Corruption in the launching of the Rental Assistance Demonstration Program (RAD)?

Corruption in the launching of the Rental Assistance Demonstration Program (RAD)?

By Lynda Carson - June 12, 2014

The attack against San Francisco's poor, elderly and disabled public housing tenants have intensified recently with the plan of Mayor Ed Lee, and the Department of Housing and Urban Development's (HUD) plan to privatize and sell many of San Francisco's public housing buildings through the Rental Assistance Demonstration Program, known as RAD. Additionally, around 200 hundred public housing employees also face the risk of losing their jobs as a direct result of RAD being implemented in San Francisco.

According to a recent article in the San Francisco Bay View Newspaper, the following list of public housing properties in San Francisco are scheduled to be privatized under RAD including, 25 Sanchez, 462 Duboce, 255 Woodside Ave., 3850 18th St., Mission Dolores, 1855 18th St., Robert Pitts, Westside Courts, 1880 Pine St., 345 Arguello, 491 31st Ave., 1760 Bush, Kennedy Towers, 2451 Sacramento and 2698 California, 939 Eddy, 951 Eddy, 1750 McAllister, Rosa Parks, Hunters Point East-West, Westbrook, 666 Ellis, 430 Turk, 350 Ellis, 320 and 330 Clementina, Holly Courts, Alemany, 227 Bay St., 990 Pacific Ave., Ping Yuen and Ping Yuen North. Additionally, Hunters View, 112 Middle Point and 227 West Point, Bernal Dwellings, Hayes Valley North, Hayes Valley South, Plaza East and North Beach Place.

Meanwhile, there may have been corruption in the launching of the RAD program that is being operated by HUD, and the possible corruption has gained the attention of the Office of the Inspector General (OIG). It appears that in it's haste to launch RAD against the poor public housing residents of San Francisco and public housing residents all across the nation, HUD may have been in violation of federal law, and may have violated the Antideficiency Act (ADA).

Documentation in a May 30, 2014 Memorandum from the Office of Inspector General (OIG) claims that HUD "incorrectly" used funds from the Office of Public and Indian Housing (PIH) including the Office of Housing, to pay $622,369 in salary and benefits to a former senior advisor to HUD Secretary Shaun Donovan.

Patrick Costigan who was on loan to HUD from a so-called nonprofit organization called "The Community Builders" (TCB), was on leave since January 2011 through part of 2014 from TCB. While he was with HUD as a senior advisor to Secretary Donovan, Costigan led the launch of HUD's Rental Assistance Demonstration Program (RAD) for HUD, that threatens to displace tens of thousands of public housing residents all across the nation from their housing. Costigan is presently back with TCB after three years with HUD. TCB is a major developer of so-called mixed income housing projects and Costigan has recently been named the Senior Vice President of Strategic Initiatives for the company, after his three year stint with HUD. TCB owns or manages 10,000 apartments in 14 states, including Washington, D.C., according to reports.

Agreement For The Senior Advisor's Services To HUD Secretary Donovan

The Intergovernmental Personnel Act (IPA) agreements allow HUD to enter an agreement with a person's employer, and cost-sharing arrangements for the IPA are negotiated between the participating organizations. Non-Federal employees on detail to Federal agencies remain employees of their permanent organizations for most purposes, and the employee is expected to return to the employer at the end of the agreement.

According to the May 30, 2014 "OIG" Memorandum, HUD reimbursed TCB for the senior advisor's services to the HUD Secretary from the Office of Public and Indian Housing (PIH) including the Office of Housing, to pay $622,369 in salary and benefits. However, due to a federal 2011 spending law, for the sake of transparency Congress directed HUD to pay all senior and special advisors to the HUD Secretary from the Office of the Secretary's budget. Additionally, $2,365 in funds was overpaid by HUD, according to the memo.

The OIG memo claims that HUD "may" have violated the Antideficiency Act (ADA) by paying TCB from the wrong coffers. In the memo it states, "according to a July 26, 2010 House of Representatives report, ''...all senior advisors to the Secretary should be funded directly through the Office of the Secretary. In addition, a HUD appropriations attorney wrote in a January 13, 2011, email that a special advisor to the Office of the Secretary would need to be paid by that office and not another office within HUD."

HUD failed to follow the direction given to it in the House report including the guidance provided by it's own appropriations attorney, and instead had reimbursed TCB for the senior advisor's services from the wrong coffers, namely PIH and the Office of Housing funds. As a direct result, HUD "may" have violated the Antideficiency Act (ADA).

According to the OIG memo, federal employees who violate the ADA are subject to two types of sanctions: administrative and penal. Employees may be subject to appropriate administrative discipline, including when circumstances warrant, suspension from duty without pay or removal from office. Additionally, employees may be subject to fines, imprisonment or both.

Results of the overview by OIG reveal that HUD may have spent more than $620,000 for a senior advisor in violation of ADA requirements, because HUD did not use the Office of the Secretary's executive direction account for these reimbursements.

In conclusion, according to the OIG memo, "The General Deputy Assistant for Public and Indian Housing and Acting General Assistant Secretary for Housing may have caused ADA violations totaling more than $620,000 when they approved payments for invoices for a senior advisor to the Secretary. HUD did not follow the necessary guidance during the agreement process to ensure that it reimbursed the employer from the correct personnel services account and paid the allowed salary amount. As a result, HUD may have violated the ADA each time it paid amounts from the incorrect personnel compensation account, paid more than the maximum amount under the agreement, and did not have an effective agreement in place."

To the tens of thousands of public housing residents being terrified by the prospect of being displaced from their long-time public housing units due to the implementation of RAD by HUD, and the efforts of Patrick Costigan an employe of TCB, the following news above may not make much of a difference to their situation.

However, the above information may help to better inform our nation's public housing residents who is actually behind the implementation of the RAD program that is rapidly privatizing, and selling off our nation's public housing units to the so-called non profit affordable housing developers, and for profit so-called affordable housing developers.

Additionally, the above information may enlighten the public about the payments that were made to cover the salary and benefits of the senior advisor to HUD Secretary Donovan during the launch of the RAD program, that may have been in violation of the Antideficiency Act (ADA).

Lynda Carson may be reached at tenantsrule [at] yahoo.com

Click here for the May 30, 2014 OIG Memo: http://tinyurl.com/llk93bt

Click here for background of the Antideficiency Act: http://tinyurl.com/qct8r6c