Alphonso Jackson, Secretary of the U.S. Department of Housing and Urban Development (HUD), holds a stake valued at as much as $500,000 in a company that has been a sponsor of several major public housing redevelopment projects funded by HUD, Affordable Housing Finance has learned.

That secretary’s ties to Atlanta-based Columbia Residential, LLC, appear to create a conflict of interest, said two directors of public housing agencies contacted by AHF.

Although Jackson said he would recuse himself from decisions involving the company, he still supervises and can fire other staffers who actually make HOPE VI grant decisions, noted the directors, who did not want to be identified due to fear of retaliation by HUD. Therefore, his recusal from personal involvement in decisions affecting Columbia Residential provides no assurance that his ownership does not affect decision-making, the directors said.

Nothing has been found to indicate that Jackson actively intervened on Columbia’s behalf with HUD staff who make HOPE VI funding decisions. However, even as the pot of HOPE VI grants is shrinking drastically under the Bush administration, Columbia has been one of the few private developers to do well with HUD-financed public housing redevelopment.

Columbia has been a key player in one major Atlanta public housing redevelopment that was funded after Jackson took office. The firm is the private partner in four projects that are part of McDaniel Glenn, a 44-acre New Urbanist project near the Georgia Capitol building financed with HOPE VI funds.

Columbia is also a part of team that recently won a $127 million competitive contract to redevelop a public housing project in New Orleans that was damaged by Hurricane Katrina.

Jackson owns a stake valued at $250,000 to $500,000 in Columbia, according to his Public Financial Disclosure Reports for 2005 and 2006, which were filed with the U.S. Office of Government Ethics (OGE).

Jackson’s official government disclosure also states that, “pursuant to a partnership separation agreement (Jackson) will receive periodic payments over the next two years for past services (prior to government service) with Columbia Residential, LLC.”

Shortly after taking office as HUD deputy secretary, Jackson signed a letter saying he would “recuse” himself from decisions affecting Columbia. However, decisions about awarding grants and subsidy contracts normally would not reach Jackson’s level.

In addition, Jackson appeared with Columbia President Noel Khalil at the opening of the West Highlands project in Atlanta in June 2004. The OGE did not require that Jackson liquidate his holding in Columbia before he took office over an agency with which Columbia does business. OGE Director Robert Cusick would not respond to a request for comment on why divestiture was not required.

AHF made repeated attempts to contact Columbia Residential but received no response.

In response to AHF’s reporting on this subject, HUD’s public relations staff made the following statement:  

“Secretary Jackson was a partner/consultant for Columbia Residential LLC prior to beginning his current Federal service. He was a consultant on two projects. One was in Dallas and the other was in Houston. Jackson followed all legal and ethical obligations on May 1, 2001 when he recused himself from participating personally and substantially in any particular matter that would have a direct and predictable effect on the ability or willingness of Columbia Residential to satisfy its obligations to compensate him for prior service rendered. HUD’s ethics attorneys review Secretary Jackson’s financial disclosure forms on an annual basis and are aware of the partial payment he has received from Columbia Residential. The partial payment received by Secretary Jackson in 2003, and reflected on his financial statement, was for services rendered prior to his employment at HUD. Secretary Jackson’s recusal remains in effect.”