Elias Castellanos indicted, questions about HANO-backed nonprofits abound

Don't know if you caught this but Mr. Castellanos, a former CFO of the Housing Authority of New Orleans while it was under HUD's federal receivership, was charged with embezzling nearly a million bucks.

HANO was notoriously corrupt for about three decades before it was finally taken over by HUD under President Bush. Unfortunately, it has emerged from that receivership as bad or worse than before because of the corrupt leadership Alphonso Jackson, who was GW Bush's HUD chief.


Jackson resigned in disgrace toward the end of the Bush administration after Philly's top housing guy blew the whistle on Jackson's move to withhold federal money from Philly public housing residents in a transparent attempt to extract payments for a derelict contractor and Bush supporter. Carl Greene of PHA knew how to save emails.

There have been widespread allegations of corruption in Jackson's office and some of them involve his stewardship of HANO.

I've worked on this a lot. Check out my archives for Alphonso Jackson for more.

Anyway, the little T-P blurb gives absolutely zero context on Mr. Castellanos, who worked at HANO under Jackson.

But the minutes of March 19th meeting of the Legislative Audit Advisory Council in Baton Rouge provides some details.

LAAC03172009

Crescent Affordable Housing Corporation and Lune d'Or Enterprises. LLC

Elias Castellanos with Crescent Affordable Housing Corporation, a nonprofit of the Housing Authority of New Orleans, and Jamora Erwin with the Housing Authority of New Orleans and Crescent Affordable Housing came forward to state their case. Mr. Castellanos said that like most of the entities that they oversee, HANO has been in a continuation of rebuilding from Hurricane Katrina. Crescent Affordable is a managing member of some of their operations that were going through the mixed planned development. As those audits were held back and must be completed so that the audit of Crescent Affordable could be finished. They are in the process of completing those audits. Crescent Affordable audit for 2006 should be delivered to them today, and upon their review and approval it would be released to the Legislative Auditor. They will have all related audits completed within the next month and ready upon approval and release from the auditors, will then be released to the Legislative Auditor. He further stated that Lune d'Or Enterprises, LLC is a member of Crescent Affordable Housing Corporation.

Mr. Purpera said that the report pending is the 12/31/2007 reports. Mr. Castellanos said that their auditors have indicated that Lune d'Or will be released on April 30th • Crescent Affordable audit will be released to them today for review. Senator Murray asked if Crescent Affordable Housing is an affiliate of HANO in New Orleans. Mr. Castellanos said that it is a nonprofit organization created by HANO to help support the redevelopment effort. The mixed plans developments they are entering into require separate partnership entities to initiate the financial transaction and because HANO is an agency funded through HUD, and they have certain restrictions on obligating our resources, they have to create the nonprofit in order to facilitate these mixed line developments.

Senator Murray asked if each one of the nonprofits is responsible for a separate development in New Orleans, or if all combined together. Mr. Castellanos said Crescent Affordable is generally the parent and then the nonprofits and related LLC's are under Crescent. Senator Murray asked if Crescent Affordable Housing was standing in the shoes of HANO overseeing all. Mr. Castellanos said it is the nonprofit parent entity for all mixed plan developments that they enter into. He explained that Lune d'Or Enterprices, LLC was the managing member for the Fisher 1, Fisher 3 and Gus 1 properties. Also Crescent Affordable is the sole owner of Lune d'Or, and throughout the audit it is still Crescent Affordable

Senator Murray asked if all are private nonprofits. Mr. Castellanos responded that the sole owner of Crescent Affordable is the Housing Authority of New Orleans, but it does not stand in the shoes of HANO. Senator Murray asked if HANO owned Crescent Affordable Housing and Mr. Castellanos said yes. Senator Nevers moved to grant the extension and with no objections, the motion was granted.

Senator Murray asked Mr. Castellanos to provide to himself the names of the board members of the respective nonprofits for Crescent Affordable Housing and Lune d'Or and any other ones that are in the City of New Orleans that are operating under these housing redevelopments. Mr. Castellanos said he can provide the information through the Legislative Auditors. Senator Murray said they can provide it directly to his office on Broad Street in New Orleans.

For more on Lune D'or and Crescent Affordable Housing, I found this HANO RFP (pdf) from 2007 that includes some helpful background information.

Crescent Affordable Housing Corporation (CAHC), a non-profit corporation, was created in December 2003 by HANO to facilitate the development of affordable housing. CAHC is the sole member of Lune d'Or Enterprises LLC, a for profit entity created by HANO that serves as the managing member of several for-profit Limited Liability Corporations (LLC's) that own and operate affordable housing projects developed on HANO properties. Through Lune d'Or, CAHC serves as the managing member of each of the LLC's, including those named in this Request for Proposals (RFP). Each LLC owns a phase of development at the given site. Those sites are part of the new comprehensive redevelopment strategy HANO has developed to accelerate the revitalization of low income and affordable housing. HANO and eighteen (18) affiliates of HANO have received or expect to receive tax credit allocations for Low Income Housing Tax Credits (LIHTC) to assist in its redevelopment efforts and are seeking a qualified, full service certified public accounting firm with expertise in affordable housing and tax credits to conduct full spectrum audits, cost certifications, tax credit carryover, 10% tests, financial statement audits, tax valuation, and provide litigation support, trust and general consulting services.

The services contemplated herein are also required for any future affiliates created by HANO in 2007.

The current Housing Authority of New Orleans affiliates include the following:

Crescent Affordable Housing, LLC

Lune D'Or Enterprises, LLC

Place D'Genesis, LLC

Fischer I, LLC

Fischer III, LLC

Guste I, LLC

Florida IIA, LLC

Mazant Royal, LLC

General Ogden, LLC

Imperial I, LLC

Imperial II, LLC

Guste ll-B, LLC

Fischer IV-3, LLC

Tchoupitoulas, LLC

CJ Peete I, LLC

St. Bernard I, LLC

CJ Peete III, LLC

BW Cooper I, LLC

HANO is currently designated by HUD as a Troubled Agency. Further, H ANO has been placed under an administrative receivership, whereby an Administrative Receiver has been charged with the responsibility of quickly transforming the agency's overall operations and performance into one reflective of a standard or high performing public housing authority. To that end, HANO's success will, in part, be contingent upon verification of its compliance with laws and regulations applicable to all federal assistance programs.

That's all for now. This is not the first time in recent memory that a quasi-governmental nonprofit in the housing field has allowed massive graft and corruption to go under the radar. I hope that major audits of all affiliated non-profits are underway.

Would appreciate any tips in the comments section. I won't be able to google through all of these by myself. There are lots of other pdf docs online that will at least provide better context on this.

I'm curious how Mr. Castellanos came to be employed at HANO and wonder if he had a personal relationship with Mr. Jackson directly or through the contractors that were awarded funds to redevelop the Big 4.

Sand Trap

Or should I say money pit?

As transparently insulting it is for the Louisiana Legislature to burn another $9.2 million propping up an effing golf course, the thing that makes me really ticked off is that New Orleans is proceeding full steam ahead with the construction of TWO taxpayer subsidized golf courses in City Park.

The idea behind these courses is that they'll add revenue once they lure the Zurich Classic away from TPC in Avondale.

Ummm not so much.

Seriously, is it just me or has literally every single public investment post-Katrina been an absolute joke?

I have written extensively in the past about the flawed ideology and corrupt individuals behind the redevelopment of the St. Bernard project.

Alphonso Jackson's HUD not good for HANO

Katy Reckdahl has a decent summary of the latest scathing audit from the HUD Inspector General on the utility of the federal receivership of HANO.

I have a copy of the original report, which I can email to you if you contact me. I'm having the hardest time uploading pdfs this week...

