City Council ordinance seeks to limit Mayor's discretionary powers, but only this one time

Yesterday, I wrote about the potential for increased federal scrutiny over the manner in which D-CDBG funds are being monitored by the LRA and used in Orleans Parish.

Recently, Mayor Ray Nagin revived plans to purchase the Chevron Building even though City Council had voted against pursuing such an agreement last summer. The Nagin administration has argued that because only funding sources independent of the city budget would be used - the revolver fund or D-CDBG money - Council has no legal oversight authority. Presumably, that logic would extent to every project the Mayor might pursue using non-budget recovery dollars.

I've now learned that City Councilmembers Jackie Clarkson, Arnie Fielkow, Stacy Head, and Shelley Midura have cosponsored an ordinance that would require the Mayor to disclose plans to use money from the capital project fund or D-CDBG funds and to obtain Council approval for those plans.

Read the ordinance here.

The ordinance only applies to "City Hall Project Worksheet 7746," which represents the proposed purchase of the Chevron Building.

It does not tackle the larger questions about the mayor's power to use D-CDBG and revolver fund money in a discretionary fashion and would not preclude the mayor from applying recovery dollars to other projects such as the proposed LSU/VA hospital or the proposed renovation of Municipal Auditorium with little disclosure or oversight.

The measure will be up for a vote at City Council on Thursday, January 21st.

HUD Monitoring Disaster CDBG Funding More Closely?

For more than a few weeks, American Zombie and I have been wondering aloud Mayor Ray Nagin administration's interpretation of laws governing money outside the parameters of the regular city budget, as well as City Council's oversight of that money.

Of particular concern is the "revolver fund" that the Louisiana Recovery Authority established to advance cash to parishes to pay for projects that will eventually get FEMA reimbursement. Nagin wants to use some of that money to buy the Chevron Building and convert it into a new city hall - even though the council has already rejected such a move.

A statement from Nagin spokeswoman Ceeon Quiett makes it clear the administration believes it has discretionary power over funding streams like the revolver fund and that the council has no legal oversight.

"The matter before the City Council was the appropriation of funding from one capitol [sic] account to another ..not an approval of the acquisition. Funding appropriation –Legislative Branch authority per the charter, Purchases –Executive Branch authority per the charter."

To clarify, Quiett is saying that the proposal to buy the Chevron building that was shot down by City Council over the summer involved the city budget. Because the most recent proposal only uses money from state and federal sources, such as the revolver fund, there is no formal oversight process through which the administration must seek City Planning Commission or City Council approval. Whether that is accurate is debatable, but it is the administration's position nonetheless.

Presumably, that position extends to the city's use of the Disaster Community Development Block Grant money, for which the LRA is the local administrator of federal funds from the U.S. Housing and Urban Development Department. The City Council had obligations when it comes to this money in that the LRA required a recovery plan with community buy-in, including Council approval, before the agency would release the HUD funds.

However, when it comes time to allocate real capital to a specific project, the modification of the original plans accepted by the LRA, or the reallocation of surplus money from a specific project, it would appear that the Mayor has vast powers.

Once the Council approves a framework for yearly DCDBG expenditures, only the LRA or HUD would be in position to block funding for a specific project submitted by Nagin on the grounds that it deviates from the original recovery plan, anticipated expenditures were vaguely documented or if HUD regulations are otherwise violated.

Since the Obama administration took office and Shaun Donovan was sworn in as the new secretary, HUD has been more proactive about cracking down on dysfunctional projects. HUD's receivership of the Housing Authority of New Orleans, for instance, has been totally reshuffled amid widespread allegations of graft and waste.

There is also evidence that HUD is taking a fresh look at its role in the hurricane recovery process both in New Orleans and elsewhere.

In November, AP reported that a HUD review had discovered over 11 million in unaccounted disaster money at the New Orleans Redevelopment Authority (NORA) that had fallen victim to poor record keeping or a failure to follow HUD regulations.

That same week AP also reported that HUD had rejected Texas' recovery plan for rebuilding areas badly battered by Hurricane Ike in 2008. The notification letter from HUD, which you can read here, suggests that Texas' plan was denied for failures to comply with federal citizen participation requirements.

Are these recent actions highlighting regulatory compliance issues in New Orleans and Texas indicative of a much more widespread concern on the part of HUD administrators that processes governing the efficient use of recovery money were poorly constructed, inattentively followed or even explicitly violated?

