Fallout from Johnson years still costing Prince George’s time and money

February 17, 2013

The U.S. Department of Housing and Urban Development has given Prince George’s County an April 5 deadline to devise a plan to return at least $1 million that investigators say was mismanaged in the federal HOME affordable housing program.

The money was allocated by the administration of County Executive Jack B. Johnson (D) from 2003 to 2008 to Kairos Development to build affordable housing in Temple Hills.

HUD is also asking the county to return $50,000 allocated to Omega Gold Development, which received $100,000 in federal funds during the Johnson administration, for operating expenses. Omega is trying to build housing in Suitland. Company officials did not return calls for comment.

The demands by HUD show how more than two years after Johnson was arrested in a bribery and corruption scheme centered in the county’s housing department, the scandal continues to reverberate in Prince George’s — and cost taxpayers.

Cleaning up the county’s housing department has been a top priority of Johnson’s successor, County Executive Rushern L. Baker III (D), whose administration was recently cited for making progress. An outside consultant hired by the county to track change at the $100 million housing agency recently gave it high marks for making fixes but said more work was ahead.

“The department has come a long way in correcting a very difficult, demanding situation,” John Kromer, a former Philadelphia housing director, told the County Council at a recent briefing.

Prince George’s Housing Director Eric C. Brown, who has spent much of his first two years in office trying to fix a host of problems at the agency, said he hoped to resolve the lingering disputes with HUD soon.

“It is like peeling back an onion,” he said. “We keep finding new problems.”

The county would like to repay the $1 million HUD is seeking from Kairos by selling the property, where no affordable housing was built. But there are potential stumbling blocks, Brown said. It is not clear who owns the property or what might happen to people who had been living there, he said.

“We told HUD we do not have a million dollars and if we could acquire and sell the land, would they accept that. We will either get that satisfied or find a way to make the [repayment] . . . as little as possible,” Brown said.

Kairos, founded by the Rev. Kerry A. Hill, a former Maryland Democratic delegate and pastor of New Chapel Baptist Church in Camp Springs, was cited in a 2011 Washington Post investigation as ill-equipped to build affordable housing. HUD’s regional inspector general later said the nonprofit group had mismanaged federal HOME affordable housing funds. Kairos officials did not respond to requests for comment.

Separately, HUD also recently concluded negotiations with the county over other HOME funds from the Johnson years. HUD officials initially said the Baker administration had failed to allocate about $2 million to eligible organizations and requested that it be returned.

But under the terms of the deal, the county will be allowed to retain $1.2 million. The remaining $800,000 will be deducted by HUD from future grants, Brown said.

The housing department was a key venue for Johnson’s corruption scheme, which landed him a seven-year prison sentence.

Some of the $28 million in the HOME affordable housing construction funds given to the county from HUD were used to make deals in which Johnson and then-housing chief James Johnson took bribes. In exchange, they approved development projects, including some that, according to the HUD inspector general, failed to meet basic federal standards for self-governance and oversight.

HUD spokesman Brian Sullivan said in an e-mail that the agency is still examining other programs, among them Roots of Mankind, a Prince George’s nonprofit group, that was supposed to rehabilitate 11 houses but did not. That organization had worked with Laurel physician Mirza H. Baig, who was convicted of bribery after paying Jack Johnson and James Johnson $400,000 to $1 million in bribes, according to federal prosecutors. He is in prison.

Officials from Roots of Mankind did not respond to requests for comment.

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