It was a little war that brought down a giant. A bitter dispute between the Philadelphia Housing Authority and the U.S. Department of Housing and Urban Development over the completion of the award-winning Martin Luther King Plaza mixed-income development in South Philadelphia was arguably the final straw in the mounting political pressure that led to the April 18th resignation of former HUD Secretary Alphonso Jackson.
The clash began in 2006 when Carl R. Greene, PHA's executive director, refused to transfer valuable parcels of land at the MLK site for nominal consideration to Universal Cos. Famed songwriter and entertainer Kenny Gamble, a friend of Jackson's and a Republican Party supporter, is a principal of the Philadelphia-based development firm. When Greene refused to participate in the land deal, Greene says HUD retaliated against PHA by threatening to withhold federal funds.
"Jackson lost his way and his commitment [to affordable housing]," says Greene, who worked amicably with Jackson in the late '80s and early '90s at the District of Columbia Housing Authority. "He broke every business rule to keep his allegiance of social elites happy. He had a total collapse of his sense of morality and judgment. People are losing their houses everyday while he is riding around with a full security detail and chefs and jets, living the life of a king. Hopefully he is the last king of HUD."
HUD spokesperson Donna White says that the agency cannot comment on the accusations "because the matter is in litigation." As a result, Greene is the only one talking. But the story he tells — supported by a compelling paper trail and an affordable housing industry ready to voice its ire — offers a window into a federal agency riddled with accusations of cronyism and harsh criticisms for its failure to deliver decent, affordable housing to thousands of people.
PHA's claim, amid ongoing accusations of favoritism during the last two years of Jackson's tenure, led Senators Chris Dodd (D-Conn.) and Patty Murray (D-Wash.) to call for the Secretary's resignation in March. In a March 31, 2008, statement, Dodd questioned the former Secretary's ability to effectively run HUD "while under the cloud of various investigations into alleged impropriety." Jackson announced his resignation that same day. Now, the FBI and the Justice Department are investigating these claims, which extend to and impact housing agencies across the country.
A number of housing authority directors say HUD's alleged retaliation against PHA is certainly believable. "HUD likes housing authorities that kneel down and pay them homage," says one director, who requested anonymity in fear of retribution. "They like people who play their game the way they want to play it. To a certain extent it's a game to them. We have peoples' lives at stake, and they are buying oil paintings." The director is referring to a $100,000 contract awarded by HUD to an artist to complete portraits of Jackson and four former HUD secretaries.
Perhaps the most convincing evidence of HUD's alleged impropriety: In a Jan. 12, 2007, e-mail exchange, then-Assistant Secretary Orlando Cabrera asked current Assistant Secretary Kim Kendrick, "Would you like me to make his [Greene's] life less happy? If so, how?" To which Kendrick replied, "Take away all his federal dollars?" ending her message with a smiley icon. Cabrera responded, "Let me look into that possibility."
That same day, HUD sent PHA a letter stating that the authority was noncompliant with HUD Section 504 regulations, which mandate that at least 5 percent of public housing units be accessible to people with disabilities — an allegation that Greene vehemently denies. As a result of being noncompliant with this accessibility rule, HUD can revoke PHA's participation in Moving to Work (MTW), a program that gives a select number of public housing agencies and the Secretary of HUD the flexibility to design and test various approaches for providing and administering housing assistance. Specifically, MTW gives housing authorities such as PHA considerable flexibility in determining how to use federal funds. PHA estimates that losing its MTW status would cost the authority at least $40 million in funding, adding that the MLK project would not have been possible without the financial flexibility the program provides.
At a Senate committee hearing (audio / video) in March, Jackson defended the e-mails by saying his staff was "frustrated" with the situation. Though Jackson stepped down from office just a few weeks later, the battle between HUD and PHA continues to this day and has created a growing acrimony symbolic of the general disdain felt for HUD by many in the affordable housing industry.