Here are the passages that I thought really got to the heart of the matter:

HUD did not properly plan the receivership because it did not perform an initial
assessment of the Authority's condition or continuous assessments after the receiver
took over. In phase 1 of the recovery process, the receiver should have assessed the
Authority's condition, which would have established an inventory of the Authority's
problems. Although there was a February 2002 decision to terminate the
cooperative endeavor agreement and/or execution of the August 2002 memorandum
of agreement, HUD did not provide initial assessments of the Authority's operations
before or after the agreements were executed.

The initial assessment would have provided the details needed to identify problems
with the Authority's operations. The assessment would have been an inventory of
problems that would have provided the receiver with a road map of the management
areas in need of improvement and would have provided the foundation for
documenting improvements through periodic reports.

--

The lack of assessments and reports continued after Hurricane Katrina. If HUD's
receiver had performed an initial assessment in phase 1, that assessment would have
had to have been significantly revised due to the Hurricane Katrina disaster on
August 29, 2005. However, neither HUD headquarters nor the receiver could
provide evidence to show that it reassessed or performed continuous assessment of
the Authority's condition after Hurricane Katrina.

--

The current receiver explained that before Hurricane Katrina, the Authority was
mostly involved in redevelopment, while after the hurricane, it was mostly
involved in recovery efforts such as asset recovery and rehousing displaced
Hurricane Katrina victims. The prior receiver confirmed that his priorities
included providing housing to displaced public housing tenants who wanted to
return after the hurricane and redevelopment. However, neither receiver could
provide documents to support these assertions.

--

During most of the receivership, there was no documented recovery plan which
covered all aspects of the Authority's condition. The current strategic
improvement plan was not implemented until after we began our audit in April
2008.

HUD did not properly monitor or control the receivership at the Authority.
During much of the time that the receivership was in existence, it was apparent
that HUD had not established a clear operating structure and reporting chain of
command. This condition is evidenced by the lack of documents to support the
receivership's actions and results in improving operations at the Authority.

According to interviews with HUD staff, until April 2008, the former Secretary of
HUD and some of his executive staff were intermittently involved with the
receivership. However, due to a lack of documentation, we could not evaluate the
extent of their involvement in the recovery of the Authority or how their
involvement was coordinated with the Assistant Secretary's oversight and the
receivers.

--

Aren't you glad we rushed into a poorly conceived public housing redevelopment program that was so clearly a vessel for handing out favors to cronies of incompetent HUD chief Alphonso Jackson?

It doesn't surprise me that there was "a lack of documentation" and "no documented recovery plan." You don't exactly want "a clear operating structure and reporting chain of command" when you intend to hand out contracts to personal friends and political allies.

I would love to see Attorney General Holder open up an inquiry into Mr. Jackson's tenure at HUD. I know the FBI was investigating him at the time of his resignation. I wonder if charges might still be in the offing.

There was a sad lack of reporting on Mr. Jackson's hidden agenda, especially as it relates to New Orleans post-Katrina. Ezra Pound of the National Review may have been the only professional investigative journalist to really delve into Jackson's dealings in here. It was his attempts to extort the city of Philadelphia that ultimately lead to his resignation, but I don't think the media ever truly examined out the extent to which Jackson made HUD into his own personal political fiefdom. Whereas Talking Points Memo devoted months and months to uncovering the politicization of the Department of Justice, there was no such organizational push to look into Housing and Urban Development. I wonder if we would have found a similar scope of departmental corruption.

--

Mary Landrieu is right to call for the resignation or replacement of all of the top HANO officials that are holdover appointees of Mr. Jackson.

It's such a shame that this was so poorly administered.

Federal receivership can and should be an effective means of cleaning up chronically ineffective or corrupted municipal departments. I'd like to see a lot more federal involvement in the administration of certain municipal departments here in New Orleans, especially now that we have President that presumably won't be appointing stooges like Alphie J.

Get Him Outta Here Already!

Speaking of disaster capitalism, I happened upon HANO's website last night. Guess who's face is still plastered all over the place?

Hint: The most consequential thing he ever built was bridge between the Bush and Nagin administrations.

He was mostly in the business of demolition and displacement and was defended by Nagin even after he resigned in disgrace for a record of politicized contracting practices, corruption, and extortion.



C'mon HANO. Take this monster off of your website. He resigned a year ago. We've had two new HUD secretaries since then.

The Columbia Citi Residencies at Bayou District...

Katy Reckdahl is one of my favorite reporters in town, she wrote as balanced a ground-breaking piece as you'll find anywhere. Normally, a writeup of an event like the first day of construction at the new St. Bernard redevelopment, is pure fluff. Reckdahl's mixes the enthusiasm of elected officials with the regret and skepticism of some residents.

Here's a taste:

Former residents alternately spoke lovingly of the bricks that had sheltered them and decried a woeful lack of maintenance in the past by the Housing Authority of New Orleans, of mildew, inoperable plumbing and hunks of peeling paint that left many children with heightened lead levels in their bloodstreams.

Longtime St. Bernard resident leader Naomi Minor sent many letters about the buildings' poor conditions before Hurricane Katrina hit, and she supported the idea of a rebuilt complex that would be a safer place to live, she said.

Kowana Lyons, 34, who had lived her entire life at the St. Bernard complex, agreed that the decades-old buildings had deteriorated. But she was too fond of what she called "our bricks" -- the solid concrete and brick structures -- to embrace the new development's side-by-side townhome designs, which struck her as flimsy by comparison.

One of the real failures of the public housing demolition debate was the inability to connect the deteriorated conditions of the Big Four to the decades of incompetence and intentional neglect by HANO. It's interesting to juxtapose residents' complaints about official inattentiveness to the old solid brick structures with the new construction of flimsy suburban style townhomes. It's not exactly much of a stretch to imagine yet another iteration of the same construct - neglect - demolish - construct spin cycle.

But Reckdahl does leave out some important context. In a separate Monday piece, she goes into some detail about residential enthusiasm for the redevelopment of Lafitte, which is preserving more historic structures and providing real one-for-one replacement of units. It was kind of ironic that the complex I most wished to keep also happens to have the most just and comprehensive redevelopment plan. (Of course Mary Landrieu and the entire Louisiana Congressional delegation tried to mandate one-for-one unit replacement in the Gulf Coast Housing Recovery Act but this effort failed. The only opposition to that bill from local officials came from David Vitter and Stacy Head.)

That article did go into the stats, in terms of how many of each type of unit would be built at each of the redevelopment sites. But today's piece, which focused solely on St. Bernard didn't go into the details in terms of what's expected at the end of construction. If there's one redevelopment project that demands extra scrutiny and context, it's St. Bernard, er excuse me, The Columbia Citi Residences at Bayou District. If Reckdahl had gone into more detail, she would have been more or less obligated to mention the real controversy hanging over Columbia Residential and the Bayou District Foundation.

The reasons to be skeptical of Columbia Residential's redevelopment plans were enumerated by the Times-Picayune sometime in 2007 but were subsequently ignored throughout the rest of the public housing debate. Anybody remember a man by the name of Alphonso Jackson?

No article about the redevelopment of St. Bernard should exclude at least a couple of contextualizing sentences about the controversy dogging how the contract was awarded to Columbia Residential and about the larger plans of the Bayou District Foundation to link the whole project to the redevelopment of golf courses in City Park.

Right of Return Lip Service Trumped By Bureaucratic Practice

Just in case you missed it, Katy Reckdahl wrote an essential piece for yesterday's paper. It is absolutely critical reading for anyone that has been following housing and the plight of displaced New Orleanians who, by the way, still number in the hundreds of thousands.

Through the experiences of two displaced New Orleanians, the article details the inability or refusal of HUD to close bureaucratic loopholes that allow local housing authorities to refuse to pay to transfer residents back to New Orleans due to higher rent.

This has caused a standoff between HANO and housing authorities in other cities, particularly in Texas, which took in many Katrina evacuees. The Housing Authority of New Orleans can't afford to pay for any incoming vouchers, said HUD spokeswoman Donna White. So many out-of-town housing agencies -- facing the prospect of paying rent for all transferring vouchers -- have invoked the "higher rent" exception to refuse New Orleans transfers, including Martin's and Egana's.

