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HUD Secretary Awarded Contracts Awarded on Political Leanings
Dallas Business Journal
by Christine Perez
September 21, 2006

Top aides to Housing Secretary Alphonso Jackson testified that they and other senior staff members were advised to take political leanings into consideration when awarding discretionary contracts, according to an internal report issued by the Department of Housing and Urban Development's inspector general.

Despite Jackson's edict, there is no evidence that "information regarding political affiliation was routinely or generally received, maintained or applied to the contracting process; however, there were some limited instances where political affiliation may have been a factor in contract issues involving Jackson," the report found.

The findings led Rep. Henry A. Waxman, D-Calif., to call Thursday for Jackson's resignation.

"If this report is accurate, Secretary Jackson should resign immediately," Waxman said. "We must not allow taxpayer-funded contracts to be handed out to political allies as rewards for loyalty."

The inspector general's investigation was launched following an exclusive Dallas Business Journal report on comments Jackson made at an April 28 real estate gathering in Dallas. At the private event, Jackson, former president and CEO of the Dallas Housing Authority, told attendees he canceled a contract with a contractor who had criticized President Bush.

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

The secretary's comments set off a political firestorm, with several Democratic lawmakers calling for an investigation or Jackson's resignation, and with Jackson issuing a formal apology.

In an executive summary of the inspector general's report, investigators found that "the substance of the remarks by Secretary Jackson were partly true." Based on testimony by Jackson and others, such an encounter took place in the lobby of HUD headquarters between an African-American male and then-Deputy Secretary Jackson, and this incident formed the basis of the story Jackson relayed to attendees at the Dallas real estate event. However, the investigation found no evidence that a contract was canceled as a result, and the contractor in question said he had not been, or did not recall being, involved in the encounter, according to the summary report.

Jackson told investigators the contract-canceling part of his comments in Dallas were not true and were an exaggeration. "I lied and I regret having done that," he said.

In a statement commenting on the inspector general's findings, Jackson said, "As I stated previously, during my tenure, no contract has been canceled, rescinded, terminated, awarded or not awarded due to the personal or political benefits of the recipient."

Sen. Frank R. Lautenberg, D-N.J., was among the lawmakers that had pushed for a formal investigation. He said the HUD report raises more questions than it answers.

"Federal agencies are not ATM's for lining the pockets of the Bush Administration's political friends," he said. "The inspector general's report reveals disturbing conduct that needs to be reviewed by the Department of Justice."

According to the executive summary, Secretary Jackson's chief of staff identified other instances of the secretary personally intervening with contractors he did not like. "Reviews of political contributions indicated these contractors had Democratic political affiliations," the report said. "It could not be conclusively determined if Secretary Jackson's views on specific contractors resulted in a stoppage or decline in contract awards received by these contractors."

Michael Zerega, spokesman for HUD's inspector general, said his office will take no additional action on the matter.

"We delivered the report to the people who requested it and to officials," he said. "Our involvement has been accomplished."

The inspector general's office declined to release a copy of the full report to the Dallas Business Journal. The newspaper has filed a Freedom of Information Act request to obtain a copy.

cperez@bizjournals.com | 214-706-7120

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