What effect will increased federal scrutiny have on controversial local projects, such as the Municipal Auditorium renovation and the purchase of the Chevron Building, for which the Nagin administration claims the City Council has no stipulated oversight authority?

To what extent does the council concede or dispute the administration's interpretation of their oversight authority over irregular DCDBG and revolver funds? How does that effect their ability to halt the mayor from spending money on major developments should they wish to do so?

While the upcoming elections have clearly taken center stage, the dispute between the outgoing administration and the City Council over the discretionary use of federal and state recovery dollars is the most important subplot for engaged citizens to closely monitor. It is this fundamental interpretation of City Charter and of HUD rules and regulations that looms over the individual development controversies that grab headlines - from Municipal Auditorium to Lower Mid-City and the proposed medical complex.

When news broke that the Chevron Building purchase was revived, City Council members expressed surprise and confusion. Yet since the New Year, there appears to have been no follow-up. It should be very interesting to watch what happens as specific projects begin to initiate expenditures.

Process Matters: The Revolver Fund and the Chevron Deal

I think WDSU was the first to report on it but the Times-Picayune has a story as well.

I also learned earlier today that the city was again pursuing the acquisition of the Chevron Building and the abandonment of City Hall. The section 106 (historic review process) notice is here and supporting material is here.

Both of those articles remind us why this is news. Over the summer, the administration negotiated with Chevron Corporation to potentially purchase the Chevron Building from the oil giant for the price of $8 million, pending the process stipulated by City Charter.

There was a process. The City Planning Commission held a hearing and a vote. The City Council held a hearing and a vote.

City Council voted against the project.

So some members were apparently surprised today to learn that the administration was going to go ahead with the purchase and relocation anyway. Travers Mackel reeled in Shelley Midura:

"This is news to me," she said. "(The information) is not factual. The city determined in July that it would not buy the Chevron Building and would not move any city offices into that building."

Frank Donze also caught up with the Councilmember from District A:

She said she has "serious concerns about what is going on here" and described any effort to acquire the Chevron complex with state and federal money as "an undisguised attempt to avoid the council's involvement, and, unfortunately, part of a disturbing pattern of this administration."

Later, I emailed Councilman Arnie Fielkow for his thoughts:

We only learned of this today and are trying to get many of the same questions answered. I, and many other cms, do not support this! The entire project needs to be better thought out, master planned and left to the next administration and council!

And Councilwoman Stacy Head for hers:

I have no idea how he plans to do this without council approval. I am calling around to find out.

I also emailed Ceeon Quiett at the Mayor's Office of Communications. Here is what she wrote back:

The matter before the City Council was the appropriation of funding from one capitol account to another ..not an approval of the acquisition. Funding appropriation –Legislative Branch authority per the charter, Purchases –Executive Branch authority per the charter. The Mayor and the City Council both believe in the relocation of City Hall and the viability of the Chevron building. To this day, as the media has reported, leaking roofs, lack of hot water, broken elevators remain. As you remember FEMA has recognized the depth of damages to 1300 Perdido St. City Hall. Over $5million has been approved by FEMA for City Hall.

--

I think the administration is arguing that City Council and the City Planning Commission had oversight power over the original proposal to acquire the Chevron Building and mothball 1300 Perdido St. from this past spring and summer because at that time, they were being asked to fund the purchase using the city's capital budget.

Indeed, the city's original deal was to purchase the Chevron building for $8 million by using the $5 million FEMA has pledged for damage to our current City Hall and cobbling together the other $3 million through bond sales and the capital improvement budget.

This time is different, from the Mayor's perspective, because the executive is simply moving forward with the execution of a purchase and is not pursuing funds from the budget, which would reengage the a cycle of public hearings and votes by Council and the City Planning Commission.

The administration's position is that it did not need approval for the project itself, just the funds to move forward with the purchase. Ms. Quiett reminds us that FEMA has already allocated $5 million. That still leaves the same $3 million shortage for the price of purchase alone, ignoring the cost of renovation as a factor. I suppose that means that this time, administration is going to fill in the rest using funds that they have the authority to move around in a discretionary fashion without triggering a cycle of hearings.

--

I closely followed Dambala's recent piece about the potential pitfalls involved with discretionary use of Disaster Community Development Block Grant (DCDBG) funds, which come from the federal Department of Housing and Urban Development (HUD) and are administered by the Louisiana Recovery Authority (LRA).*

Today, he has a post about today's new controversy about the Cheveron Building in which he indicates the administration is planning to use what is called "the revolver fund" to avoid initiating the CPC and Council oversight process.

