With federal scrutiny trained on its low-income voucher program, the D.C. Housing Authority recently parted ways with a program leader and her subordinate after auditors found the senior staffer had an unreported conflict of interest.
It’s a critical time for agency leaders, who are facing a Friday deadline to show federal overseers progress in combating deficiencies identified in a scathing HUD audit last year. DCHA’s chief operating officer, Rachel Molly Joseph, declined to comment beyond saying in an email that the agency has referred the matters to the D.C. Office of the Inspector General.
The voucher program leader under scrutiny was hired under agency director Brenda Donald, who has repeatedly blamed the previous administration for problems identified in the HUD audit. On Thursday, Donald said DCHA has a “zero-tolerance policy for fraud.”
“This is not widespread corruption throughout this agency,” Donald said. “There are isolated incidents that when brought to my attention, I referred to our internal auditor for investigation.”
The audit reports, however, flag systemic problems at the agency, such as inadequate training and supervision of employees and a lack of checks and balances to prevent fraud, waste and abuse.
The most recent internal audit accuses Karissa Spann, a deputy director of the voucher program, of a conflict of interest in her relationship to a landlord. Spann, whose name was redacted from the report reviewed by The Washington Post, confirmed she was the subject of an investigation, said it had not been properly conducted and denied wrongdoing.
The other audit, which also contained redactions, accuses a lower-level employee of steering vouchers to people unqualified to receive them.
Spann along with two lower-level employees are no longer employed by the housing authority, DCHA officials confirmed. The agency’s internal auditing office found her in violation of ethics standards and accused her of planning to steer voucher tenants to a landlord with whom she’d had a financial relationship.
The investigation originated from a Jan. 24 complaint by an employee under Spann’s supervision. The complaint alleged that she maintained a financial relationship with a landlord described as owning 30 apartment buildings totaling 700 units. The landlord, whose name is redacted from the report, told auditors he met Spann 11 years ago through an unidentified business venture and had provided her with a “financial bailout” when her business was in “financial distress.”
The landlord told auditors he paid Spann “50 to 100%” of the first month’s rent for placing residents in his apartment complexes. He said he had not paid Spann to do this since she began at DCHA. But in January, the landlord told auditors, he again asked for her help, and he had intended to pay her. The landlord declined to provide further information because he didn’t want to get her “into trouble,” the audit report said.
Auditors obtained recent text messages in which Spann referred to the landlord as her “client,” according to the audit report, which states that she did not disclose her business on conflict-of-interest waiver forms when she was hired.
Before joining DCHA in May of last year, Spann ran a D.C.-based real estate business, Fresh Start Housing Services, but she said that she received no payments while working at DCHA and that there were no conflicts of interest.
“I wasn’t providing consultant services, I was providing weekly landlord coaching and tenant classes,” she said.
The audit report says that several days after the complaint was filed, Spann lodged a countercomplaint accusing the employee who filed it of impropriety with the same landlord. Several days after that, a supervisor recommended the employee be fired because she was not a “good fit” for the agency, according to the report.
Daphne Aponte, a former “mobility specialist” with DCHA, confirmed that she is the employee who made the complaint.
“I have not engaged in any wrongdoing,” Aponte told The Post. “I have not been paid for any of the help to community members,” she added. Aponte said she lost her job in retaliation for filing the complaint.
A separate internal audit issued on Jan. 23 centers on a recently constructed apartment building in Northeast Washington called the Rise at Temple Courts.
The building, the product of public-private partnership, was intended as a homecoming for residents displaced in 2009 when the city tore down two apartment complexes, Temple Courts and Golden Rule, that were overrun by rats and crime. But according to an internal audit report, DCHA’s lead relocation coordinator on the project filled two units with personal friends who never lived in those complexes. They were also ineligible in other ways, the audit said. One, for instance, appeared to be a Maryland resident.
The internal audit, first reported by Jeffrey Anderson of the District Dig website, was sparked by a complaint from Kettler Management, which manages the property on behalf of its owners, MRP Realty, Taylor Adams Associate and CGS Urban Partners. Kettler employees noticed a DCHA relocation coordinator, whose name was redacted from the report reviewed by The Post, repeatedly entering apartments after they were leased.
The project “took longer than originally envisioned, but today we’ve delivered on the promise made by our city more than 15 years ago,” Mayor Muriel E. Bowser (D) said at the building’s ribbon-cutting ceremony in December. The Rise holds 220 apartments, 65 of which were reserved for relocated residents.
Auditors cited a “lack of program oversight” as the main contributor to their findings. There was circumstantial evidence, according to the report, that dozens of the residents “did not go through the prescribed screening process and may be in jeopardy of being removed from the Rise at Temple Courts premises.” The report recommended a review of all of those placed.
Officials have given differing accounts of who those people are. Sheila Miller, director of the city program — the New Communities Initiative — under which the relocations were planned, said at the ribbon cutting that 61 units had been filled and four were in process. “They’re all returning residents,” she said.
But DCHA director Brenda Donald, when questioned during a March 2 council oversight meeting, said that number was lower, as many people who had to leave their homes elected not to return after rebuilding lives elsewhere.
Donald said DCHA has referred the matter to D.C.’s Office of the Inspector General, which will decide whether a criminal referral is appropriate. “There are and were systemic failures … that we are addressing in terms of supervision and systemic checks and balances,” Donald said.
At a news conference Thursday, D.C. Council housing committee chair Robert C. White Jr. (D-At Large) took aim at the housing authority, highlighting the recent voucher program investigations alongside previous audits focused on contracting, all of which he said created “a picture of extensive, unethical and illegal behavior occurring throughout the agency.”
White called for broad accountability measures, saying the problems cannot be fixed by merely firing employees or updating conflict of interest policies “and sweeping it under the rug.”
“I believe these investigations are a critical part of the story of how our voucher system — from the start, with who gets vouchers, to the finish line at the building where voucher holders end up living — is getting corrupted, and not consistently meeting the needs of our residents,” White said, as Donald looked on from the steps at the John A. Wilson Building.
“I am angry that the leadership culture failed to prioritize and elevate serious issues,” he added, “but instead tried to quash them quietly at the expense of taking the opportunity to investigate and fix them holistically.”
Bowser, who controls the housing authority’s board and is a longtime supporter of Donald, swiped back at White on Thursday at one of her own events, saying “he should be focused on the work of the housing authority and not grandstanding about the housing authority.”
Michael Brice-Saddler contributed to this report.