes as no surprise that Jackson is under criminal investigation for his post-Katrina dealings. HUD agents, city officials, and developers appeared to have colluded in the largest Black removal in U.S. history. HUD's intent in New Orleans was never to bring back the majority-black and working poor residents of New Orleans. In the storm’s aftermath, when Jackson said that "New Orleans was not going to be as black as it had been for a long time, if ever again," we realized that we had to fight for people's right to return home.

In addition to the lawsuit filed by the Advancement Project, residents organized themselves and met with members of Congress, including Representative Maxine Waters (D-Calif.), who took the lead to pass the Gulf Coast Hurricane Housing Recovery Act of 2007 in the House. The legislation, opposed by HUD and now stuck in the Senate, would provide for one-for-one replacement of demolished units.

Secretary Jackson's resignation and tarnished tenure as the nation's housing chief should be a call to action for HUD to reverse decisions made in New Orleans and the Gulf Coast. With the change in leadership, HUD now has the opportunity to fulfill its mission and provide affordable housing for families who are still in desperate need.

(Photo by Craig Morse courtesy of survivorsvillage.com.)

Labels: Alphonso Jackson, conflict of interest, cronyism, Department of Housing and Urban Development, Gulf Coast Reconstruction Watch, HUD, Hurricane Katrina, new orleans, public housing

U.S. Housing and Urban Development Secretary Alphonso Jackson announced today that he is stepping down to "attend more diligently to personal and family matters." The last day in office for the nation's scandal-plagued HUD secretary will be April 18.

The announcement comes just over a week after Senate Banking Committee Chairman Chris Dodd of Connecticut and Senate Appropriations Committee member Patty Murray of Washington requested Jackson's resignation, saying the various controversies engulfing the secretary were complicating efforts to address the national mortgage crisis and related recession.

A Texas native and longtime friend of President Bush, Jackson is currently under investigation by the Federal Bureau of Investigation, the HUD Inspector General, a federal grand jury and prosecutors from the Justice Department's Public Integrity Section for alleged conflicts of interest involving the controversial redevelopment of public housing in New Orleans and the Virgin Islands. In New Orleans, HUD awarded a $127 million deal to Columbia Residential, an Atlanta firm for which Jackson worked and that still owes him at least $250,000. The probe focuses on whether Jackson lied to Congress when he testified that he was not directly involved in contracting decisions.

Federal agents are also investigating whether Jackson arranged work for friends. One of them, contractor William Hairston of South Carolina, landed a profitable deal with the Housing Authority of New Orleans, which is under HUD control. The National Journal has reported that investigators are also examining financial ties between Jackson's wife and companies that did business with HANO. In addition, the Philadelphia Housing Authority has filed a lawsuit claiming Jackson took retaliatory action after the agency scrapped a deal involving his friend, former music producer-turned-developer Kenny Gamble. A 2007 probe by HUD's Inspector General found that Jackson urged his staff to favor the president's friends when awarding contracts.

But corruption and cronyism were not the only problems at HUD during Jackson's tenure: His agency also oversaw a problematic housing recovery effort on the Gulf Coast after Hurricanes Katrina and Rita that has left many disaster-displaced renters and low-income homeowners struggling to exercise their human right of return and resulted in a doubling of homelessness in New Orleans.

HUD's policies helped fulfill the prophecy Jackson made shortly after Katrina that New Orleans was "not going to be as black as it was for a long time, if ever again." Since the storm, New Orleans' black population has fallen by 57 percent, compared to 36 percent for its white population. As a result, a city that was 67 percent black before the disaster is now estimated to be only 58 percent black.

(HUD photo of Secretary Jackson and Mississippi Gov. Haley Barbour in Gulfport, Miss. announcing a plan to help low-income homeowners affected by Hurricane Katrina)

Labels: Alphonso Jackson, conflict of interest, cronyism, Department of Housing and Urban Development, Gulf Coast Reconstruction Watch, HUD, Hurricane Katrina, new orleans