(Never mind the fact that HANO is under the direct control of HUD)

Let's take this opportunity to remind ourselves of HUD's record in New Orleans and around the country over the last 7 and a half years.

While there is both corruption and incompetence, let us not overlook the troubling ideological ends reached as a consequence of bureacratic inaction.

The Swing of Social Networks

From the Washington Post:

[A] growing body of evidence is suggesting that traditional social networks play a surprisingly powerful and underrecognized role in influencing how people behave.

--

Taken together, these studies and others are fueling a growing recognition that many behaviors are swayed by social networks in ways that have not been fully understood. And it may be possible, the researchers say, to harness the power of these networks for many purposes, such as encouraging safe sex, getting more people to exercise or even fighting crime.

This sounds awfully familiar to me . . . these . . . how do you say. . . social networks.

We know a thing or two about social networks in New Orleans.

Certain people know a thing or two about "harnessing their power," come to think of it.

The difference is that the social networks don't seem to have been harnessed to encourage safe 'doing it,' exercise, or crime-fighting.


I've noticed a certain social network harnessing it's power to work collectively on their own 18 hole handicap.

To be less obtuse, I've noticed a certain social network harnessing it's power to exploit social networks of ordinary working neighbors to benefit social networks of ultra-wealthy exclusive community "neighbors."

Or even more bluntly, I've noticed wealthy socially elite African Americans taking advantage of poor African Americans to benefit rich socially elite racist white people.

-

This blogosphere is a social network. What should we harness our power for?

Group pilates session? Anyone?

Par 5, Split Fairway

This is the fifth part of my series called Demolishing and Redeveloping Alphonso Jackson.

I wanted to leave that out of the title because this post extends Jackson's reign at the Federal Department of Housing and Urban Development very concretely to the city of New Orleans. It's not just about him because of its consequences for us.

In part 1, I describe how Alphonso Jackson not-so-subtly explained to minority vendors that contracts from HUD would be awarded partially based on the political affiliations of the bidders.

Part 2 briefly describes how the city of New Orleans lost independent dominion over the Housing Authority of New Orleans, how HANO came to be under the direct control of HUD.

The scandal that most directly brought about the resignation of Alphonso Jackson resulted from his actions against the Philadelphia Housing Authority. In part 3, I detail the spat between minority developer and Republican contributer Kenneth Gamble and PHA's Executive Director Carl Greene. Gamble, after failing to meet the terms of his non profit's contract with the PHA, called in Alphonso Jackson to intervene. When Jackson and his people at HUD began to retaliate against Philadelphia by attempting to withhold federal funding, Carl Greene filed suit. The suit became public and the heat of the subsequent congressional investigations prompted Mr. Jackson to resign.

In part 4, I interviewed PHA Executive Director Carl Greene in detail about his experience with Alphonso Jackson and HUD. He had some impressive insights into the public housing demolition controversy from late last year and spoke to the problems that arise as a result of ceded municipal authority.

Why have I been slowly releasing research on Alphonso Jackson and HUD? What does it all mean? How does the scandal in Philadelphia tell us about New Orleans?

I hope to connect the dots for you today. I will draw a lot on the previous four posts of the series to help illustrate the big picture. I encourage you to read those if you can but I hope that this is clear enough to stand on its own.

I can tell you now that this is going to be really long, but I promise it'll be worth it. Take your computer into the bathroom with you.

--

Most rewarding thus far, was my interview with Carl Greene. I had hoped that discussing his legal authority to file suit against HUD on behalf of the residents of Philadelphia's public housing would help illuminate the problematic alliance between HUD and HANO in the housing decisions that have occurred here.

Mr. Greene was willing to be so forthright with me about his view of things. His perspective on the operational philosophy of Alphonso Jackson was thought-provoking and was way more frank than I had envisioned when I contacted his office.

There was one thing that really had me thinking for some time after I'd posted the interview.

. . . I think Alphonso Jackson somehow felt as though he was the king of black people and his job was to somehow [benefit] these black contractors at the expense of the law. . . . [I]t's not just African American because I don't think it's just about black. I would say black-hyphen-socially-elite black. There's still a lot of poor black people out there that I'm in the business of serving every day. [Jackson] wasn't doing nothing for them. He went to Congress and said 'oh yeah give them 75%, give them 76% funding, take away all of their money.' But on the other hand, for one guy who can make some records, or some guy that makes contributions, or some guy that hangs out at the right golf club, I mean, the whole socially elite type that he was interested in - he would sacrifice the whole program for the purposes of benefiting the social elite. And that's what it came down to. It came down to the self-ascribed country club social contacts that he had, and he didn't care about the rules when it came to these folks.

--

I think Jackson was left to his own discretion to do whatever he wanted at HUD and he used that discretion - he abused that discretion - to take care of business and personal friends who became part of an elite social and business network. This was done at the expense of the city of New Orleans and its Housing Authority and if the City Council or the Mayor tried to object then he could always threaten to withhold the money or not give the money. [T]hat was his normal M.O. 'If you don't go along with me then you won't get the money.' It's a 40 billion dollar agency and he's doling out money - he used it as a political weapon to force you to go along with his policy. With the compromising of the political infrastructure [in New Orleans], you had a guy [Jackson] that was in charge of the agency who would beat you over the head with the power of his office if you didn't really vote the way he wanted you to vote on the demolition application, so, effective advocacy for the very very poor folks down there, an effective, professional housing advisory to the Mayor and the Council and the housing authority board was not present. [H]e kind of hijacked that for his office and made it an organization that put on a front of taking care of affordable housing and public housing when at the same time, it was always the people that were part of the social and business elite crowd that he was associated with, that were getting the work.

Now, Mr. Greene of course knew firsthand about Jackson's favors for socially connected elite African American business people through HUD's attempts to retaliate against the Philadelphia Housing Authority on behalf of 2000 RNC speaker and Republican donor Kenneth Gamble.

But there was something else there that really stuck out in my mind and it took me awhile to really put a finger on what it was.

I had to think on it.

-

Stroke 1: The philosophy of black capitalism as applied in New Orleans

Black capitalism in general is not bad or dangerous at all. In fact, I like it. Basically, it argues that for African Americans to rise as an oppressed minority, they must accumulate wealth by building their own businesses. Essentially, it's a large-scale "buy local" campaign to keep African American money in the African American community and away from large corporations that contribute to the larger economic system that has cemented aspects of structural racism.

In some instances, however, some African American business leaders have lost their way. They come to exploit the African American communities they purportedly assist by obtaining wealth. I can even see the justification. For example, though Kenneth Gamble was bilking Philadelphia Housing Authority residents, most of whom are poor African Americans, by failing to build the houses his contract with PHA demanded, he could sleep at night because the profits he and his company received from the market rate development he wanted to build would remain in African American hands - his own.

Now let's take a New Orleans example.

In early November, the Times-Picayune wrote about our sanitation contracts with Richard's and Metro disposal. I think everyone remembers that one, it sparked a lot of outrage and a City Council investigation. The gist was that two minority-owned sanitation companies, Richard's Disposal and Metro Disposal, were receiving suspiciously cushy treatment from the city. While Jefferson Parish receives full sanitation service including "unlimited bulky waste" for about $8 from each taxpayer, New Orleans tax payers receive less service for at least $10 more per resident.

Additionally, as you'll recall, the original contracts with Richards and Metro actually did call for the removal of all "unlimited bulky waste," but after the fact, Nagin drafted an amendment that was sponsored in Council by Cynthia Willard-Lewis that eliminated this requirement from the contract.

*To be fair, Councilwoman Willard-Lewis' amendment was approved unanimously by all members of City Council, save for Stacy Head, who was not present. Councilwoman Head has an ideological opposition against funding certain city services for residents and believes that the city should not pay for debris removal at all. This reflects very poorly on the functioning of Council as a whole and on the individual culprits.

