HUD the obstructer

May 01, 1991

A long-running dispute between the city Housing Department and the U.S. Department of Housing and Urban Development threatens to shut down the only area organization dedicated to encouraging minority business development in Baltimore.

The subject of the dispute is the Council for Equal Business Opportunity, Inc., an independent, non-profit group created in 1967 to help minority-owned businesses secure commercial loans and to provide start-up capital for fledgling businesses through a revolving credit fund. CEBO is partly funded by the city and partly by HUD, through the Community Block Grant Program.

Last year HUD cut off funding to CEBO, citing incomplete records of its loan fund and lax monitoring of the agency by the city Housing Department. The city agreed to review HUD's complaints and moved to restructure CEBO to comply with revised federal guidelines. But as the negotiations dragged on, CEBO began to run short of cash to continue operating. Now, unless HUD allows the city to resume funding CEBO with Community Block Grant funds, the agency will have to shut down.

Basically the dispute turns on more or less arcane issues related to CEBO's technical compliance with a regulatory tangle that itself has been revised continuously over the years. That's why the city wants HUD to lift its ban on block grants to CEBO while negotiations continue on resolving old business. After all, there is no suggestion of any unethical or criminal behavior. And both sides agree that CEBO has played a vital role in Baltimore.

Given CEBO's track record, HUD's position seems willfully obstructive. Members of Maryland's congressional delegation have asked HUD Secretary Jack Kemp to resolve the dispute. Given Kemp's oft-stated commitment to urban enterprise zones -- a concept that neatly dovetails with the aims of CEBO -- we trust that the matter will be decided in Baltimore's favor.

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