NCPA - National Center for Policy Analysis

H.U.D.'s "Community Builders" Cost Taxpayers Millions

October 20, 1999

Hundreds of so-called community builders -- who act as liaisons between the Department of Housing and Urban Development and state and local officials -- have wasted millions of taxpayers' dollars through political interference in defaulted housing sales. That is the conclusion of an investigation by a H.U.D. inspector general.

In addition, they improperly helped federally-subsidized property owners avoid H.U.D. regulations and engaged in political lobbying to increase federal spending on H.U.D. programs. An unidentified H.U.D. official explained that recruits for the program were seen as "Democratic ward-heelers who act as a pipeline between Democratic city officials, party leaders and the administration and the DNC (Democratic National Committee)."

  • The investigation found that Elizabeth Julian, H.U.D.'s senior community-builder official in Fort Worth, "intervened and placed inappropriate pressure on multi-family housing officials" in the sale of a defaulted federally-insured apartment complex in Dallas -- causing the agency to lose its $17 million investment when the property was sold for just $10.
  • H.U.D. incurred an additional $1.7 million in holding costs because of her interference on behalf of tenants to delay the sale.
  • H.U.D.'s community builder representative in St. Louis violated regulations to delay the sale of two defaulted properties -- causing the government to lose $2.8 million in prolonged maintenance costs and sale proceeds.

H.U.D. Secretary Andrew Cuomo had announced the community-builder program with great fanfare in June 1997, observers report. He claimed then that the agency needed a staff separate from its regulatory officials to provide "front line" customer service in nation's cities.

Source: George Archibald, "H.U.D. Investigation Finds Wasted Cash," Washington Times, October 20, 1999.

 

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