The revolver fund was set up by the LRA to help hurricane-damaged parishes scrounge up the cash to initiate recovery projects. For instance, when FEMA agrees to reimburse the City of New Orleans a certain amount of money for damage to a public building, they don't just cut the check so the city can go and hire a construction firm. Instead, FEMA reimburses the city once the work has begun. This protects taxpayers by ensuring that these recovery dollars are applied to restore the infrastructure that was damaged and not to other purposes but it also hurts the liquidity of parish level and municipal governments by requiring them to front the cash for all of these projects. To fix the problem, the LRA created revolver funds to help parish and municipal governments get cash up front. New Orleans can now tap revolver money to pay for projects and then repay the revolver fund when FEMA reimbursement checks cleared.

Dambala says today that:

The problem with that equation is that any money spent under the Revolver system must meet FEMA requirements for spending. If you recall in my previous post, the FEMA requirements state the the money can't be used for new development....they can only be used for repairs of exising infrastructure.

But FEMA requirements aren't that inflexible. FEMA money can be applied to a new development, if it is classified as an "improved project." That is what the city requested in its letter (see the WDSU story or the attachments linked at the top of this post) to FEMA.

I am trying to understand, from a procedural standpoint, how the administration can use revolver money for discretionary purposes. The idea is that the fund fronts the city cash for a specific, reimbursement approved project and then the city reimburses the revolver once the FEMA money comes through. Seems like a simple, clean transaction. But it's more complicated than that.

For instance, under the School Facilities Master Plan, the Recovery School District is not rebuilding every single school for which it is receiving FEMA reimbursement money. Or, under the plan guiding construction for the New Orleans Public Library, the city is not rebuilding every single branch for which it is receiving money from FEMA for flood damage.

One would assume that the city would apply every dollar from FEMA toward reimbursement for damaged libraries (just as an example) to building new libraries, even if the plan is to build fewer libraries in a more consolidated system. But maybe that's not the case. Conceivably, if the city spends less out of the revolver fund than they take in reimbursement money from FEMA, there would be a stash of surplus cash sitting in the revolver fund.

FEMA is not, I don't think, supposed to reimburse for construction that is not performed. If the city uses $10 million in revolver money, they're only supposed to get a $10 million check from FEMA to repay the revolver even if FEMA had budgeted $20 million for their assessment of damage. But I don't really know how it works in practice. It might be that the City allocates money from the revolver and gets an expedited reimbursement based on the allocation instead of the actual expenditure.

Some reader insight on this would be great.

Dambala says it is understood that the money leftover in the revolver when it is no longer needed to front anticipated reimbursements would go into the city's pot of remaining DCDBG funds and could be reapplied to other purposes. Is that what is understood and is that what is happening now?

I also want to know more about how oversight and administration of the revolver fund works. My sense is that it is something the LRA created for the Mayor's office to help with cashflow, is not something that is considered a part of the city's revenue or spending streams, and is therefore hidden from the regular budget process. Does that mean that a hypothetical surplus in the revolver fund is purely a discretionary tool for the executive branch? If Council doesn't have oversight over that money, does the LRA?

If there's anybody out there who can add some detail, answer some questions, or correct my mistakes, please leave a comment or email me.


*I have additional analysis and questions on this matter as well that I'll have to tease out in another post. I have been very curious about unaccounted discretionary spending, the 2010 budget, and the use of DCDBG funds as it relates to the demolition of Lower Mid-City and the proposed LSU/VA. If you've been itching for more information about what Dambala might be talking about, check out this story and video. It'll get your brain churning a little bit but it might give you more new questions than new answers.

Hot on HANO

Just in case you don't remember our friend Elias Castellanos, I wrote about him recently.

I have been meaning to do some follow up on this amazing article by the T-P's Katy Reckdahl, which I think people may have missed because all of the goodies are buried after the fold. While I work on that, I want to make sure you've seen this. (Emphasis mine; bizarre formatting theirs)

Letten's office last month charged Castellanos with embezzling the money over three years. During the same time period, the indictment noted, Castellanos had bought a $1.6 million mansion in Davie, Fla., just north of Miami, and five high-end cars -- a Lamborghini Gallardo worth more than $200,000, a Ferrari F430, a Porsche 911 and two Mercedes-Benzes.

