The federal department of Housing and Urban Development said yesterday that it will call off a freeze on federal support for the Council for Equal Business Opportunity, but only if Baltimore agrees to impose strict guidelines for the spending.
In a letter addressed to Representative Kweisi Mfume, D-Md.-7th, who has been lobbying HUD officials to restore the federal funds, a HUD assistant secretary said the city's failure to to correct problems in its management of block grant programs "raises a serious question as to the city's ability to substantially // comply with program requirements."
Last November HUD ordered the city to cut off more than $600,000 in federal money to the CEBO because the non-profit organization, which was formed to provide loans to small, minority-owned businesses, could not prove that it was operating within HUD block grant guidelines.
In this budget year, CEBO was to have received $680,500 in block grant money plus an additional $164,222 in city funds. HUD guidelines require that money administered under the Community Development Block Grant program only be used to help low- to moderate-income people or to eliminate urban blight.
In the letter to Mr. Mfume, Anna Kondratas, an assistant secretary at HUD, said that the department would allow the city to resume funding CEBO under three conditions, which generally call for tighter city oversight of CEBO activities.
Mayor Kurt L. Schmoke, who nine days ago approved a $25,000 emergency appropriation to CEBO to keep the 23-year-old group from having to shut its doors, said that he considered the HUD conditions acceptable and that the HUD decision is a vote of confidence for management changes proposed by CEBO.
"I think HUD is saying that the changes that CEBO is making are moving it in the right direction, that it is an important agency and that we should continue to support it," the mayor said yesterday.
But Mr. Mfume said that HUD officials are losing patience with officials in the Baltimore department of Housing and Community Development, which administers block grant money flowing to the city.
"I think HUD is tired of dancing to that music and is insisting on compliance with CDBG program requirements," Mr. Mfume said. The city's housing department must understand that we are in an era of heightened compliance, that the inspector general and Congress are trying to re-establish the public trust. . . ." in the wake of scandals that rocked the department in recent years.