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Pr. George's Audit Cites Lax Land-Deal Protocol

County Executive Jack B. Johnson, center, has denied involvement in land deals that favored friends. He is pictured during an unrelated news briefing this summer with county officials Gregory Harris, left, and Vernon Herron.
County Executive Jack B. Johnson, center, has denied involvement in land deals that favored friends. He is pictured during an unrelated news briefing this summer with county officials Gregory Harris, left, and Vernon Herron. (By Richard A. Lipski -- The Washington Post)
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By Cheryl W. Thompson and Mary Pat Flaherty
Washington Post Staff Writers
Saturday, August 30, 2008

Prince George's County officials have transferred millions of dollars worth of surplus land to developers without proper records or oversight, often failing to require competitive bids, good-faith deposits or accurate land appraisals, according to a report by the county auditor.

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The county's Redevelopment Authority also has lost or failed to deposit some checks from developers, County Auditor David Van Dyke said in his report. "Breakdowns in key internal control activities can leave the authority vulnerable to fraudulent, abusive or questionable real estate activity," he wrote.

The audit began after inquiries from The Washington Post to the county about surplus-land contracts. Last month, The Post detailed how county officials gave land deals to friends, business partners and campaign contributors of County Executive Jack B. Johnson (D), often passing up experienced developers. Johnson intervened in at least two of the transactions and several recipients acquired the land at cut-rate prices or got no-bid contracts, county and other records show.

The audited development deals often involved public property close to Metro sites and in neighborhoods targeted for economic growth. Developers promised to build such projects as single-family homes, townhouses and condominiums, but most of the sites remain vacant.

Johnson has denied involvement in the awarding of the deals and said the Redevelopment Authority operates independently. Yesterday, Johnson and his spokesman, James Keary, declined to discuss the audit's findings. Keary said in a statement that "the County Council and the County Executive have no role in those transactions or the decisions made by the Redevelopment Authority Board of Directors."

Thomas M. Thompson, who as director of Housing and Community Development oversaw the Redevelopment Authority, said he was aware of the audit but was fired June 27 by Johnson before he could meet with the auditors. "They wouldn't let me look at it or respond to it," Thompson said of the report.

In the past, Thompson defended his agency's procedures, saying, "I'm pretty proud of what we've done and the proposals we selected."

The report criticizes the authority for not providing adequate records to show that it enforced conditions in contracts and for continuing deals with developers who had not met contract terms. County officials also could not provide evidence that they evaluated the proposals before awarding contracts.

Auditors examined 25 contracts totaling 65 properties. Five of those contracts involved 17 properties, including three that went to people with ties to Johnson.

Fifty-seven percent of the properties reviewed were sold without a competitive bid process and 11 percent were under contract or sold without the approval of the authority's board, the audit found. County officials disputed that finding but failed to provide auditors with "satisfactory proof" of board approval.

The audit found "inadequate documentation" for how the developers' proposals were evaluated. The lack of proper records "reduces the amount of public transparency, making it difficult for the agency to maintain the respect, trust and confidence of potential developers as well as county citizens," the report says.

The authority also should seek competitive bids "to ensure the County is receiving the best value for the property," it advises.

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