Muriel E. Bowser, the Democratic nominee for D.C. mayor, asked the city’s inspector general on Tuesday to open an investigation of the financial collapse of one of the city’s largest affordable housing complexes.
Bowser’s request could blunt criticism, mostly from one of her outspoken general-election opponents, D.C. Council member David A. Catania (I-At Large), that she has intervened to protect a political supporter who is the president of the nonprofit corporation that owns Park Southern Apartments.
A Washington Post report Monday documented Park Southern’s dilapidated physical condition as well as its dire financial straits, including rodent infestations, mold, broken air conditioning and the corporation’s default on a $3 million city-backed loan. City officials recently accused the nonprofit of “gross mismanagement.”
The complex, which sits along the District’s southern border with Maryland and houses more than 700 residents, also is tangled in election-year politics. Rowena Joyce Scott, the embattled president of the nonprofit board, is a longtime Democratic power broker in Southeast Washington. During the Democratic mayoral primary campaign this spring, she switched from backing Mayor Vincent C. Gray to supporting Bowser. In subsequent weeks, Scott has accused the Gray administration of unfairly targeting her for “revenge,” while Gray advisers — and Catania — have accused Bowser of inappropriately intervening to protect Scott’s control of Park Southern at the expense of its residents.
After Bowser won, the city seized control of the property, which is now $628,000 behind in mortgage payments. The Democratic nominee promptly questioned city lawyers about whether Gray’s administration had acted appropriately.
Bowser also attempted to organize a meeting between city housing officials and Scott. Gray’s administration rebuffed the request, saying that doing so could compromise the city in an evolving legal and potentially criminal matter — including an allegation that an associate of Scott’s had not turned over to the city-installed property manager about $300,000 in rent payments collected in March. The associate, Phinis Jones, is a contributor and organizer for Bowser’s campaign who was Scott’s property manager before the city stepped in.
On Monday, Catania pounced on Bowser’s behind-the-scenes involvement, saying she was working to protect the interests of a campaign supporter. At the council’s final legislative meeting of the summer that day, he introduced a measure calling on Bowser, who chairs the committee responsible for city housing issues, to investigate.
Catania said that aside from the allegations of Scott’s mismanagement, the investigation must find out what happened to the uncollected rent — and what Scott’s and Jones’s involvement was.
“Why can’t she pick up the phone and ask two of her principal supporters what happened to the $300,000?” he said. “She should be questioning the people surrounding her.”
Catania also blasted the timing of Bowser’s call for an investigation, saying, “She has known for three months that her campaign supporters and contributors have been alleged in mismanagement and she did nothing until it appeared in the paper.”
Gray’s administration asked Bowser to investigate in May, when she sought the private meeting with Scott. Gray’s housing director urged her to hold a public hearing instead, saying he would testify about how and why the city came to seize the property.
Bowser’s letter to Interim Inspector General Blanche Bruce, sent late Tuesday, cites the default of a $3 million city loan to the Park Southern nonprofit, as well as the building’s dilapidated condition.
“As your office is the independent entity charged with detecting, investigating, and deterring mismanagement, fraud, waste, and abuse in the District government, I am referring this matter to your attention for full investigation,” it said.
Bowser’s letter did not specifically name the administration or council as being subject to the investigation, but she said in an interview Tuesday night that investigators should look at the issue broadly and follow leads wherever they go.
She also denied the accusations that she had acted improperly. She said her decision to refer the matter to the lawyer should make clear she has nothing to hide and “certainly suggests there is no worry there.”
Bowser said it was her business to be involved in the issue and to seek a meeting with all of the stakeholders. She added that she has worked through “a hundred” housing issues in similar fashion.
“I’m supposed to be close to the issue, I have no concerns there, but I do want to make sure that if there are questions — and there are a lot of allegations swirling around, including from the tenants — that they are answered,” she said.
Bowser repeated that her prime goal in the matter is making sure that Park Southern, an iconic public-private partnership in affordable housing begun by Marjorie Lawson, a city judge and civil rights leader, remains a property that charges below-market rents for working-poor families who earn too much to qualify for federally subsidized public housing.
Scott said she is not concerned about an investigation.
“I don’t have any problem with it. . . . I understand that David Catania said he wanted that to happen, so that’s why she probably does now, too.”
Scott said the property manager the city installed already had taken records for a “forensic audit” of the building’s finances.
According to court records, interviews and correspondence obtained by The Post under the Freedom of Information Act: Park Southern owes the city $628,262 in mortgage and interest payments. It owes about $400,000 more for utility and other bills, mostly to Pepco and Washington Gas. Tens of thousands of dollars are missing from the account holding tenants’ security deposits.
Tenants also allege in a lawsuit filed in April that Scott and the board racked up tens of thousands of dollars in unexplained travel expenses, and filed tax returns showing salaries for nearly 100 people even as residents saw only two or three at the property. Scott and her daughter also had rent-free apartments at the property.
Scott said those were compensation for their respective roles as president and vice president of the nonprofit. City officials said that under a covenant on the property, units were supposed to be leased by low-income residents.
Lauren J. Buckner, attorney for the Park Southern Residents Council, the group of residents suing Scott and the nonprofit board, said she looks forward to an inspector general’s investigation.
“We know the money was not used properly. The renovations that were supposed to have been made were not made, and the fact that the money is not there raises the question: Where did it go?”