Of course, Richard's and Metro are owned and controlled by Alvin Richard and Jimmie Woods, respectively. Since 2006 alone, Richard's and Metro, or their owners or partners, have given thousands of dollars to the campaigns of Ray Nagin and Cynthia Willard-Lewis.

That's not the end of the story, however. As you might remember, when City Council got around to investigating their prior mistake, Richard's and Metro organized a protest of chambers. They alleged that the investigations into their contracts, which were quite clearly taking advantage of the population of New Orleans, amounted to racism against minority-owned firms. They stacked council with their employees and brought in officials from what could once be called a civil rights group, SCLC, which threatened a comically ridiculous boycott of the city.

Never mind that the inflated garbage collection contracts were hurting predominantly African American New Orleans taxpayers, our neighbors most disproportionately hurt by any form of economic exploitation or tax revenue waste. Never mind that a boycott by any group would disproportionately harm African Americans at the bottom rungs of the service industry economy. The warped interpretation of the black capitalism philosophy allowed Cynthia Willard Lewis, Sanitation Director Veronica White, Ray Nagin, Jimmie Woods, Alvin Richard, and Spiver Gordon of the SCLC to sleep well at night because they were working to keep the money in the hands of African Americans: two sets of hands, those of elite African American multimillionaires Alvin Richard and Jimmie Woods.


Stroke 2: Alphonso Jackson and William Hairston in New Orleans

While HUD Secretary Alphonso Jackson's retaliation attempts against the Philadelphia Housing Authority yielded the political pressure that ultimately caused him to step down, Mr. Jackson was also under investigation for his role in steering contracts to his friends here in New Orleans. In October, the National Journal's Edward Pound reported on some nefarious relationships between Mr. Jackson and the firm that ultimately won the contract to redevelop the St. Bernard housing complex. The Times-Picayune also picked up the story. The allegations, at that time and as they developed, were two-tiered.

First, Alphonso Jackson was accused of steering a no-bid contract via HANO to millionaire African American businessman William Hairston to the tune of close to $500,000 for work done as a construction manager over an 18 month period. Later, Edward Pound found that HSD, a Georgia company affiliated with Hairston received an additional $186,000 contract directly from HUD.

So who is William Hairston?

According to Pound, he is:

"a golfing buddy and social friend from Hilton Head Island, S.C."

Hilton Head Island, South Carolina, of course, is an extremely exclusive residence and elite vacation destination, where, according to the New York Times, Alphonso Jackson purchased a home in 2004. Hairston's wife, Starletta Hairston is currently running for the SC House from Hilton Head Island as a Republican.

Remember Mr. Jackson's contracting philosophy, as relayed to a conference of minority real estate executive in Dallas, from Part 1 of Demolishing and Redeveloping Alphonso Jackson:

"I said, 'What do you mean?' He said, 'I don't like President Bush.' I thought to myself, 'Brother, you have a disconnect -- the president is elected, I was selected. You wouldn't be getting the contract unless I was sitting here. If you have a problem with the president, don't tell the secretary.'

"He didn't get the contract," Jackson continued. "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."

Here is a list of political contributions by William and Starletta Hairston over the years. I'm sure that there are more listed under Mr. Hairston's various business ventures.

(Democratic majority whip James Clyburn also plays golf with Jackson and Hairston and also has questions to answer about his role in steering the HANO contract.)

Stroke 3: Alphonso Jackson and Columbia Residential in New Orleans

Columbia Residential is the company contracted for $127 million to redevelop the St. Bernard housing complex. Its President, Noel Khalil is a multimillionaire African American contractor from Atlanta.

According to the Times-Picayune, Columbia Residential via its subsidiary Columbia Highlands LLC had history in New Orleans before the storm:

Last December, a Columbia Highlands employee pleaded guilty to accepting bribes from a HANO contractor he was supposed to be overseeing. According to a summary of the case filed by the government, James Lozano of Atlanta admitted accepting $45,000 from the owner of a construction company helping to build the Fischer Senior Housing Village in Algiers. The money was paid in increments starting in 2002, the records say.

Columbia Highlands initially received a small project management contract from HANO, Moon said. In late 2002, the firm got a much larger contract, essentially putting it in charge of overseeing the redevelopment of all of the complexes undergoing renovation at the time: Desire, Florida, Fischer and Guste. The value of that contract could not be determined Thursday.

Moon said the larger contract was awarded after a competitive-selection process, under which HANO would not have been bound to choose the lowest-priced vendor. She declined to continue the interview after being asked how Columbia Highlands first came to work for the agency.

Remember, HANO was directly controlled by HUD beginning in 2002.

Turns out, Alphonso Jackson and Noel Khalil are close:

At the same time, the secretary still has financial ties to one housing developer. According to Jackson's financial disclosure reports, an Atlanta-based development company, Columbia Residential, owes him $250,000 to $500,000. Before joining HUD, his spokesman said, Jackson was a "partner/consultant" for the developer.

According to his disclosure reports, Jackson is to receive periodic payments "for past services" under a separation agreement with the company. He has received only one such payment in the past six years -- $35,000 in 2003. HUD officials said that Jackson avoids any dealings with Columbia Residential. They released a memo he wrote in August 2001 in which he recused himself from HUD matters having "a direct and predictable effect on the ability or willingness" of the company "to satisfy its obligation to compensate me for prior service rendered."

Columbia Residential's $127 million contract to redevelop the St. Bernard projects was, of course, above-board because Mr. Jackson has agreed recuse himself from the panel that awarded the big four redevelopment contracts?

The four-member selection panel included Scott Keller, who was until recently Jackson's deputy chief of staff and who is often described within HUD as Jackson's "right-hand man." But in an interview, Keller said that because of the press of other HUD business he did not participate in, or influence, the selection of the Columbia Residential team. Keller left HUD in August to become a private consultant.

Nothing to see here, other than a follow-up by Pound that explains how Mr. Keller became a central figure in the investigations into HUD.

As it turns out, however, Keller not only helped choose the panel but also served as a member. The other panel members were another senior HUD official from Washington, a HANO official, and an executive from the Fort Worth, Texas, housing authority. Legal and financial advisers assisted the panel in the selection process.

According to three people with intimate knowledge of the selection process, Keller strongly favored the Columbia Residential team's proposal. Margaret (Peg) Stone, a private financial adviser who is now retired, sat in on the discussions and recalls that Keller promoted Columbia Residential's plan "from the beginning." Stone said: "He certainly liked them a lot.... He advocated strongly for the best solution to the project, which he thought was Columbia Residential."

Khalil, a registered Democrat and donor, certainly knew how to play ball the Alphonso Jackson way in 1999 when he contributed to George W. Bush's first-term campaign.

So to quickly sum up, Noel Khalil of Columbia Residential won a $127 million contract from the taxpayers of New Orleans after formerly employing Alphonso Jackson, who used his chief of staff to pick and serve on the panel that awarded the contract. Columbia Residential continued to make direct payments totaling at least $250,000 while Mr. Jackson served at HUD.

Stroke 4: Columbia Residential, Bayou District Foundation, and St. Bernard

A 501c3 nonprofit, the Bayou District Foundation, came to be the public face of the complicated web of companies and foundations working on the St. Bernard redevelopment:

St. Bernard Redevelopment is the same group of nonprofits and businesses that have struck a partnership that includes the Fore!Kids Foundation and the Baton Rouge Area Foundation, both established charities.

An affiliate of the Baton Rouge Area Foundation, Commercial Properties Development Corp., will manage commercial elements of the redeveloped St. Bernard site. A for-profit Atlanta company, Columbia Residential, will develop the apartment complexes. The Bayou District Foundation, formed earlier this year, acts as the public face of the complex partnership.

The Fore!Kids Foundation? I thought this was about building houses.

