Housing agency returns funds, bringing end to HUD review

January 08, 1999|By Gerard Shields | Gerard Shields,SUN STAFF

The federal government has ended its 1994 review of the Baltimore Housing Authority's scandal-ridden, $25.6 million, no-bid repair program for low-income housing.

The housing authority returned $343,400 to the U.S. Department of Housing and Urban Development to resolve accusations that the authority paid twice the going rate to fix apartments for the poor, paid contractors for work that was not done and paid millions to companies run by friends and relatives of authority directors.

The HUD audit led to an FBI investigation. That investigation resulted in the conviction of 13 people on corruption charges, including two former housing authority employees who admitted taking bribes.

City Housing Commissioner Daniel P. Henson III welcomed the end of the matter.

"We're thrilled that we were able to reach a workable conclusion with HUD," Henson said. "And today, we're a better agency because of it."

The authority's troubles began shortly after Henson became commissioner in March 1993. With rising complaints about unavailable and deteriorated housing in the city, Henson declared an emergency, clearing the way for his agency to spend $25 million in HUD funds.

In an effort to repair 1,100 rundown residences quickly, the authority hired contractors without traditional competitive bidding. Charles Marris, a housing authority veteran who managed the no-bid program, pleaded guilty to taking bribes from contractors. An authority engineer, John L. Dutkevich, admitted accepting more than $25,000 in bribes stemming from housing authority contracts from 1990 to 1993.

Morris cooperated with the FBI and was instrumental in the conviction of six contractors who participated in the program, including Larry Jennings, a housing authority board member's father.

Although the matter is settled, Henson continued yesterday to challenge audit findings, saying HUD failed to prove that the authority overpaid for repairs or paid for work that was not completed. The authority had three full-time employees working to resolve the 27 HUD accusations, Henson said.

"It takes more time and energy to argue about it," Henson said about resolving the matter. "I learned some valuable lessons, the authority learned some valuable lessons, and we're getting this audit behind us and directing our energy to building the best housing authority in the country."

The housing authority transferred the $343,400 from its Section 8 housing reserve fund. The fund consists of money that the authority earns from HUD for operating low-income housing.

Pub Date: 1/08/99

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