“(Redacted) further stated that HRE subcontracted the work, and HRE did not perform any work,” the IG report said. “When subcontracting, the prime contractor, HRE, is still required to perform 51 percent of the work. In (redacted)’s opinion, HRE was not engaged in this contract and got paid by HUD for doing nothing.”
The IG quoted this witness as saying, “Contractors needed to get in with the right people” and that Jackson’s comments in Dallas last April might be an accurate reflection of what happens “behind the scenes” in HUD contracting.
The IG investigation did not follow up on any of the charges made by the unidentified witnesses about DDL, HRE, or NHG.
The IG report reflects no attempt to resolve conflicting statements in regard to the Abt case or to investigate whether it was Patenaude or Pierce who misrepresented, under oath, what had been said about Jackson’s statements and motives in the case.
HUD officials would not talk about contracting, did not respond to numerous requests for detailed information on HUD contracts, would not provide direct answers to any questions posed by AHF for this article, and would not make Jackson or any senior executive available for an interview.
A department spokesman said only that HUD has taken no action in response to the IG’s report. “We consider the matter closed since the IG recommended no further action,” said HUD spokesman Jereon Brown. “The report reflects that no HUD contract has been cancelled, rescinded, terminated, awarded, or not awarded due to the personal or political beliefs of any recipient.”
The Public Integrity Section in the Justice Department has opened an investigation into the influence of politics at the General Services Administration, but it’s not known whether HUD may also be on its investigative agenda.
AHF’s investigation also exposed old allegations that contracting has been subject to political manipulation under Democratic HUD secretaries as well as this and prior Republican leaders.
In the end, however, the department’s clients and staff tell AHF they don’t really care which party is more or less guilty of political manipulation of the contracting process. They only know that the agency’s dependence on a badly flawed contracting system prone to abuse is hurting its effectiveness in many ways.
They express great frustration about the apparent disconnect between what needs to be done at the field level and what goes on at HUD headquarters. They worry that as more experienced HUD staff retire, HUD will be forced to rely even more heavily on contractors and that contractors and staff alike will not be sufficiently experienced or trained or supervised.
The latest revelations about Jackson’s leadership also contribute to a widespread sense that the agency is hopeless, like a 40-year-old man who can’t hold a job and lives in his mother’s basement. The state of Texas has a system for reviewing the usefulness of state agencies every 10 years, and it has abolished several of them that the legislature deemed too badly managed to be saved. In other cases, as that of the Texas Department of Housing and Community Affairs, the threat of termination was enough to achieve reform.
Unfortunately, with HUD, no such mechanism exists. Congress has rarely shown any sustained interested in the agency. When it has, as it did in 1989 after the last major scandal there, it passed the hastily written HUD Reform Act that got key members publicity as reformers but accomplished as much harm as good.
How can HUD be saved, or at least restored to a reasonable level of functionality and integrity?
Many housing advocates are hoping to see the next president choose a secretary with solid management and housing credentials, one who is chosen to fulfill HUD’s mission rather than fill a political role. But without proactive and well-considered help from Congress, even a new secretary will have a very steep uphill battle.
In future issues, AHF will try to put together a broad sampling of opinion on what can be done to get the agency back on track.