Abt received $13.7 million in HUD contracts in 2000, but in 2006, the firm got only about $1.5 million, excluding grants, according to FedSpending.org. The site also shows that between 1998 and March 2007, Abt employees contributed $40,150 to Democratic candidates and organizations. Abt declined to comment on the case.
As part of his investigation, the IG looked at the files for 22 contracts and uncovered serious allegations about several of them.
The IG reviewed a sole-source contract awarded to Drayton, Drayton & Lamar (DDL), which received 81 Sec. 8(a) contracts or modifications from Sept. 30, 2001, through May 31, 2006. The total amount obligated was $16.66 million.
An unidentified witness told the IG that “DDL continues to get contracts despite its poor performance on several contracts. (Redacted) stated that she believes DDL had/has a relationship with (redacted) (formerly within the Office of Departmental Operations now working as the (redacted)). Now DDL is starting to get a bunch of contracts over in housing too.”
The witness told the IG she had been involved in several DDL contracts. However, the IG report adds, “After DDL began complaining specifically about her services, she was removed from all DDL contracts. (Redacted) left for vacation one week and when she came back, she had been taken off the DDL contracts. (Redacted) further stated that they [DDL] even threatened a lawsuit against her. (Redacted) further stated that (redacted), the president of DDL, called her late one night and told her that he knew Secretary Jackson and that it was in the works to have her gone from here [HUD].”
The IG quotes the witness as saying that DDL was “not delivering what they needed to on a contract, but they wanted to get paid. She wouldn’t sign off on the invoices because we [HUD] had not gotten what it was being invoiced for. She stated that she was not going to lie, cheat, or steal for them when they tried to get money for work they didn’t do. (Redacted) claimed that is what happens here; if you say ‘no’ to something that someone higher than you wants, you will be reassigned. (Redacted) said that the contracting officer signed off on the invoices she would not approve.”
Another allegation of Jackson’s direct involvement in contracting decisions involved National Housing Group (NHG), which is based in Miami. The firm began obtaining HUD contracts under Martinez, landing $30.5 million in contracts in fiscal 2003, none of them through full and open competitive bidding. The firm has been widely criticized in the press for its management of HUD-owned properties in New York City, prompting the Village Voice to name HUD the No. 1 Worst Landlord in the city in July 2006. NHG’s contract for managing foreclosed Sec. 203(k) properties there was not renewed. Yet NHG still got $2.3 million in HUD contracts in fiscal 2006, none of them through competitive bidding.
The IG asked about one of the firm’s contracts for multifamily property management and reported this testimony from an unidentified witness involved in the contract:
“NHG won the initial competition to become the multifamily property manager; they were awarded the contract on the last day of the existing contract. The incumbent filed a protest with the General Accountability Office. The protest triggers an automatic stay. The Office of Housing [OH] was going to honor the stay. Jackson was Deputy Secretary at the time. I was at the meeting with Jackson where he directed the OH to override the stay; OH and the Office of the Chief Procurement Officer, did an administrative override. Clearly, NHG had access, certainly to (redacted), and from what I heard, to Jackson and (redacted), Jackson’s (redacted).”
The IG also reviewed a firm fixed-price, sole-source contract valued at $699,000 awarded to Healthy Resources Enterprise, Inc. (HRE). The contract was requested by the Office of Housing for Lender Assistance Subsystem audit reviews. HRE received eight Sec. 8(a) contracts or modifications from April 11, 2005, through March 21, 2006. The obligated amounts total $5.98 million.
The IG interviewed the contracting officer and a contract specialist familiar with the contract.
One of those HUD staffers told the IG that “he did not want to exercise the first option year on the HRE contract because it wasn’t in HUD’s best interest.”
According to the IG report, a more senior HUD staffer told the individual that “he had his marching orders and HRE’s contract would be renewed. (Redacted) was not sure if the motive was political or if it was due to friendships, but he felt that it was undue influence. (Redacted) said he was told that (redacted) and the 10th floor pushed this contract.” HUD’s top brass work out of offices on the department’s 10th floor.
One of the witnesses said “the secretary called (redacted) after the secretary received a call from HRE about the contract cancellation. (Redacted) asked (redacted) why HUD was going straight to RGV (HRE’s subcontractor on the project).” The HRE contract was renewed for the audit evaluation task.