Why build affordable housing in a city with an affordable housing crisis when you can risk it and try to reach the green in two?

So the Bayou District Foundation is asking park officials to give up a portion of future revenue in exchange for the foundation's massive front-end investment in three golf courses, two of them of a quality that could lure PGA Tour events to the city. The foundation has proposed taking $500,000 from an expected $1.5 million in yearly golf revenue to finance educational and recreational programs at the St. Bernard complex. The plan's backers say they will assure City Park retains at least $500,000 in golf revenue.
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Despite the obstacles, businessmen pushing the foundation plan have high hopes. Federal housing officials have endorsed the developers' broad vision. And the complicated agenda has advantages created, oddly, by Hurricane Katrina.

While they face criticism and questions from displaced St. Bernard residents, the Bayou District Foundation leaders don't face the wrenching prospect of relocating people. The more than 1,000 families living in the 52-acre complex before Katrina flooded the neighborhood are gone, and St. Bernard is shuttered.

Nope, no annoying residents to ask questions, the storm took care of them. Now that we have the backing of Federal housing official (Alphonso Jackson) that our primary housing partner (Columbia Residential) owes hundreds of thousands of dollars, we can just go ahead and build two PGA-caliber golf courses.

It gets even more ludicrous:

Golf and public housing may seem like odd bedfellows. But the plan uses as its model Atlanta's East Lake housing and golf development that replaced a notorious Atlanta public housing complex with what by all accounts has become a thriving mixed-income neighborhood. That unique project taps the golf revenue to finance education and recreation programs for families in subsidized housing.

But, the as that TP article indicates, there are two key differences. First, the Bayou District Foundation's plan will cost at least $240 million whereas the East Lake plan cost $128 million. The other difference is kind of shrugged off in the article, but I'm going to highlight it because it's actually a huge difference:

The New Orleans effort lacks a local "sugar daddy," a philanthropist like Atlanta's Tom Cousins, who spearheaded that project after buying and restoring the storied East Lake Golf Club. And so the proposal will have to rely more heavily on nationwide fundraising and federal financing.

Atlanta's East Lake development was financed by a single philanthropist! Our plan relies on taxpayer money and public lands. That's a huge difference.

"This is not a New Orleans fundraising effort. It has to be national," said Gerard Barousse, a real estate executive and managing partner of the Bayou District Foundation. "He (Cousins) told us he will introduce us to people, make some calls."

Genius! Not only are we going to melt our affordable housing tax dollars with a golf course redevelopment plan, but we're also going to rely on our big brother Tom Cousins to introduce us to his friends?

Well, Mr. Barousse, how's that fundraising effort going?

From an April TP story:

The rapid decline in financial markets has upset plans developers made last year to remake the public housing developments with a mix of public and private money. Since the City Council voted to demolish the complexes late last year, a spiraling credit crisis has made banks uneasy about making new loans. Meanwhile, the value of low-income housing tax credits that will be used to finance the projects has declined.

In recent weeks, the Louisiana Housing Finance Agency, the state entity handling the award of tax credits, has said that any affordable housing developers who have not yet closed on their financing plans may find themselves unable to do so.

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Gerard Barousse, managing partner of the Bayou District Foundation, which is redeveloping the St. Bernard complex, said the market has gotten tougher, but he hopes to close on financing in July and begin construction at the end of summer. "There's a little bit of a gap that we're working with, but it's not an insurmountable number," Barousse said.

But Bayou District is still shopping for a lender and tax credit syndicator, making it harder to nail down figures. "We're still sorting through a lot of that," Barousse said.

So it's not working out so well? What happened to all of Tom Cousins' friends that you were going to get introduced to?

Stroke 5: Saving for Par?

Let's once again revisit the words of Carl Greene of the Philadelphia Housing Authority:

. . . I think Alphonso Jackson somehow felt as though he was the king of black people and his job was to somehow [benefit] these black contractors at the expense of the law. . . . [I]t's not just African American because I don't think it's just about black. I would say black-hyphen-socially-elite black. There's still a lot of poor black people out there that I'm in the business of serving every day. [Jackson] wasn't doing nothing for them. He went to Congress and said 'oh yeah give them 75%, give them 76% funding, take away all of their money.' But on the other hand, for one guy who can make some records, or some guy that makes contributions, or some guy that hangs out at the right golf club, I mean, the whole socially elite type that he was interested in - he would sacrifice the whole program for the purposes of benefiting the social elite. And that's what it came down to. It came down to the self-ascribed country club social contacts that he had, and he didn't care about the rules when it came to these folks.

--

I think Jackson was left to his own discretion to do whatever he wanted at HUD and he used that discretion - he abused that discretion - to take care of business and personal friends who became part of an elite social and business network. This was done at the expense of the city of New Orleans and its Housing Authority and if the City Council or the Mayor tried to object then he could always threaten to withhold the money or not give the money. [T]hat was his normal M.O. 'If you don't go along with me then you won't get the money.' It's a 40 billion dollar agency and he's doling out money - he used it as a political weapon to force you to go along with his policy. With the compromising of the political infrastructure [in New Orleans], you had a guy [Jackson] that was in charge of the agency who would beat you over the head with the power of his office if you didn't really vote the way he wanted you to vote on the demolition application, so, effective advocacy for the very very poor folks down there, an effective, professional housing advisory to the Mayor and the Council and the housing authority board was not present. [H]e kind of hijacked that for his office and made it an organization that put on a front of taking care of affordable housing and public housing when at the same time, it was always the people that were part of the social and business elite crowd that he was associated with, that were getting the work.

I've been thinking about what this all means for the city and for the children displaced by Hurricane Katrina and subsequently abused by the affordable housing crisis. It's just so shameful. Not only was Alphonso Jackson executing an increasingly blatant agenda to enrich his elite friends with lucrative HUD contracts or other favors using his political muscle, but our local leadership seemed something more sinister than ambivalent.

They seem complicit.

The racial implications of this are uncomfortable. We have a situation in which Alphonso Jackson and his friends, like Ray Nagin and his friends, have achieved a monetary and social status reserved for a select few.

Golf is symbolic in this sense. It is an exclusive game, a sport with prohibitive membership costs. To get in, the Mayor and his friends and Alphonso Jackson and his friends sold their souls. Their policies and practices have hurt the very communities they purportedly began careers in public service to assist.

Now they serve a different community. They serve Gerard Barousse of the Bayou District Foundation. They serve the Bayou District Foundation's design and construction team (click on 'management team'): Broadmoor LLC is a subsidiary of Boh Bros. Construction.

Now certainly there can be an argument made that the ascent of elite African American business people to country club status is an inspiring feat. Certainly those behind the Fore!Kids Foundation have a stated intention to make golf more accessible to a demographic historically barred from the game.

But I wonder if it's a game worth playing at all. I wonder if it's a game worth teaching our youth. And I'm not talking about golf the sport, I'm talking about the game played by the likes of Alphonso Jackson, Ray Nagin, Jimmie Woods, Alvin Richard, and William Hairston.

Is it really worth teaching a select few how to achieve "success" in a game systematically rigged to prevent the vast majority of their peers from ever playing? Especially when "success" relies upon one's ability to use that exploitive system for one's own selfish benefit at the expense of the larger community.

And that's ultimately what is happening with the St. Bernard redevelopment plan and with the city's larger affordable and public housing non-policy. Rather than address the incredible challenges that ordinary people face every single day in this city and the incredible risks to this city's long, medium, and short term viability, our state, local, and federal leadership has instead adopted a backward trickle-down approach to community development.

Let's not build housing or raise the minimum wage or provide hospitals or schools or public transportation.

Instead let's put up hundreds of millions of dollars for a "vanguard" river redevelopment and promise that the eventual revenue fallout will drip down to residents.

Instead let's demolish salvageable public housing units and install market rate homes to be sold at a profit with the promise that this will help spread neighborhood revival down the road.