It's not clear whether Castellanos has sold any of his luxury items, but he has repaid $675,037 so far, Letten said.

Alan Baum, Castellanos' attorney, said that his client had no comment.

FBI agents and the U.S. Department of Housing and Urban Development's inspector general's office spent a year sifting through Castellanos' invoices and transactions. Letten said that Castellanos' theft was discovered during an unrelated inquiry. He added that the authority is the subject of other investigations -- "plural" -- that he could not discuss.

--

Castellanos' successor, Edwin Jamora, said that earlier this year, he had put a stop to years of routine payments made from HANO to Genalyn Duka, a subcontractor with a Florida address who colleagues told him was Castellanos' wife.

--

Three years ago, HANO hired Cabellero & Castellanos to clean up its finances, and Castellanos soon made the department his own.

"There was a complete turnover of personnel responsible for the accounting and finance activities of HANO, " according to HANO's independent audit that year.

It's unclear how much progress Castellanos made in the department, which had to be re-created from the ground up after the post-Katrina levee breaches inundated HANO's Gentilly offices.

But when Jamora took over the department more than two years later, he found it in disarray.

By then, HANO had cycled through two annual contracts with Castellanos totaling $6 million and was in the middle of a third, this one worth $2.4 million.

Despite that investment, when Jamora arrived in February he found no monthly statements and no general ledger. Annual state-required audits hadn't been correctly filed for years, he said.

The conditions made it "truly difficult" to detect both well-meaning errors and intentional corruption, said Jamora, who was fired from HANO earlier this month and agreed to an interview.

Jamora, who felt he made real progress in cleaning up the mess he found, was told by federal housing executive Karen Cato-Turner that he "wasn't a good fit" for HANO, he said.

Upon his arrival, Jamora, who had been a financial director at Philadelphia's housing authority, was shocked to find HANO paying $8,000 a month for what he called a "Jurassic" computer package, so outdated that it couldn't run financial statements.

Jamora said he began an inventory of HANO's fixed assets, which hadn't been done since 2002. And he recommended that HANO hire independent accountants to implement past audit recommendations, he said.

Audits from each of the past seven years have outlined significant financial problems, but the problems appear to have been ignored.

Terry R. Cassreino, communications director for HANO, issued a statement after Castellanos pleaded guilty.

"HANO and HUD are pleased to see this case come to a quick resolution with Mr. Castellanos pleading guilty. HUD has clearly and consistently stated that neither HUD nor HANO will tolerate any fraud, abuse or misuse of our funds as we carry out our mission of providing housing options for the citizens of New Orleans." Castellanos' plea comes in the midst of a string of scandals at HANO. Early this year, HUD's inspector general found that HANO's financial statements improperly documented or reported at least $7.2 million in voucher and housing expenses.

In May, the housing authority placed three employees on leave because of a ruse that siphoned hundreds of thousands of dollars to an employee's son and former boyfriend.

More recently, the man running HANO's Section 8 program -- designed to help the poor afford rent -- resigned amid allegations that he was benefiting from a voucher administered by HANO, despite earning a $100,000 salary.

Jamora said that agency policies sometimes frustrated his efforts to root out problems. For instance, he said, he wasn't allowed to speak directly with HUD or its inspector general; all conversations had to be routed through Cato-Turner.

HUD spokeswoman Melanie Roussell, speaking on behalf of HUD and HANO, said last week that anyone could talk with auditors.

"Consistent with HUD policy, all staff are encouraged to be responsive to investigative inquiries, " Roussell said.

But a May 1, 2008, memo from Cato-Turner to the staff prohibits anyone from talking to "governmental officials."

That didn't make sense to Jamora. "I used to be an auditor. I speak the same language, " he said.

This sounds like a pretty big deal. Castellanos was stealing money - a million bucks - from HANO in the most blatant way but his graft was stumbled upon accidentally in the midst of "plural" other investigations into white collar crime at HANO.

I'm looking for more information about her, but this Karen Cato-Turner character already sounds like a real winner.

She was appointed as the administrator of HUD's receivership of HANO in November, 2007, at the height of the public housing controversy, by disgraced former HUD chief Alphonso Jackson.

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.

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.

Bum Rush

Everybody's getting in on the act these days, huh?

Senator Landrieu has been empowered to go after the Nagin administration, and Ed Blakely in particular, it would seem.

This all stems from Lee Zurik's report on unspent HUD money from last week.

