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D.C. Housing Authority in turmoil as HUD deadline approaches

DCHA leaders have kept discussions of the HUD review behind closed doors

Buildings that are part of the Langston Terrace Dwellings are reflected in the broken front-door glass of a vacant apartment unit in Northeast Washington. (Michael S. Williamson/The Washington Post)

As the beleaguered D.C. Housing Authority faces a Nov. 30 deadline to respond to a stinging federal report on its operations, internal governance problems flagged in the report have intensified at the agency, according to interviews and emails reviewed by The Washington Post.

This month, the authority’s Office of Audit and Compliance delivered an internal review accusing DCHA of illegal procurement. The authority’s top lawyer and chief operating officer were put on leave, then quickly reinstated. Its director has sought to discredit the internal review to the agency’s governing board. And the top auditor has accused the director of retaliating against her.

Meanwhile, time is running out for the agency to respond to dozens of findings issued by the U.S. Department of Housing and Urban Development on Sept. 30, and it has until the end of the year to make substantial progress in remedying them — or risk escalating actions by the federal government.

Discussions have occurred behind closed doors about how to respond to the HUD report, which found that inadequate management, poor oversight and faulty governance drove the authority’s failure to provide “decent, safe, and sanitary” housing for its residents, in violation of federal requirements. The board has cited a legal exemption for discussing investigations of misconduct to strategize in private with top staffers.

The majority of the board serves at the pleasure of D.C. Mayor Muriel E. Bowser (D), who met with HUD officials last month to discuss the report. She declined an interview request, but said in a statement that her administration was focused on supporting DCHA.

Members of the D.C. Council’s housing committee, which has oversight of the authority, disagree over whether the authority’s current leadership can steer the agency out of trouble.

Robert C. White Jr. (D-At Large) said the agency needs a new director and new leadership on the board. “Multiple times a week, we’re seeing high-level resignations, disputes within the agency, procurement problems,” White said. “We can’t tinker around the edges and hope that we’re going to fix anything here.”

But the committee’s chairwoman, Anita Bonds (D-At Large), said she has confidence in the agency’s ability to handle the HUD response. “I remain hopeful that [agency director Brenda Donald] can live up to her reputation as an organizational fixer in government.”

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The housing authority had been bracing for HUD’s report since late last year, when federal officials notified the agency of the coming review.

In its aftermath, Donald, who has directed DCHA for about 17 months, has reiterated what she’s been telling the board all year: She inherited problems from the previous administration, is working to correct them and can’t fix everything overnight.

She declined to be interviewed for this story, but answered some questions via email. Still unclear is how she plans to lead DCHA into HUD compliance, or whether the authority will dispute any of HUD’s findings. The report highlighted dangerous conditions at properties that form one of the last lines of defense for District residents who cannot afford homes, including violence, lead-paint hazards, out-of-code plumbing, water damage and mold.

The agency may dispute the report’s conclusions, but must then propose alternative action, according to HUD’s correspondence with DCHA, which stated that all corrective action must be completed within six months.

In 2020, DCHA’s then-top auditor, Joanne Wallington, told HUD that her office was under “an all-out attack” from agency leaders she said were engaged in gross mismanagement. “At this point, I don’t have confidence that the Board of Commissioners or other senior executives will exercise integrity in the performance of their public duties,” Wallington, who later resigned, wrote to HUD, according to emails obtained by The Post.

Now, Petuna Cooper, who replaced Wallington, is claiming similar retaliation against her and her half-dozen staffers after the office recently issued three internal audits deeply critical of agency procurements. HUD evaluators looked at about a dozen DCHA procurements and found systemic problems. The report said DCHA staff said they at times felt pressured by leadership to take actions that didn’t conform with policies and regulations.

Among the procurements HUD singled out for scrutiny was a $14.6 million contract for an energy savings program with a company called ThinkBox. The contract had been on hold since last year pending an internal audit, which was issued by Cooper’s office in August. The audit found that, because of lack of oversight by DCHA, ThinkBox owed the agency more than $2 million in overbilled fees.

ThinkBox co-founder Daron Coates denied the audit’s assertions in a statement first reported by the Washington City Paper, saying, “ThinkBox takes its contractual obligations seriously and intends to vigorously defend itself and enforce its rights.”

In September, Cooper’s office issued another audit, which said the company John Xanthos Inc., along with its affiliate C&A Electric, had been DCHA’s fire alarm contractors “since 2014 without any notable competition.”

