NEWS HEADLINES

HUD Secretary Jackson Resigns

WASHINGTON (March 31, 2008) - Alphonso Jackson resigned as the nation's top housing official today amid ethics investigations and calls for him to step down as secretary of the Department of Housing and Urban Development (HUD).

Jackson’s resignation is effective April 18. He said it was time for him to attend to personal and family matters.

Sources in Washington said the timing of his resignation may indicate that the U.S. Department of Justice is nearing completion of an investigation into HUD contracting and the truthfulness of Jackson's testimony regarding those contracts.

Sen. Chris Dodd (D-Conn.) and Sen. Patty Murray (D-Wash.) called for Jackson to step down a little more than a week ago, saying that he is not fit to run HUD. The move followed hearings in which Jackson did not adequately respond to Congressional inquiries, the senators said.

Federal authorities are investigating whether Jackson, who has been secretary since 2004, steered lucrative housing contracts to friends. AFFORDABLE HOUSING FINANCE has reported extensively about HUD contracting, and its investigative report Is HUD Contracting Out of Control? was recently honored by American Business Media with a Neal Award, the nation’s most prestigious honor for business-to-business journalism. The report ran in the June and July 2007 issues.

Jackson is also being questioned about his role in trying to punish the Philadelphia Housing Authority for refusing to sell a piece of land to an individual designated by HUD who is reportedly a friend of Jackson's.

"Ten days ago, I called on Secretary Jackson to resign because it was clear that the ethical allegations against him meant that the Bush administration's ineffective housing policies were being burdened by an even more ineffective HUD secretary," Murray said in a written statement. "Today, Secretary Jackson has decided to move on, but the immense challenges ahead of us to calm the housing crisis remain."

Murray called on President Bush to nominate a new HUD secretary that has "the experience and credibility to attack this [housing] crisis rather than hide from it."

"Hopefully, with new leadership at HUD, we can negotiate a bipartisan plan with the Bush administration to spare the maximum number of families the devastating consequences of losing their home," she said.

Murray added that she hoped that the resignation was "more than a move to simply save face."

"I hope this signals an end to the neglect of needy tenants and struggling homeowners and the beginning of an administration policy that responds meaningfully to the needs of both," she said

President Bush said he accepted Jackson’s resignation with regret. "While leading the Department of Housing and Urban Development, Alphonso made significant progress in transforming public housing, revitalizing and modernizing the Federal Housing Administration, increasing affordable housing, rebuilding the Gulf Coast, decreasing homelessness, and increasing minority homeownership," Bush said.

He did not name any possible successors. Early speculation within HUD is that a new secretary will come from an internal promotion, possibly either Deputy Secretary Roy Bernardi or Assistant Secretary for Housing Brian Montgomery. HUD staff told AFFORDABLE HOUSING FINANCE that Bernardi is widely considered to be a capable administrator who has high standards of integrity. Bernardi, who came to HUD in 2004, was previously the mayor of Syracuse, N.Y.

Montgomery has the advantage of being a Texan who worked in the White House before coming to HUD in 2005, and was personally acquainted with President Bush. But he has the disadvantage of being at the helm of the Office of Housing, where several of his subordinates are alleged to have engaged in questionable activities regarding contracting and handling of expense accounts.