Friday, December 22, 2006

Another Connecticut Department of Mismanagement

CONNECTICUT NEWS
Authority's Mistakes Continued After Audit
December 22, 2006
By JEFFREY B. COHEN, Hartford Courant Staff Writer

The Hartford Housing Authority continued using federal funds improperly for almost a year after officials told the agency to stop, racking up an additional $800,000 in debt the troubled authority now must repay.

An audit by the federal Department of Housing and Urban Development released in September 2005 found that the housing authority improperly used more than $1.6 million in federal public housing money to pay for state public housing projects at the deteriorating Bowles Park and Westbrook Village.

But now federal and housing authority officials say the practice didn't stop until August 2006.

The authority has spent the past four months beset by allegations of corruption, mismanagement, lawsuits and federal investigations. Events culminated last month when Mayor Eddie A. Perez replaced four of the board's five commissioners, calling for a clean slate.

Regarding the audit, former board members said this week that former executive director Lancelot Gordon Jr. led them to believe the issue had been taken care of by January and that they were upset to learn from an outside consultant in August - after Gordon's dismissal - that it hadn't been.

Craig Dickinson, Gordon's attorney, said that Gordon, too, thought the process had stopped. Gordon told staff members to stop the payments, but they didn't follow through, Dickinson said.

Victor Rush, the authority's associate deputy director of administration, said Gordon never issued such an order.

"I never received a directive from Mr. Gordon to totally stop," Rush said.

Regardless of where the blame falls, the situation sheds more light on the troubled management of the authority under its former leadership.

It also puts back into focus the dire financial situation at Bowles Park and Westbrook Village - the two state-financed housing complexes that get little to no state aid to keep open, that have increasingly fewer tenants to pay rent, and need an interim plan while their long-term future is up for discussion.

"This is probably one of the single biggest issues we're going to have to deal with immediately," new board Chairman Mark Ojakian said. "What do we do with these units? You can't keep having the housing units without the money to sustain them."

Going forward, there will be limited funds for repairs at Westbrook and Bowles. That means that only those tenants who have units in need of repairs that qualify as health and safety concerns will have their problems addressed, Ojakian said.

He also said the state has just finalized a $250,000 loan to the authority to allow it to start fixing the 158 vacant units at Westbrook Village so that they can be rented and start generating revenue.

The problems at the authority exploded in August, when the board dismissed Gordon for failing to follow agency policies in nearly $11,000 worth of financial transactions. Gordon filed a federal lawsuit after his termination, denying the charges and claiming that he was fired because he was trying to resist deep-rooted corruption. Local, state and federal officials are still investigating.

In November, Perez appointed four new board members after he removed four others - three of whom he said inadequately addressed the concerns of federal audits, among other things.

On Wednesday, the new board decided to deal with the unfinished business of the HUD audit and pay the federal government $800,000 immediately, and about $140,000 a month until the debt is settled.

The money will come from proceeds the authority gets from sales of homes at Charter Oak Terrace and Stowe Village, as well as the lease payments it gets from its retail tenants at Charter Oak Marketplace, Ojakian said.

"Everybody worked really hard to get this done," Ojakian said of resolving the audit. "I think now the message is, `We're not going to tolerate any sort of inappropriate handling of funds.'"

Ojakian said this week he is reviewing the applications of people who want to be the agency's next executive director, but that he is also considering scrapping the search and starting over.

"I don't know if [the job] was advertised broadly enough," Ojakian said. He is also not confident that there was enough "outreach to other states or other people who might know of extremely qualified candidates."

Contact Jeffrey B. Cohen at jcohen@courant.com.

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