Instead let's build three new golf courses and promise that the social benefits of accessibility will allow a few hundred to maybe learn sportsmanship and integrity. We promise that the small business economy will develop as soon as we can get PGA tour events to bring more high end business here.

NO NO NO NO NO.

They want to snooker us into believing that the economic development that follows upfront investment in ventures by and for elite business interests will eventually provide enough tax revenue to then go ahead and invest in the social services and infrastructure necessary to help middle and working class New Orleans families.

That's not what happens. Any increased tax revenue that might arrive will only be reinvested into another chic development project like a new stadium for the Saints or into tax abatements for more luxury condominiums.

That's why you say no right now.

All that initial startup investment they want to shower upon these wealthy developers, contractors, and construction companies might foster more economic development and eventual tax revenue if they put it into the programs, services, and infrastructure that we're frustrated with every day. Maybe instead of investing in a golf course that might eventually entice wealthy golfers to play here, the smarter strategy would be to directly invest into the community so that families will actually want to live here.

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This week, we learned that our fearless President "gave up" the game of golf out of deference to military families suffering through the frustration of a difficult war sometime in 2003.

Yet, at the same time, President Bush's friend Alphonso Jackson was rounding up his own golf buddies for a Katrina aftermath tee-time.

Demolishing and Redeveloping Alphonso Jackson: Part 4

I've been doing all sorts of research on Mr. Alphonso Jackson, former secretary of HUD.

He resigned recently as his office was bombarded by allegations of cronyism and political retaliation.

In Part 1, I described Mr. Jackson's illuminating speech to minority real estate investors in which the Secretary warned potential contract bidders against speaking negatively of the President. I discussed the result of the investigation into his comments: Jackson's own employees testified to Congress that the Secretary had indeed instructed senior staff to look at potential contractors' political orientation.

Part 2 briefly discussed the end of municipal authority over housing in New Orleans. HUD officials took over the Housing Authority of New Orleans in 2002.

Part 3 delved into the scandal that most directly brought about Mr. Jackson's resignation. HUD had been systematically retaliating against the Philadelphia Housing Authority for the agency's refusal to hand over a valuable parcel of land to a well-connected developer who had built only 80 housing units out of 236 required by his contract with the city. Kenneth Gamble, the developer and political player, had cultivated relationships with officials from both parties throughout a long career. However, exclusive WCBF research uncovered that Mr. Gamble had been stringently abiding by Mr. Jackson's advice to minority business contractors. After delivering an address to the RNC in 2000, Mr. Gamble gave exclusively to Republican Congressmen from late 2001 through 2004. When PHA determined that Gamble's nonprofit had failed to meet the terms of its contract, the developer made a personal appeal to his friend at HUD. Alphonso Jackson was willing to hold the entire Philadelphia Housing Authority and its residents hostage by withholding federal money in an attempt to extort a valuable parcel of land to reward a loyal minority contributor.

It was the fallout from this game in Philadelphia that ultimately caused Jackson to step down. Carl Greene, the longtime executive director of the Philadelphia Housing Authority collected the various telephone and email threats from HUD staff over the course of the land dispute. PHA's lawsuit against HUD blew the various allegations of Jackson's improprieties onto the front pages of newspapers and into the consciousness of Congressional investigators. While various allegations had dogged Mr. Jackson for business dealings in the Virgin Islands and in New Orleans, it was the spat with PHA that seemed to bring down the Secretary.

Earlier this week, the Executive Director of the Philadelphia Housing Authority, Mr. Carl Greene was kind enough to speak with me directly about the scandal that brought about the resignation of Alphonso Jackson, his experience working with HUD during the Bush administration, and his view of public housing in New Orleans.

"One thing that came out of one of the depositions that were conducted of some of the HUD staff people was things related to time spent talking to New Orleans, the mayor of New Orleans, and [Jackson] being on the phone with the mayor of Philly or people in Philly. Jackson was directly involved in both cities for different reasons."

"The challenge to him in Philadelphia was that we were our [own] housing authority with administrative control. With the situation in New Orleans, HUD hires and fires the staff. . . He was able to replace [local] people directly. Whereas, in Philadelphia, I really don't work for HUD. I work for a board. I don't work for [Jackson]. He sort of, I think, got a little carried away with himself."

". . . His perception of his power and his influence may have gone to his head with respect to New Orleans and the Virgin Islands because he had control of those housing authorities. . . Therefore, all he had to do was pick up the phone and make some phone calls and get people to do things. Whereas in Philly, when he did that, I refused to go along with it."

I was impressed with the manner in which Mr. Greene used his administrative independence from HUD to expose their efforts at retaliation. HUD was threatening to withhold federal funds for what they claimed was PHA's failure to meet a minimum federal standard of 5% units reserved for disabled persons. To Greene, who is also African American, Secretary Jackson had an agenda designed to serve minority contractors willing to become socially and politically connected with the Republican elite in Washington.

"We did our own independent survey of independent architectural firms to go out and measure every unit - and we have 8%. But they [HUD] didn't want to let the facts get in the way of their vendetta. I think Alphonso Jackson somehow felt as though he was the king of black people and his job was to somehow [benefit] these black contractors at the expense of the law.

". . . [I]t's not just African American because I don't think it's just about black. I would say black-hyphen-socially-elite black. There's still a lot of poor black people out there that I'm in the business of serving every day. [Jackson] wasn't doing nothing for them. He went to Congress and said 'oh yeah give them 75%, give them 76% funding, take away all of their money.' But on the other hand, for one guy who can make some records, or some guy that makes contributions, or some guy that hangs out at the right golf club, I mean, the whole socially elite type that he was interested in - he would sacrifice the whole program for the purposes of benefiting the social elite. And that's what it came down to. It came down to the self-ascribed country club social contacts that he had, and he didn't care about the rules when it came to these folks."

I asked Mr. Greene to provide some insight into what he understood about the public housing situation in New Orleans and the base disadvantages the city faced in terms of lacking independent authority from Mr. Jackson and HUD.

"New Orleans in some respects is like the mothership of tragedy. So many people had to exit the city because of the natural disaster and instead of there being an advocate for New Orleans who really was a housing expert and an advocate on behalf of the Housing Authority who tried to repopulate the city with affordable housing, there was an advocate for Washington who wanted to take care of certain friends. So, taking care of certain socially connected people, the socially elite African American communities that [Jackson] wanted to take care of, meant that the top priority - the thousands and thousands and thousands of folks down there that wanted to come back home - were not going to be getting any housing.

"And what he failed to take into consideration one solution fits all from Washington doesn't work for New Orleans. New Orleans was a unique situation. Coming in there with that Hope VI-type mixed-use development could be a good solution - in some cities it is - but, in New Orleans case, you still need to figure out where all the poor people are going to live. You can't just develop mixed-use housing without providing housing for those folks who are very very poor. You have city where 80% of the people are below poverty and you've built all the houses for a different population. . . Then you had the profiteers, who were socially connected getting all the work."

"In my view, there needed to be a [housing] person whose interest was based on . . . being a champion for the city. . . and fighting sometimes against Washington to benefit better housing down there. That didn't happen. You had Washington in control. You had a self-appointed guy, a guy who ascribed to a philosophy that he was going to benefit socially-connected black contractors and that was his job. . .

"I think Jackson was left to his own discretion to do whatever he wanted at HUD and he used that discretion - he abused that discretion - to take care of business and personal friends who became part of an elite social and business network. This was done at the expense of the city of New Orleans and its Housing Authority and if the City Council or the Mayor tried to object then he could always threaten to withhold the money or not give the money.

