HUD Chief Accused of Retaliation

Kenny Gamble's urban-development firm is at the center of the dispute.
Kenny Gamble's urban-development firm is at the center of the dispute. (H. Rumph Jr. - Associated Press)
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By Carol D. Leonnig
Washington Post Staff Writer
Monday, February 4, 2008

Housing Secretary Alphonso Jackson demanded that the Philadelphia Housing Authority transfer a $2 million public property to a developer at a substantial discount, then retaliated against the housing authority when it refused to do so, a recent court filing alleges.

The authority's director, Carl Greene, contends in a court affidavit that Jackson called Philadelphia's mayor in 2006 to demand the transfer to the developer, Kenny Gamble, a former soul-music songwriter who is a business friend of Jackson's. Jackson's aides followed up with "menacing" threats about the property and other housing programs in at least a dozen letters and phone calls over an 11-month period, Greene said in an interview.

Greene and his colleagues have alleged in the court filing that Philadelphia is now paying a severe price for disobeying a Bush Cabinet official. The Department of Housing and Urban Development recently vowed to strip the city's housing authority of its ability to spend some federal funds, a move that the authority said could raise rents for most of its 84,000 low-income tenants and force the layoffs of 250 people.

The housing authority responded by filing a civil suit in December against HUD and Jackson, in which Greene claimed that the actions by Jackson's department are "retaliatory" and that the Bush administration has exaggerated the troubles it cited as grounds for stripping the funds. Greene said the developer failed to deliver on contracts, leading the housing agency to conclude that the transfer would be improper.

"The secretary was determined that we turn over this land to this specific developer," Greene said in an interview. "I refused. . . . He didn't have the ability to remove me. So he resorted to these extraordinary measures to extract what he wanted." The allegations regarding Jackson's role have not previously been reported.

At the heart of the matter is a dispute over the contract performance of Gamble, a local music legend who helped write such famous 1970s soul tunes as "Love Train" and "Me and Mrs. Jones" before founding a real estate firm to redevelop the downtrodden city neighborhoods where he spent his youth. In 2000, he spoke about self-reliance at the Republican National Convention. He has not contributed to the Republican Party, but he and his company have donated regularly to the state's GOP senator, Arlen Specter, records show.

Jackson, a longtime friend of President Bush, is under investigation by HUD's inspector general and the Justice Department for other alleged acts of favoritism and interference. Jackson's office last week said in a written statement that he could not comment on Greene's allegations because they are a subject of litigation.

According to people familiar with the existing probes of Jackson, investigators are scrutinizing whether he interfered in the operations of housing authorities in New Orleans and the Virgin Islands by helping steer no-bid and inflated contracts to friends, and whether he lied when he told authorities he had not.

Investigators are also examining Jackson's alleged role in arranging a New Orleans Housing Authority contract for a contractor and occasional golfing buddy who allegedly did repairs and remodeling on the secretary's South Carolina vacation home, according to two sources familiar with the probe. Details of these probes were previously reported by the National Journal.

Two senior HUD officials for public housing, Deputy Assistant Secretary Dominique Blom and Associate General Counsel John Herold, said last week that they were not familiar with all of Greene's allegations. But they said they had seen no evidence of a connection between his refusal to transfer the property to Jackson's friend and HUD's finding that Philadelphia had violated federal housing regulations.

Jackson, who ran the District's housing authority in the 1980s, joined HUD as a deputy secretary in 2001 and was named secretary of the $35 billion agency in 2004. He attracted attention in 2006 when he bragged in a speech in Dallas that he had arranged the firing of a contractor who criticized Bush. He later said he concocted the anecdote, and HUD's inspector general concluded that Jackson had not exercised improper influence over contracts.

The dispute between Jackson and the Philadelphia Housing Authority revolves around a city-led revitalization of the once-blighted Martin Luther King Jr. housing project in South Philadelphia. In 1999, Universal Community Homes, a nonprofit urban-development company founded by Gamble, and a for-profit developer, Pennrose Properties, won the first of a series of contracts from the city to develop 236 affordable, below-market units and provide key marketing and counseling services to incoming residents.

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