More HUD contracting problems brought to light

We've reported extensively here on allegations of cronyism and other problems with the Department of Housing and Urban Development's work in post-Katrina New Orleans -- problems that culminated in the resignation earlier this year of former HUD Secretary Alphonso Jackson, who remains under criminal investigation for his role in questionable contracts in New Orleans, Philadelphia and the Virgin Islands.

This weekend, the Washington Post disclosed new problems with HUD's operations. They appear to be related to the agency's efforts to boost contracts awarded to minority-owned companies while disregarding concerns about qualifications raised by longtime HUD contracting staff:

The contract awards that staff members questioned took place within programs, heavily promoted by Jackson, to help small, minority-owned businesses get a bigger share of the roughly $1 billion in public contracts HUD awards each year. During Jackson's tenure, the proportion of contracts awarded to small black- and Hispanic-owned businesses, including under the Section 8(a) program, rose from 6 percent to nearly 35 percent. The proportion of contracts open to full competition decreased from 71 percent to 33 percent, federal records show.

The paper's examination of HUD contracts found three firms that won hundreds of millions of dollars in contracts under Jackson while career contracting staff repeatedly raised concerns about their qualifications. The firms, all based in the South, are:

* Harrington, Moran and Barksdale Inc. (HMBI), an Arlington, Texas-based company that's led by two former Reagan administration officials and has close relations with senior Republican appointees at HUD. In 2004, the company -- which had previously managed only a handful of apartment buildings and development projects -- landed $71 million in HUD contracts overseeing the upkeep and sale of defaulted homes.

* National Housing Group, a Miami-based property management firm that's contributed generously to GOP campaigns, won $50 million in contracts from 2003 to 2007. Its second-highest executive has been indicted for allegedly falsifying reimbursement requests to HUD.

* Drayton, Drayton & Lamar of Georgia had received about $1 million in HUD business through 2002. But since 2003, it landed $35 million in data-technology and information-management contracts at HUD despite concerns about its performance. "Its president has socialized with a HUD official," the Post noted.

It also appears that HUD brass retaliated against lower-level employees who voiced objections to the deals. For example, when veteran agency contracting specialist Gloria Freeman repeatedly raised concerns about HMBI, she was transferred to a policy job and later retired. And when Ed Girovasi -- a 33-year HUD employee -- was asked to review an NHG claim for $8 million, he concluded the firm had exaggerated and actually owed HUD $250,000. He too was transferred to a policy position and later retired.