First, the threat to pull the funds:

"I would like to work with the city of New Orleans to secure an extension of the deadline by which the HOME funds must be expended, " Landrieu wrote. "However, unless the city of New Orleans can commit to working with my office to ensure that these funds are going to be spent effectively, I will be compelled to appeal to HUD to identify an alternative recipient for this funding."

Second, a big unless:

Landrieu, who sits on the powerful Senate Appropriations Committee, went on to say that the city would have to make "significant administrative changes" for her to endorse another extension. Her spokeswoman, Stephanie Allen, said Landrieu specifically wants to see improvements at the city's Affordable Housing Bureau, which is rebuilding its staff.

Think they've got someone specific in mind?

Incompetence has consequences!

Big time props to Lee Zurik his latest report. The city is apparently ready to leave millions of dollars of federal HUD money on the table after years and years of failing to spend it on its intended purpose: affordable housing.

Remember, the lack of affordable housing is the biggest obstacle preventing displaced New Orleanians from returning home. City officials, though they have failed to implement anything close to their own coherent plan for the restoration of affordable housing, have continuously harped on the ongoing affordable housing crisis as a primary impetus for increased federal funding. And this whole time Blakely has just been sitting on close to $31 million.

All of the BS that we put up with - the incompetence, the gridlock, the lack of accountability, the lack of strategic vision - it ain't just politics. It's people's lives.

--

The worst part is when Blakely tries to spoon feed us this horseshit explanation for why the money has been spent. He claims that nonprofits and contractors aren't around to apply for it.

Thankfully, Lee Zurik doesn't leave it to us to just assume that that statement is an outright lie because he finds proof.

James Perry, the head of the New Orleans Fair Housing Action Center, said he runs a non-profit that requested money.

“That’s not true,” he said in response to Blakely’s statement. “The money we applied for is combined CDBG and home funding and we were awarded the money.”

Perry said that months later he received an e-mail saying the city put the money on hold. He said many non-profits have been ready to do work since the storm, but the city won’t spend the money.

“When you drive through Lakeview or Gentilly or the Lower Ninth Ward, the thing that stands out is the housing is not there. Imagine how much housing could be back in commission with that money; it makes no sense,” Perry said.

If I saw Blakely right now I'd have a hard time not spitting right in his face.

Get the hell out of here you asshole.

WTF?!?

So much is happening in the world of municipal politics this week it's hard to keep track of it all.

We've got HANO whistle blowers coming forward in advance of new HUD chief Shaun Donovan's visit.

New DHS Chief Janet Napolitano also comes to town for the first time this week as new allegations swirl around the New Orleans FEMA office.

The Office of the Inspector General has released its report on the perpetually wasteful crime camera program and criminal prosecutions seem likely.

Then there is this email clusterf#ck.

WWL has been suing the city for access to public records that the Office of Technology says were deleted, while simultaneously our old friend Sanitation Director Veronica White was somehow granted access to the City Council's email archives, which she promptly turned over (without checking for privileged material potentially related to ongoing lawsuits against the city or FBI investigations) to civil rights attorney Tracie Washington. City Attorney Penya Moses-Fields claims to have been unaware of this until last week, after the emails had been delivered to Washington.

White is on vacation somewhere.

Talk about inside baseball! There are many layers to this onion.

And these last few items, as Oyster says, are probably related.

Helluva week, huh?

Please submit your theories as to how the email kerfuffle went down. What do you think happens next? Do you believe that Moses-Fields didn't know? Is Veronica White going to be held accountable? Or do they circle the wagons once again? What's the most sensitive item hidden in those emails? I know I'd love to take a look for myself.

Transparency, right?

--

I know Tracie Washington is probably going to take some heat for only requesting emails from the white members of City Council. But let's put this in context. Only three Councilors actually answer emails anyway. So the real question is what the hell she possibly hoped to get out of Jackie Clarkson's virgin email account. Jackie has always struck me as a rotary phone kind of gal.

Obama, Cities, and This City

Yesterday I mentioned Barack Obama's plans for an office of urban policy.

Obama transition co-chair Valerie Jarrett mentioned it again later to NPR.

Block: "What would that office do that's not already being done by other departments already?"

Jarrett: "When you said 'other departments' you hit the nail on the head. . . It's really important that we take all of those different agencies and have a comprehensive approach to our urban development. And so having someone in the White House who going to be an advocate for cities and take all the variety of federal programs and target them in a logical and systematic way is part of what President Obama is trying to get at with this position. Those of us that have worked in city governments recognize how invaluable that person will be."