"[T]hat was his normal M.O. 'If you don't go along with me then you won't get the money.' It's a 40 billion dollar agency and he's doling out money - he used it as a political weapon to force you to go along with his policy. With the compromising of the political infrastructure [in New Orleans], you had a guy [Jackson] that was in charge of the agency who would beat you over the head with the power of his office if you didn't really vote the way he wanted you to vote on the demolition application, so, effective advocacy for the very very poor folks down there, an effective, professional housing advisory to the Mayor and the Council and the housing authority board was not present. [H]e kind of hijacked that for his office and made it an organization that put on a front of taking care of affordable housing and public housing when at the same time, it was always the people that were part of the social and business elite crowd that he was associated with, that were getting the work.

"In Philadelphia, that's what it came down to, a member of the social and politically elite club and [because] that guy (Gamble) didn't get the work, [Jackson] was willing to destroy the entire Philadelphia Housing Authority. I refused to give it up.

That's why the [Mayor and Council in New Orleans] probably cooperated because if you fought [Jackson], and refused to give it up, especially in the case of New Orleans where he was also administrative receiver. . .

"The naked truth of the matter is citizens in New Orleans do not have housing, do not have a plan for housing, and do not have effective administration of its agency because the commitment to its mission was abandoned post Katrina. There was no mission or commitment to the community.

"When you look at Philadelphia, the man was willing to destroy the whole housing authority just because one individual, who is already a multi-millionaire, did not get a two million dollar piece of land for free. I mean that's a pretty substantial trade-off. We're going to give 2 million dollars to this guy and if he doesn't get it we're going to blow up the quality of life for 84,000 poor people. That's the value system of the man in charge of that agency.

"[Local advocacy] was not possible in [New Orleans or the Virgin Islands]. I had the ability to talk to my federal delegation. . . and apprise them of what was going on in this situation as well as file the lawsuit - in New Orleans there is nobody to that. You need an effective advocate with the competence and knowledge and courage and also the legal position where he's not under the control of someone like Alphonso who did not have the commitment or the compassion for the city of New Orleans."

Someone with the competence, knowledge, and courage to stand up to Alphonso Jackson?

Not in HANO, which was controlled by Jackson directly, and not in the Mayor's office or in City Council which were intimidated by Jackson's threats to withhold federal funds or engage in other forms of political retaliation. Or, more troubling, the Mayor's office and City Council weren't intimidated because they were just as content to ignore the affordable housing crisis as Alphonso Jackson was.

Keep in touch, this series will continue.

Demolishing and Redeveloping Alphonso Jackson: Part 3

I've been researching recently resigned former HUD Secretary Alphonso Jackson's record.
Here's part 1 and part 2.

This post relates more specifically to what I discuss in part 1.

In that post, I relay a hilarious story of this one time in Texas where Alphonso Jackson told a conference of real estate developers that he had once canceled someone's contract because the person had been criticizing President Bush. Then when people began asking questions, Mr. Jackson and his press office determined that it would be best to claim that the story was a fictional tale.

Travel with me now, to Philadelphia. Let us go to the Hawthorne section of South Philly. Walking distance to Center City, the Italian Market, South Street, and my childhood home. Hawthorne is remarkable because it has been slower to boom despite it's proximity to yuppie and hipster hot spots Queen Village, Bella Vista, the Gayborhood, and the cultivated S. Broad St. Arts District.

It is home to the Martin Luther King Jr. public housing development, which has been slowly redeveloped over the last decade. The large towers that characterized the old MLK fell out of favor with HUD nationwide and the blistering pace of gentrification in the general area made MLK an obvious choice for reconstructive surgery. Way way back in October, I actually took pictures of the new MLK projects, recently finished, for this post. That discussion was about architectural design principles and I was using MLK as a positive example of new construction.

When the Philadelphia Housing Authority, in 1999, awarded the MLK redevelopment project, they selected the non-profit Universal Community Homes and the for-profit Pennrose Properties to build over 200 new affordable homes on the site formerly occupied by the four hulking towers, which were razed. Universal Community Homes was controlled by Kennith Gamble, formerly a legendary musician, now a Philadelphia heavy hitter. Gamble was born and raised in the Hawthorne area, so he was an obvious partner for the project. As an incentive for all the help in constructing the new units and providing social services for residents of the community, Gamble's agency was to receive a large parcel of land on which to build market-rate homes and a significantly reduced cost. Win-win right?

Wrong. Longtime Executive Director of the PHA, Carl Greene didn't think the city got what it paid for:

But the partnership finished only 80 of the 236 units they contracted to build, because Pennrose pulled out of the project early on. Pennrose President Mark Dambly said the decision was mutually agreed upon by the builders and the housing authority.

The authority stepped in to help finish building affordable homes and rental units with Universal. But Universal failed to deliver any of the services it had promised, Greene said. The authority concluded that, as a result, it was not obligated to give Universal the vacant land where it planned to build market-rate homes.

Greene said Gamble told him in a 2006 meeting that Gamble didn't have to worry about defaulting on the King project, because he had important friends and Jackson was one of them. HUD officials said Gamble socialized often with Jackson.

Gamble did indeed learn the way to make important friends, contributing at least $250,000 to various political campaigns since 1988, playing both sides of the aisle:

While most of his contributions went to Democrats, he also gave to some Republicans, including Sen. Arlen Specter, former Sen. Rick Santorum, and the National Republican Congressional Committee.

I searched a little further to get the specifics. The website opensecrets.org can provide some interesting finds if you have the time to browse around. Unfortunately, it only tracks contributions in campaigns for federal positions.

I looked up to see where Kenneth Gamble has been throwing around his money and I found some interesting tidbits I'd like to pass on. It may be boring, but I don't think this has been illuminated in such detail before.

First, he's given A LOT of money to PA Senator Arlen Specter over the years, more than any other individual, $5,000 between October 2001 and 2003.

In October of 2002, he gave $500 to PA Congressman James Greenwood, now known to be a top lobbyist for the biotech industry.

In late 2002, he gave $1000 to PA Senator Rick Santorum.

In late 2003, he gave $1000 to Ohio Senator George Voinovich.

Now that's really interesting to me. All of those donations were to Republican elected officials between October 2001 and the 2004 election.

How many Democrats did he give to during that time period?

Zero!

In fact, the only Democrat he gave money to during George W. Bush's first term was Philadelphia Congressman Chaka Fattah, who got $1000 in July of 2001. Fattah has risen within the Democratic Party and, like him or not, is extremely influential throughout the Philadelphia political landscape, particularly when it comes to housing issues.

Gamble did indeed give to some Democratic candidates prior to President Bush's election in 2000, including $1000 to Philly machine leader Congressman Bob Brady in 2000, $1000 to pathetic Senatorial candidate Ron "Don't Call Me Col." Klink in 2000, and $1,000 to Mo. Congressman Dick Gephart in 1998.

So why is this important?

Because it essentially proves that Gamble jumped on the Republican bandwagon after they were clearly on their way to electoral gains after the fall of 2001. He gave to ZERO Democrats during a critical time in which he was defaulting on his promises to the Philadelphia Housing Authority.

So as Mr. Gamble was failing to live up to the terms of his agreement with the Philadelphia Housing Authority, he was also cultivating political capital with what was then the winning team in Washington.

When, in 2006, Mr. Gamble was informed that his Universal Community Homes would not be receiving the parcel of land on which it had been counting. Market rate units built on that site, given the neighborhood's increasing popularity, could have been expected to net Universal over $10 million.

Mr. Gamble was furious. In the summer of 2006, Mayor Street brought Mr. Gamble and PHA Executive Director Carl Greene together.

Greene refused to give the land to Universal. He said Universal hadn't done any work to earn it. And if Gamble didn't like it, he could get a lawyer to negotiate buying the land.

After Street had left and the meeting had ended, Greene said, Gamble leaned toward him and said, "I don't need lawyers."

"I have friends."

Thus, Kenneth Gamble sought to cash in on all of those friends he had purchased in Washington during President Bush's first term. He'd been a team player, after all.

Gamble reached out to HUD Secretary Alphonso Jackson. Mr. Jackson, as I described here, seemed to be in the business of using his office to play political favorites:

"Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."

