D.C. Mayor Walter E. Washington yesterday revoked the Department of Human Resources' 16-month-old autonomous leasing authority under which that agency negotiated a controversial rental agreement now being investigated by the U.S. Attorney's Office here.
DHR's leasing powers were returned to the Department of General Services, which handles all major leasing, contracting and construction services for all other city agencies. It formerly handled those functions for DHR, and will resume that responsibility immediately.
Under terms of an executive order issued by the major, DHR no longer will have the authority to acquire or lease property or to contract for architectural, engineering or construction services.
The mayor also directed the Office of Budget and Management Systems to review all minor procurement and contracting authority currently held by District government departments to determine whether those functions could be administered more efficiently and economically under a centralized system administered by General Services.
Questions about DHR's leasing practices were first raised last November following disclosure in The Washington Post that the city had signed a 20-year, $5.6 million lease to rent a vacant two-story office building at 60 Florida Ave. NE.
The building, which had just been purchased by millionaire developer and parking lot magnate Dominic F. Antonelli Jr. for $800,000, was the first property rented by DHR after that agency was given leasing authority by the major in December, 1975. General Services earlier had refused to lease the building, concluding that the terms were too expensive.
Joseph P. Yeldell, then DHR's director, had asked the mayor to grant the department leasing authority after complaining that the Department of General Services took too long and charged too much to perform contracting and leasing services for his agency.
Leasing the Florida Avenue property was one of several actions taken by Yeldell as DHR director that benefied Antonelli financially, according to articles first published in The Post. The U.S. Attorney's Office here currently is investigating financial ties between Yeldell and Antonelli to determine whether Yeldell's decisions were influenced by $54,500 in loans that he has disclosed that Antonelli helped arrange for him.
Yeldell has said the loans did not place him in a conflict of interest situation becuase he never had personally negotiated his department's leases. Antonelli has refused to discuss the matter.
Earlier this month, Mayor Washington transferred Yeldell to a post as one of his aides after several investigations into alleged nepotism, cronyism and leading abuses failed to turn up any hard evidence of wrong-doing by Yeldell. Yeldell's salary is his new job is $47,000 a year, the amount he was paid as DHR director.
Mayor Washington said yesterday that rescinding DHR's autonomous leasing and major contracting power endoresed a recommendation in a report by the city's Office of Municipal Audits and Inspections, which conducted its own investigation into DHR's leasing practices.
David Legge, director of that office, said yesterday that the mayor also had received a memoradum from acting DHR chief Albert P. Russo saying that he was agreeable to returning the agency's leasing powers to General Services.
Legge said DHR would retain the authority to negotiate contracts for day care, community treatment and other care centers. It has had that authority since June, 1974.
The department's procurement authority, according to the mayor's order, will be the same as that held by most District agencies except that it will be allowed to make purchases only on a small scale.
"It is our goal to bring about the most efficient and economical procurement, contracting and supply system for the city while at the same time continuing to meet the individual and special needs of the departments to carry out their functions," Washington said in a statement.
Several other District agencies have varying degrees of independent authority for procurement and contracting. These include the Departments of Transportation. Environmental Services, Housing and Community Development, Corrections and Recreation, as well as the Board of Education and the new University of the District of Columbia.
Earlier this week, the House District Appropriations Subcommittee questioned the allocation of $1.4 million to DHR to carry out its leasing authority and announced it would investigate the agency's leasing practices. Legge said yesterday that he expected that money would now be reallocated for other uses.