If it hadn't occurred to you yet because you were too preoccupied with obsessively checking poll numbers this whole time, we're actually going to have a President with ideas and initiative.

You might have even realized that of course Obama would be investing in our cities, but you have to admit it's difficult to truly imagine what actual federal investment looks or feels like. It's been a long time since we've had to think about practicalities - a President that cares about cities has always been more of a theoretical proposal.

So I think it might be useful to start considering how the new office of urban policy comes to interact with existing agencies and our priorities on the Gulf Coast.

Immediately, when I think "city" and "federal agency," I come up with HUD, the cabinet-level position governing housing and urban development. Would Barack Obama's urban policy department supersede HUD? Or would there be separate cabinet positions for a stripped down department of housing and a newly minted department of urban policy?

HUD in its current form has few fans. Not only was it turned into a patronage palace under George W. Bush and Alphonso Jackson, but many consider it to have acted as a marginal policy agency even during friendlier, more competent administrations. Conservatives, on the other hand, never really supported HUD in the fist place.

Thus, Obama's department of urban policy signals the death of HUD. It is unclear whether or not a new department would be created to just to handle housing or if housing would be a subdepartment within the new urban policy agency. I suspect the former scenario.

What about the recovery of the Gulf Coast? What about New Orleans?

New Orleans still qualifies as a city. Would the special help it needs become the responsibility of the department of urban policy? Or does Obama maintain the Gulf Coast Recovery Czar position as a separate cabinet-level coordinator?

I see how this can get complicated...

Now, HUD distributes Community Development Block Grant (CDBG) money. It is pretty clear that that would fall under the purview of the theoretical urban policy department but how much say will that department have over how cities spend?

In my heart, cities would be able to spend CDBG money as they see fit on projects critical to neighborhood vitality and regional sustainability. In my head, I know that some cities aren't capable of distributing those funds responsibly or even determining which development projects are most important.

During those rare events when we're able to account for how Nagin and Blakely have spent some of New Orleans' CDBG money, you can't exactly be happy with our leadership's priorities.

Barack Obama's department of urban policy, therefore, needs to have the power to set and enforce rules on how development dollars are spent. Not only does it need to set up better monitors on the money so that it doesn't disappear, but it needs to be able to ensure it be used for progressive development policies. What's sad is that many other liberal cities have leaders capable of setting those priorities independent of federal intervention. The federal government, in those instances, would just need to sign the checks and let the city or the region implement.

New Orleans is not ready for that. Our administrative systems do not inspire public trust. Our leaders have not set sensible priorities.

So for New Orleans and for other cities with long histories of systemic corruption, incompetence, and undemocratic practice, Barack Obama's new urban department is going to need to be more proactive than just setting policy guidelines and operating the paper work machine - some cities will need more direct action from the feds.

This is one of them.

Harry Shearer suggests that Colin Powell would make a good Gulf Coast Recovery Czar under and Obama administration. The idea would be that Powell could redeem himself for lying us into the Iraq War by helping to get New Orleans back on track. General Powell could do this, I suppose, because his overflowing gravitas on both sides of the aisle would re-legitimize our plight in Congress while his national name recognition could help us win back the sympathies of our nation.

But I don't think it works like that. I don't think the Gulf Coast Recovery Czar can ever do anything truly productive because it's a just coordinator position. The way it is set up now (correct me if I'm wrong), the role of Recovery Czar is to make sure different federal, state, and city agencies are working together and to report back to the President. That's not much power. That's not much authority.

I don't think Colin Powell wants to be a hall monitor.

On the other hand, if you give Powell or whoever else the power of an agency, the power of a budget, the power to distribute grant monies - politicians understand the power of the purse.

How about scrapping the Gulf Coast Recovery Czar altogether and instead making our city and region's recovery a top priority for the Department of Urban Policy?

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.

MUST LISTEN - A Rare Crossover Event

You must must must listen to this NPR report on housing and hurricane preparedness. Why are so many people living in formaldehyde-contaminated trailers? Why isn't there adequate permanent housing? What would the temporary housing situation be in the event of a Hurricane today?

"this is life and death"

It stars two agencies I talk about a lot, this time in the same episode. It's like when the cops of Homicide: Life on the Streets went and did some investigating with the Law and Order guys.

The only difference is that on those fictional shows the cops were solving murders, while in this real life situation, government agencies are committing them.

h/t: Karen