The audit accused DCHA staff and Xanthos of bid-rigging in obtaining generator and gas line installations by having companies work as subcontractors to C&A Electric rather than bidding the work out. The audit also accused DCHA of bid-splitting by dividing the work into purchase orders of less than $100,000 to sidestep federal competitive bidding requirements. John Xanthos did not respond to an email requesting comment.

In response to the audit, DCHA management accepted the findings and agreed to terminate the agency’s relationship with John Xanthos Inc. But in an email to the board this month, Cooper said the audit’s submission to the board had been delayed because of “resistance from this administration.”

The relationship between Cooper and Donald frayed further over a review requested by board member Bill Slover and issued on Nov. 1, according to emails obtained by The Post and first reported by Jeffrey Anderson of the District Dig website.

Cooper’s office found that Donald’s administration dealt improperly with the Virginia-based software company Verbosity, which provided “automated workforce deployment” for the agency’s police department, among other services. The audit accused Donald’s staff of using emergency contracts with Verbosity to cover up illegal sole-source procurements from the company by DCHA’s previous administration.

D.C. Housing Authority’s leadership is failing, HUD report says

In response to Cooper’s office’s review of the Verbosity purchases, the board’s chairwoman, Dionne Bussey-Reeder, sent Donald an email directing her to place the agency’s general counsel, Lorry Bonds, and chief operating officer, Rachel Molly Joseph, “on administrative leave pending further investigation.”

Donald followed the instruction, but days later rescinded the leave, she said in an interview for a previous story, after the board got legal advice that Bussey-Reeder lacked the authority to give the order. Bussey-Reeder did not respond to emailed questions from The Post.

Donald agreed that the previous administration handled the Verbosity purchases improperly, but denied that her own administration had done anything wrong.

In an email this month to the board, copied also to HUD officials, she called the auditing office’s review “incomplete and one-sided.” In the email, Donald complained that Cooper “unilaterally decided to submit this audit to the Board without review and guidance from me, her direct supervisor.” Donald said she would welcome further review “by a qualified, objective party.”

Cooper said in a reply-all email that in decades of auditing, she’d never been so disrespected. “It is time now for the Board to act,” the auditor said. “Not doing so will allow perfidy to reign in this agency. You now have audit reports that indicate malfeasance by senior leadership.”

Days later, Donald texted Cooper to disinvite her from executive team meetings, which Cooper told the board in an email are basic to doing her job. “The morale of my entire department is at an all-time low because of the Director’s actions,” she wrote. “So again, I am appealing to the Board to respond to this latest episode of illegal retaliatory behavior by Executive Director Donald.”

Donald, in emails to The Post, said Cooper’s allegations of retaliation “are completely baseless.” Donald said she excluded Cooper from the meetings because she is now reporting “directly to the Board” by taking assignments from its members and “conferring with them regularly without including me,” which Donald said is inappropriate.

According to the Office of Audit and Compliance’s charter, which was approved by the board last year in a unanimous vote, its top official reports both to the director and the board, and is to “have unrestricted access to, and communicate and interact directly with” the board.

Donald, asked by The Post if that reporting path had been changed, replied, “Yes, by the Board.”

When a reporter told Donald that public agendas indicate the board had not taken such an action, she replied in an email: “I guess that’s part of the gaslighting some members of the Board have been engaged in over the last few weeks. It would be great to have a supportive Board focused on the critical work my team and I are doing.”

Bowser appoints, with confirmation by the D.C. Council, six of 13 members on the DCHA board and selects the chair. The commissioners also include the deputy mayor for planning and economic development — now her chief of staff John Falcicchio — giving Bowser’s selections majority control of the board and who it hires as agency director.

Three board members are elected by residents; one is appointed by the D.C. Council; and two, including Slover, are selected by advocacy groups.

Slover, a development consultant with long experience in real estate, is the board’s longest-serving member. He said that from what he’s seen during recent meetings, the agency is preparing to be “minimally responsive” to HUD, rather than truly reflecting on its troubles. He said DCHA needs “a wholesale change in leadership.”

“It’s not just the director. It’s the board. It’s everybody,” Slover said.

The D.C. Council’s housing committee, which despite years of hearings has made limited progress on changes at DCHA, is planning a roundtable for Nov. 30, the day the HUD response is due. The agency’s senior staff have been invited to provide “updates and explanations” of their response to HUD.