Abt requested $5.3 million, and mid-level staff at HUD recommended that Abt should receive that amount and be the only awardee. Then there was a long delay in issuing the award, which closely involved Jackson, according to testimony given to the IG.
Chief of Staff Pierce told the IG that Jackson was responsible for the delay because he did not like Abt’s performance on an earlier contract, and also because he did not like the firm’s association with or support for the Democratic Party.
Jackson testified that politics was not a factor but confirmed that he did not like Abt’s performance on a prior contract. However, although the allegation of a political motive for his opposition was supported by other witnesses, his complaint about Abt’s earlier performance was not supported by an IG witness.
According to Pierce, Assistant Secretary Patenaude stated that Jackson had told her that there should be no contract for Abt.
Pierce told the IG that Patenaude recounted Jackson saying in a senior staff meeting that “Abt was a big contributor to the Democratic Party, and that he wanted the assistant secretaries to take a real close look at contracts that were awarded, because he didn’t want us to award contracts to vendors who would be big supporters of the Democratic Party, and raise money to help—that would hurt the President, or something to that effect.”
According to Pierce, Patenaude then reviewed the matter to see if there was a way to prevent Abt from getting the award but failed to find one, so Pierce and Patenaude went back to Jackson, who again said he did not want Abt to get the contract.
At that point, it appears that another staffer brought the matter to the attention of Deputy Secretary Bernardi, and that he pointed out that the Abt funding was not a contract but a grant. After what Pierce estimates was two months of “back and forth” on the matter, she and Bernardi convinced Jackson to allow the award to proceed.
However, when the award was finally approved, it was only $4 million, and two other bidders received some funding as well. The IG’s investigators found that an unidentified HUD executive directed lower-level employees to cut Abt’s funding and give some money to the next two most highly ranked applicants.
The delay and the reduction in the funding had nothing to do with political influence, Patenaude told the IG.
Despite Pierce’s testimony, Patenaude flatly denied that she had heard Jackson talk about Abt’s politics.
The IG stated that Patenaude was “advised that sworn testimony had been given that she had related remarks by Jackson to other HUD officials about Abt, having to do with Abt’s political affiliation.” In response, the IG report shows, she stated: “Absolutely not. I never repeated something that never happened. Did I have a conversation—I raised this to the secretary’s attention. It was known that there were concerns about this contract. It had nothing to do with their political affiliation. I never repeated that. The secretary never said it, and that is my sworn testimony.”
The IG report says Patenaude was again advised that there was sworn testimony that Jackson had partly opposed the Abt award out of political consideration, and that Patenaude knew it. Patenaude stated: “Well, then you have got sworn testimony of people lying.”
The IG did not attempt to reconcile the conflicting statements of Pierce and Patenaude.
To justify his direction not to give the contract to Abt, Jackson told the IG that the firm had performed poorly on a contract to review Fannie Mae’s automated underwriting system, that the report they issued was not good and could not be used. He said that another HUD official in charge of the previous contract had raised the concerns.
The IG interviewed that official and he did not support Jackson’s account. He testified that the issue of releasing the Abt report was not related to the quality of the report but to the question of releasing proprietary information, and added that there was no action taken to prevent the report from being released. The official denied that he had brought up any concerns about the contract with Jackson, saying it was Jackson who raised concerns with him.