Henson granted waiver by HUD Housing chief's sister can be subcontractor on major project

October 29, 1997|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

A federal agency has granted Baltimore Housing Commissioner Daniel P. Henson III a retroactive waiver from conflict-of-interest regulations, a move that permits his sister's role as a subcontractor on a major housing project.

In a letter made public yesterday, Bill Tamburrino of the U.S. Department of Housing and Urban Development issued the waiver allowing Joy Owens Interiors to act as a subcontractor on the federally funded $115 million Lafayette Courts project. The firm is owned by Florence Owens, Henson's sister.

Joy Owens Interiors has a subcontract to do interior decorating on the project. Henson has told HUD that he played no role in her winning the contract.

The regulations bar contracts between housing administrators and companies owned by themselves or members of their immediate family.

In his one-page letter, Tamburrino said that under the department's conflict-of-interest regulations, Owens "may not enter into a contract, subcontract or arrangement in connection with a [HUD financed] project" unless the regulations are waived in advance by HUD.

While noting that "no such waiver" was requested before the contract was awarded, Tamburrino added, "However, it is the opinion of this office that had this waiver been requested timely, it would have been granted."

As justification for the waiver, Tamburrino noted an opinion from Henson's legal counsel that such a waiver would also be permitted under state and local law.

HUD officials declined to make that legal opinion public.

A spokesman for the commissioner said Henson would have no comment, and the letter spoke for itself.

When first questioned about the conflict-of-interest rules, Henson said he did not believe they applied to his sister's contract. Later, however, he asked HUD for a waiver.

In his Friday letter, Tamburrino concluded that there was no conflict of interest in two other issues raised in a July article in The Sun: an outstanding personal loan to Henson from Struever Bros. Eccles & Rouse; and the employment of his nephew by a firm, Budget Contractors, that won a series of no-bid housing authority contracts.

"Based on your analysis this office has confirmed that no conflict of interest exists," the letter states.

The Sun reported that Henson has a loan from Struever Bros. dating to his employment with the firm, which he left in 1993. He said he owes about $50,000 on the loan, which was used primarily to pay for an addition on his home.

"The loan is simply an outstanding debt which was made similar to any other kind of personal loan," Henson wrote in a July 23 letter to HUD.

The commissioner also acknowledged he was the owner of limited partnership interests in several projects with the principals of Struever Bros. but added that those partnerships "evolve no income to me whatsoever and are effectively dormant."

Henson said that he had recused himself from any actions relating to Struever Bros., including the awarding of a contract to the firm for the rebuilding of Lexington Terrace project.

The housing commissioner told HUD that his nephew, Allen J. Henson Jr., was not a principal or stockholder in Budget Contractors, a firm that has won more than $700,000 in no-bid contracts from the housing authority.

At the time of those no-bid contract awards, The Sun reported, one of the owners of Budget put up a house he owned as collateral to bail the commissioner's nephew out of jail.

Pub Date: 10/29/97

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