Feds want agency data
Biesecker; Staff Writer, News & Observer, February 4, 2006
DURHAM -- Federal officials have asked the Durham Housing Authority for extensive information about two companies it paid thousands for doing little or no work.
The request from the U.S. Department of Housing and Urban Development came days after a Durham housing board member requested an investigation of the authority's handling of a $35 million Hope VI redevelopment grant.
A Jan. 21 article in The News & Observer detailed more than $130,000 in questionable payments to the two companies: Eagle Village Community Development Corp. and Durham Regional Community Counseling.
Tax records show the board of directors at Eagle Village included the housing authority's longtime executive director; a senior authority staff member; an authority board member; Durham City Council member Howard Clement III, the city's longtime liaison to the housing authority; and several people who had business dealings with the authority.
Deloris Rogers, the chairwoman of the housing authority board, said Friday that she was never told of any dealings with Eagle Village or made aware of the potential conflicts of interest raised by so many with ties to both the private company and the public agency.
"I never knew anything about Eagle Village or who was on its board," Rogers said.
In 2004, the city of Durham cut off funding to Eagle Village, named for its affiliation with N.C. Central University, because it refused to turn over financial documents and taxpayer money disappeared. Despite the well-publicized problems, money from the housing authority continued to flow.
Documents released Friday show questions were raised within the authority last summer about whether Eagle Village and Durham Regional had been bilking the agency. Further payments were suspended. But those concerns were not disclosed to the public, the authority's board or federal officials monitoring the Hope VI project.
"None of this was shared with me," said RaShanne Woods, the board member who requested the investigation and chairwoman of the authority's Hope VI oversight committee. "I definitely think there was an effort to keep this from leaking out."
Asked Friday if HUD was now investigating the authority's relationship with Eagle Village and Durham Regional, a spokeswoman at the federal agency's Washington headquarters said, "The request for information speaks for itself."
Other investigations
There have been at least three investigations of the Durham Housing Authority since April 2003. At that time, the agency's executive director, James Tabron, was forced to resign after making more than $12,000 in personal charges on an agency credit card -- including a gold ring, flowers and cash advances. Federal auditors later alleged more than $12 million in misspending and improper loans tied to the agency and two nonprofit subsidiaries created by Tabron.
State incorporation records show Tabron helped charter Eagle Village in 1998, signing as the nonprofit company's board secretary. Four years later, acting as the head of the housing authority, Tabron signed potentially lucrative contracts with Eagle Village and Durham Regional to provide financial consulting to residents displaced as part of the expansive Hope VI redevelopment.
Complex demolished
HUD awarded Durham the $35 million grant in 2000 to tear down the Few Gardens public housing complex and replace it with 425 new East Durham homes. Of that, $5.3 million was budgeted to help the more than 200 families that would be displaced so they could qualify for federally backed mortgages to buy new Hope VI homes.
More than $3 million in grant money was spent, but The N&O reported in April that the authority had lost track of the majority of the families it was supposed to help and that only eight residents completed the required homeownership classes.
Within weeks of the revelation, Hope VI director Gwen Simpson was fired, along with most of her staff. One of the dismissed staff members, William V. Harris, was later charged with a felony count of embezzlement for allegedly stealing the rental payments of low-income residents. Harris is awaiting trial.
Also fired was Charles H. Smith Jr., who directly oversaw the contracts with Eagle Village Community Development and Durham Regional Community Counseling.
Tax records also list Smith as a board member at Eagle Village.
Smith was fired as executive director at the Wilmington [Del.] Housing Authority in 1999 after an FBI investigation and HUD audit found millions in misspending and missing money. HUD banned Smith from working for housing authorities in Delaware, but Tabron hired him in Durham the following year.
Invoices in question
After Simpson and Smith were dismissed last year, outside consultants discovered that all but one of the public housing residents the private companies claimed to have served had not been moved from Few Gardens, and were therefore not eligible. Many of the questionable invoices filed by the companies were approved by Simpson, even after news broke of the financial problems at Eagle Village.
The Durham City Council earmarked more than $1 million to invest in a block of 10 historic mill houses that Eagle Village planned to remodel. After spending $487,329, the city cut off payments in March 2004 when it was discovered that Eagle Village had not supplied required audits. Work on the project froze, and the nonprofit's director, Everett Miles, was fired. The city was later forced to repay HUD $13,473 given to Eagle Village after no proof could be provided that it was spent for any legitimate purpose.
No tax returns
The tax returns of nonprofit companies -- which detail their income, spending and board members -- are open to public inspection under federal law. The Internal Revenue Service confirmed this week that Eagle Village has failed to file tax returns since 2001.
Eagle Village's current executive director, Stephen Fountain, has not returned repeated calls from The N&O. Glyndola Massenburg-Beasley, the president of Durham Regional, could not be reached Friday evening.
** The FBI might just want to open a permanent office in Durham. **
Why? If they move as slowly as the HUD officials have since 2000 another $3 million or so can end up being unaccounted for.
HUD awarded Durham the $35 million grant in 2000 to tear down the Few Gardens public housing complex and replace it with 425 new East Durham homes. Of that, $5.3 million was budgeted to help the more than 200 families that would be displaced so they could qualify for federally backed mortgages to buy new Hope VI homes.
More than $3 million in grant money was spent, but The N&O reported in April that the authority had lost track of the majority of the families it was supposed to help and that only eight residents completed the required homeownership classes.
What does $3 million divided by 8 come out to be?