Sen. William Proxmire (D-Wis.) yesterday called upon the General Accounting Office to investigate allegations that the Department of Housing and Urban Development allowed P.I. Properties to steal money from the government and low-income tenants at the HUD-financed Clifton Terrace apartments.
"I would like to know, particularly, why it took HUD a full 15 months after an unsatisfactory audit by its inspector general to take back a project on which only four monthly mortgage payments had been made in three years," Proxmire wrote Elmer B. Staats, head of he GAO, Congress' investigative arm.
At the same time, Proxmire's office said yesterday that he will hold subcommittee hearings himself on the same matter within a few weeks.
He is expected to summon to HUD inspector general, as well as HUD "whistleblowers whose whistles didn't get heard," according to Howard Shuman, Proxmire's administrative aide.
Proxmire is chairman of the Senate appropriations subcommittee that has jurisdiction over HUD's budget.
The Washington Post reported in a series of articles last week how officials of P.I. Properties -- a real estate spinoff of Youth Pride, Inc., a black, self-help group -- ignored mortgage payments, utility bills and tenants' complaints while diverting, misappropriating and stealing at least $600,000 from the government and the tenants between 1974 and 1978.
The Post reported that HUD allowed P.I. to continue owning and managing the 285-unit project at 14th and Clifton Streets despite early warnings from HUD officials that the project was "heading for disaster," despite the conclusion of one HUD auditor that P.I. was "milking" the government, and despite the discovery by other auditors that months of P.I. financial records were missing.
The Post identified the P.I. officials involved in the theft as P.I. executive director Mary Treadwell; general manager Robert E. Lee Jr.; and Joan M. Booth, Treadwell's sister and the project manager at Clifton Terrace. All have either denied any wrongdoing or declined comment.
"I find it shocking that HUD continued to provide financial assistance to the project despite that fact that required audits could not be conducted because, as one HUD investigator said, 'How can we investigate records that weren't there?'" Proxmire said yesterday in a speech on the Senate floor.
"And I find it depressing to read that aid was continued despite recommendations of staff to terminate the project -- apparently because top HUD official failed to respond or didn't care to take decisive action.
"I find it incredible that so many could be intimidated for so long by so few, and that from the very beginning 'deep interest' by top HUD officials in the project shielded it from objective evaluation and sound management practices."
The Post reported that the thefts continued in part because Treadwell intimidated some HUD officials with accusations of racism, and cowed others by invoking her friendship with former HUD secretary Patricia Roberts Harris.
P.I. Properities acquired the HUD owned Clifton Terrace complex in April 1974 as the result of a unique, no down payment deal privately worked out between Treadwell and then HUD assistant secretary for housing H.R. Crawford. HUD foreclosed on P.I. in august of 1978.
"What is particularly distressing about Clifton Terrace is that it happened right here in Washington, right under the eyes of not one but three different HUD secretaries," Proxmire told the Senate yesterday. "It happened in a project you can almost see from the HUD building."