HUD Secretary Jackson Announces Resignation

By Carol D. Leonnig
Washington Post Staff Writer
Monday, March 31, 2008 12:00 PM

Housing and Urban Development Secretary Alphonso Jackson announced his resignation today, citing "personal and family matters." He has come under pressure from Congress for his refusal to answer questions about a federal lawsuit and whether he tried to steer land to a business friend.

In a letter to President Bush, Jackson, 62, said he is stepping down effective April 18 and would "fully assist in the orderly transition of the leadership at HUD."

He added: "There are times when one must attend more diligently to personal and family matters. Now is such a time for me." He made no mention of the controversies that have cast a pall over his agency at a time of crisis in the nation's housing industry.

Bush, who departed today on a trip to Ukraine, Romania, Croatia and Russia, issued a written statement calling Jackson "a great American success story" who rose from humble beginnings to become HUD secretary.

"I have known Alphonso Jackson for many years, and I have known him to be a strong leader and a good man," Bush said. "I have accepted his resignation with regret."

Bush said Jackson "made significant progress in transforming public housing, revitalizing and modernizing the Federal Housing Administration, increasing affordable housing, rebuilding the Gulf Coast, decreasing homelessness, and increasing minority homeownership."

According to two government sources who work on housing issues, Jackson was called last Monday to the White House, where top Bush administration aides discussed his ability to continue to lead the agency. The sources requested anonymity because of the sensitivity of the subject.

That meeting came three days after two senior Senate Democrats called on Bush to oust Jackson. Sens. Patty Murray (Wash.) and Christopher J. Dodd (Conn.) advised the president that his secretary's refusal to answer lawmakers' questions made him unable to lead the $35 billion agency. A White House spokesman replied that Bush continued to have confidence in Jackson.

Earlier this month, Dodd, Murray and other senators questioned Jackson closely about a federal lawsuit that accused him of using his public office to punish the Philadelphia Housing Authority after it refused to transfer a valuable property to one of the secretary's business friends. Jackson refused in two Senate hearings to discuss his role in the matter.

The lawsuit alleges that Jackson, in a call to Philadelphia's mayor in late 2006, demanded that the authority turn over the $2 million property to developer Kenny Gamble. Jackson's top assistant secretaries insisted in numerous letters and calls in 2007 that, if Philadelphia didn't give the property to Gamble, the housing authority would be found in violation of a federal contract. The housing authority's director, Carl R. Greene, repeatedly refused.

In December 2007, the Department of Housing and Urban Development found the city agency in violation of a much larger agreement that would cost it $50 million in federal funds. That prompted the authority to sue HUD and Jackson.

A series of internal HUD e-mails produced in the lawsuit, and first reported by The Washington Post this month, ratcheted up concern in Congress that HUD had sought to retaliate against Greene and the Philadelphia agency.

In a January 2007 exchange of e-mails, assistant secretaries Kim Kendrick and Orlando J. Cabrera discussed how they could make Greene "less happy." Kendrick asked if they could "take all of his federal dollars away."

Cabrera, who left HUD earlier this year, said in an interview that the discussion was not related to the property that Gamble sought. He said it was a conversation reflecting frustration with Greene's perceived lack of cooperation in HUD's review of its accessible housing.

On Thursday, a federal judge overseeing the Philadelphia authority's lawsuit said there was clear evidence of HUD bias against Greene, but it wasn't clear exactly to what it was related. He said he would rule soon about what he could do regarding HUD's actions and future depositions. He had previously said housing authority lawyers could not question Jackson.

Jackson is also the target of investigations by a federal grand jury, the FBI and the Justice Department. Those investigations began after a speech in Dallas in April 2006, in which Jackson said he had arranged the firing of a contractor who told him, "I don't like President Bush."

The secretary later said he concocted the anecdote, and HUD's inspector general concluded that Jackson had not exercised improper influence over contracts. But the continuing probes are looking at whether Jackson was truthful when he told a Senate committee last May, "I don't touch contracts."

One issue of interest to investigators is whether Jackson intervened in the business of the New Orleans and Virgin Islands housing authorities to steer work to friends. One source briefed on the probe said the investigators have been working to get a key former HUD employee to cooperate in providing information about Jackson's role.

Jackson came to Washington with the Bush administration. He was first appointed deputy secretary of HUD, and was promoted in December 2003 after Mel Martinez left the agency to run for the Senate from Florida; Jackson was confirmed by the Senate in March 2004. Jackson previously worked for a Texas power company and had spent more than a decade directing public housing authorities in the District, Dallas and St. Louis.

Staff writers Dan Eggen and William Branigin contributed to this report.

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