HUD probe heats up

During an investigation of his conduct last year, Alphonso Jackson, federal housing secretary, defiantly defended his dealings with federal contractors doing business with the department.

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Jackson survived that investigation, but now faces a new one stemming from the same forceful style that got him in trouble the first time.

The FBI and the department’s internal watchdog are examining Jackson’s ties to a friend who was paid at least $392,000 in federal money after Jackson passed along the man’s name for a job as post- Katrina construction manager at the Housing Authority of New Orleans.

Jackson, 62, has spent much of his career working for housing agencies in several cities. He has a personal friendship with Bush that dates to the late 1980s, when they lived in the same Dallas neighborhood.

The White House issued a statement saying the president supports Jackson.

Jackson was the first black leader of the housing authority in Dallas, where his integration efforts caused clashes with some local homeowners in predominantly white neighborhoods. “They don’t want people of color out there. It’s simple,” Jackson told a reporter.

Jackson triggered the inquiry last year by the Housing and Urban Development Department’s inspector general when he told a minority group of commercial real estate executives in Dallas that he had revoked a contract because the applicant who thanked him said he did not like Bush.

He said, “I have a problem with your president,” Jackson told the crowd. “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.’ He didn’t get the contract.”

Jackson later told investigators “I lied” when he made the remark about taking back the contract–the only part of a lengthy interview where he was contrite.

The inspector general, after a four-month inquiry, turned up no evidence of a canceled contract.

Yet the report found what it called “some problematic instances” involving HUD contracts and grants, including Jackson’s opposition to money for a contractor whose executives donated exclusively to Democratic candidates.

Given the periodic corruption scandals over the housing department’s 42-year history, Jackson’s contacts with individual contractors have troubled department lawyers, last year’s investigation showed.

In his interview with HUD investigators on July 24, 2006, Jackson grew combative, saying HUD employees had grown too close to companies the agency is doing business with.

“Well, you know something?” said Jackson. “The staff basically gets involved with these companies.”

Jackson said “this has been a problem in the agency” and “I can tell you that one of the problems we have is that many of the people who service these contracts eventually go to work with many of these contractors who are doing business with us.”

In the question of possible favoritism, the department’s former acting general counsel told investigators that Jackson’s meetings with contractors were a matter of concern dating to the first term of the Bush administration, when Jackson held the No. 2 post at the department.

Former HUD acting general counsel Kathleen Koch told investigators her staff used to review the appointments schedule for Jackson’s predecessor, Mel Martinez, to advise if there were potential problems involving contractors. Potential HUD contractors would be kept away from Martinez, said Koch.

The schedule reviews “just petered out” after Jackson became secretary, Koch said, telling investigators that Jackson would meet with contractors or people who wanted to obtain contracts at HUD. “We warned him against it,” she said.

Jackson told investigators, “I have not advocated for anybody,” but said he simply explained to people who want to do business with HUD that they must get on a list of approved contractors before they can get work from the department.

The report made clear that during his nearly seven years at HUD he has had friction with individual contractors who have long been doing business with the agency.

The most detailed illustration of friction was a $4 million HUD grant awarded to Abt Associates Inc., a Cambridge, Mass., company. The inspector general’s investigators found over $33,000 in donations from Abt to political action committees of Democrats, none to Republicans.

After deciding in early 2006 to award the work to Abt, the department finally sent out award letters three months later.

The inspector general found that the Abt award was “blocked for a significant period of time due to Jackson’s involvement and opposition.”

In his interview with investigators, Jackson denied interfering. “I never held it up, period,” Jackson said.

He blamed his aides for the delay.

He said he had problems with Abt over past poor performance. But he insisted nine times during the interview that it couldn’t have been more than three days between the time that he ordered an assistant HUD secretary to look into whether Abt should get the work and the time that he approved the award.

“I have to smile,” said Jackson. “These people take so long doing everything and if they want to use somebody as a convenient scapegoat they do.”

Several HUD aides disputed his account.

Chief of staff Camille Pierce told investigators that Jackson “sees red when he sees a contract to Abt.”

Pierce recalled that Pamela Patenaude, an assistant HUD secretary, “was about to sign this contract” with Abt. When Pierce and Patenaude went to Jackson, “he said, definitely, I do not want Abt to get this contract,” Pierce said.

“Pam would always come back to my office and she’d be frustrated and say I just don’t know what to do,” Pierce testified. The grant went forward only after HUD’s No. 2 official, Roy Bernardi, intervened with Jackson.

Copyright 2007 The Associated Press. All rights reserved.