Gamble arranged to host Mr. Jackson in Philadelphia and toured him around the MLK site and the parcel of land he had hoped to acquire for free from the city.

Here's what happened:

When Greene learned of the housing secretary's visit several days later, he was livid.

"I'm used to people pushing back and calling in favors, or calling politicians," Greene said. "That happens every day. But it's very unusual for the secretary to come personally to Philadelphia, to personally visit the site, and to draw a conclusion without ever having a dialogue with us."

Jackson followed up with a call to Street. According to PHA's lawsuit, Jackson directed Street to convey to Universal the two parcels of land for the houses.

Greene said no.

Shortly after, PHA was put on notice by HUD that it was at risk of defaulting on its agreement to redevelop the Martin Luther King projects. HUD froze PHA's $125,000 line of credit.

The reason given: PHA's failure to renovate the community center, develop the park and build the 19 market-rate houses.

Then, months later:


On March 13, 2007, Universal hand-delivered a settlement offer to Street.

It offered to buy the land for the 19 market-rate houses from PHA for $506,000 - about a fourth of the appraised value.

The community center and park were not mentioned in the letter to Street. But according to Greene, Universal still wanted to take them over at no cost.

Two days later, Greene said, he got three calls from HUD officials, asking about the project at the request of Jackson.

Instead of negotiating, Greene dictated a formal complaint to HUD's inspector general.

Later, HUD used their own assessment of whether or not PHA's had provided enough housing to persons with disabilities to curtail the Philadelphia Housing Authority's freedom to spend federal money late last year, potentially stalling $50 million from the PHA budget. This, Greene argues, was another HUD effort to retaliate against PHA for its refusal to do Alphonso Jackson's bidding on behalf of Kenneth Gamble and Universal Community Homes.

PHA's Carl Greene, it seems, had been anticipating such a confrontation. He collected dozens of emails from HUD staff and from Jackson and recounted telephone conversations that, in essence, formed the basis of the Philadelphia Housing Authority's lawsuit against HUD.

Once that suit was filed, the details of various attempts by Alphonso Jackson and his employees to strong-arm PHA into handing over the disputed property to Universal became public.

The ensuing Congressional investigation of HUD focused on these allegations of political retaliation and Jackson resigned within a few short months.

Demolishing and Redeveloping Alphonso Jackson: Part 2

See Part 1 Below

Alphonso Jackson joined the Bush Administration in 2001 as Deputy Secretary and Chief Operating Officer of HUD. He became Secretary of HUD in 2004.The Housing Authority of New Orleans was taken over by HUD in 2002, though the writing was on the wall well before then.

In fact, officials from HUD had withheld funds from HANO on several occasions over the last few decades. During the Clinton Administration, HUD Secretary Cisneros negotiated a cooperative agreement between HUD and HANO officials to try and hammer out a better management plan. When HANO failed to live up to that agreement, Cisneros renegotiated.

Historically, the rift between HANO and HUD had to do with HANO's inability to implement national housing standards with the federal funds provided. In one despicable incident in 1988, the Smith family of the Desire Housing Projects, including four children, perished in a fire. Two weeks earlier, HANO had failed to cash in on a federal grant to install smoke detectors. While the Smith children burned to death, the smoke detectors that could have saved their lives sat unused in a New Orleans warehouse.

(In an unfortunate aside, the head of HANO, Jessie Smallwood had this to say regarding the fire: "I don't want to belabor that we could've or should've. . . I don't feel anyone should be blamed." Jessie Smallwood now works in Ed Blakely's Office of Recovery Management.)

Now I don't want to belabor the deterioration of HANO's ability to maintain quality public housing because there is a limit to what is available online from that era. Nonetheless, it is clear that as the Clinton Presidency came to a close, HUD officials continued to be frustrated with HANO's handling of funds. Thus, when the Bush came to power, the political will was in place (Fascinating hearing in New Orleans attended by Congressmen Vitter and Jefferson) for a complete takeover of HANO.


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Readers, please help me in the comments section. I would like more information about HUD's takeover of HANO in 2002. If you have a good memory, let me know what you recall. If you have stacks of old copies of the Times-Picayune, scan some relevant articles for me. If you have three or four hours to burn, go to the library for me tomorrow. Seriously though, can anyone recall which politicians were on which side during that debate. I know that Mayor Morial had tried to get a judge to appoint a manager for HANO from outside the ranks of HUD but that the courts rebuffed that plan. I am under the impression that Congressman Jefferson supported autonomy for HANO while Congressman Vitter did not. Give me a hand here if you can. Anyone?

Or if you don't remember the HUD takeover in 2002, I'm also interested in HANO's failures during the '80s and '90s. Perhaps you remember news stories from that era. Perhaps you remember the tragic fire that killed the Smith family in 1988. Perhaps you've heard anecdotal hearsay about inefficiency. Paint a picture for me. I'll have more on Alphonso Jackson, HUD, and HANO as the week progresses. (You can bet there will be a Philadelphia connection)

Demolishing and Redeveloping Alphonso Jackson

Until recently, Alphonso Jackson was the Secretary for the Department of Housing and Urban Development. He was appointed to that post by President George W. Bush, a longtime friend. Mr. Jackson had once lead the Housing Authority of the City of Dallas.

As far as I can tell, Mr. Jackson served without incident until some troubling comments surfaced when the Secretary addressed the Real Estate Executive Council in Dallas. During his speech, he relayed a story that described an incident in which a qualified contract proposal was denied for purely political reasons:

"He had made every effort to get a contract with HUD for 10 years," Jackson said of the prospective contractor. "He made a heck of a proposal and was on the (General Services Administration) list, so we selected him. He came to see me and thank me for selecting him. Then he said something ... he said, 'I have a problem with your president.'

"I said, 'What do you mean?' He said, 'I don't like President Bush.' I thought to myself, 'Brother, you have a disconnect -- the president is elected, I was selected. You wouldn't be getting the contract unless I was sitting here. If you have a problem with the president, don't tell the secretary.'

"He didn't get the contract," Jackson continued. "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."

This sparked a relative firestorm for the Secretary. Congressional Democrats wrote to HUD's Inspector General demanding an investigation. (Including Senator Lieberman, who was still a Democrat at the time)

Jackson was forced to backpedal from the initial story. He tried out a number of defenses through his spokeswoman, Ms. Dustee Tucker.

Initially, Ms. Tucker sought to calm the uproar by explaining that this potential contractor did more than just criticize the President, but did so "trashing, in a very aggressive way."

Quickly, it became obvious that this response was not going to placate anyone. Ms. Tucker's statement only seemed to confirm that a HUD contract had indeed been pulled because of criticism of the President. Surely the media would want to know who the spurned contractor was. Surely the media would continue to ask questions relating to Mr. Jackson's credibility as steward of HUD.

Thus, Jackson and Tucker changed their official tune. In fact, they argued, Mr. Jackson had never ever awarded a contract based the political viewpoints of the potential recipients. In fact, nobody had ever "trashed" the President "in a very aggressive way."

Rather, Secretary Jackson had fabricated the whole thing. The story he'd told to the Real Estate Executive Council in Dallas was fiction. He'd relayed it as a fable of sorts:

"It's not a true story. It's a made-up story," said Jackson spokeswoman Dustee Tucker, adding that he was only trying to make a point about how Washington works.

Point well taken. A few months later, the Dallas Morning News was shown a copy of the internal investigation of Mr. Jackson conducted by HUD's own Inspector General. Though that investigation did not find any "direct evidence," it did yield this fine tidbit of information:

Several top HUD officials – themselves political appointees – testified that Mr. Jackson told senior staff at a meeting a few months before the April 28 speech in Dallas that they should consider contractors' political leanings. He urged them to give contracts to Bush supporters and voiced concerns about any going to active Democratic donors, the aides said.

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Remember that for later.