HUD Secretary Seems to Have Developed Urban Ethics Problems

Not all municipal ethics problems arise from a municipality. One place where there is a great deal of opportunity for municipal misconduct is the Department of Housing and Urban Development in Washington, D.C. (HUD)

HUD oversees and funds housing authorities across the country. It gets involved, directly and indirectly, in land and development deals and contracts.

As with so many other agencies, the people who run HUD come from the same world as the people they oversee and fund. For example, the outgoing (under a cloud) HUD Secretary, Alphonso Jackson, headed the Housing Authorities in Dallas, St. Louis, and the District of Columbia. He has friends (and enemies) in housing authorities across the country, not to mention many developers.

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Jackson is the subject of four investigations at the present time. He is accused of having awarded a $127 million contract for redevelopment work in New Orleans to a group that includes a firm that owes him more than $250,000 (in addition, Jackson’s wife reportedly has ties to two companies doing business with the New Orleans authority). He is accused of giving a friend with no housing experience a contract to run the Virgin Islands Housing Authority. And he is accused of having lied to Congress by saying that he did not “touch” contracts.

But apparently, the accusation that led him to finally resign involved retaliation against the Philadelphia Housing Authority, allegedly because its director refused to give a land deal to one of Jackson’s friends. The retaliation involved withholding $40 million in funding.

The problem here was less the alleged retaliation, or even the e-mails of HUD assistant secretaries (“Would you like me to make his life less happy? If so, how?” “Take away all his federal dollars.”). Jackson’s problem was that both Pennsylvania Senators, one Democrat, one Republican, weren’t happy with what happened, and then were even less happy when HUD ignored their nonbinding resolution to extend the $40 million funding while HUD and the Philadelphia Housing Authority tried to work out their problems. Let’s talk arrogance.

Clearly, the power of HUD officials can put a great deal of pressure on municipal ethics. When these officials have been in the business for a long time, they may be competent, but they also have lots of friends, enemies, and interests in the field in which they are working. There must be serious, independent oversight over everything they do.

HUD does have an inspector-general office, but it does not seem to be doing its job, probably because it is not sufficiently independent. Oversight cannot come from the municipal level, because officials there have too much to lose by taking on HUD, with respect to both their municipalities and their careers. This is a perfect situation for an anonymous hotline and an independent investigation unit.

For more information, read the following articles and editorials:
Washington Post, Feb. 19
Philadelphia Inquirer, Mar. 26
Philadelphia Inquirer editorial, Mar. 27