Public Housing Irregularities

September 23, 1994

It is understandable that Mayor Kurt L. Schmoke and Housing Commissioner Daniel P. Henson III would disagree with the findings of a federal audit on the city's Housing Authority.

Perhaps there are inaccuracies in the audit, perhaps there are misinterpretations. But the main thrust seems unassailable: A $25 million no-bid repair program cost more than twice the going rate to fix 1,136 public housing units, paid some contractors for work that was never done and gave millions to firms run by relatives of managers.

This is serious stuff. Since fraudulent practices are suspected, a grand jury is now considering whether these irregularities constitute prosecutable offenses.

Ordinarily, not too much should be made about an audit by the Department of Housing and Urban Development. Some past audits were flawed, involved second-guessing or tried to impose newly promulgated rules on past practices. As a consequence, the city was successful in challenging them and the sanctions they prescribed.

Mr. Henson declared an emergency soon after taking over the troubled housing bureaucracy in March 1993. This enabled him to award repair contracts without time-consuming competitive bidding. He was the first one to suggest that by using this method he was circumventing some federal rules and would ultimately be criticized by the HUD bureaucracy.

The reason for Mr. Henson's need to use this Draconian approach was, of course, Mayor Schmoke's failure to exercise due leadership over the city's housing affairs. While trouble signs multiplied, he tolerated Dr. Robert Hearn as his do-nothing housing commissioner. What had once been one of the better-managed public housing programs was gradually run into the ground.

The nation's public housing authorities are in such a mess that even after this negative audit report, Baltimore City's ranks among the better ones. This has been recognized by HUD Secretary Henry Cisneros, who has granted the city much money for projects like the gradual demolition of antiquated and crime-ridden high-rise towers. As units in those buildings are being vacated, however, the number of empty apartments has increased, prompting auditors' suspicions that something untoward is going on.

In a call to the mayor yesterday, Mr. Cisneros said his staff's biggest concern was that favoritism may have been shown in the selection of some non-bid contractors. Mayor Schmoke needs to take all necessary measures to make sure the trust that has developed between him and Mr. Cisneros is not harmed by this negative report.

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