Chief investigator for HUD says she intends to retire

May 03, 2001|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

Susan Gaffney, the chief investigator at the U.S. Department of Housing and Urban Development, whose plans for a fraud probe in Baltimore sparked charges of racism from former Mayor Kurt L. Schmoke three years ago, announced her retirement yesterday.

Gaffney, 57, said she plans to retire "in about a month" after 22 years in the federal government. In 1993, former President Bill Clinton named her HUD inspector general, an independent post that supervises a nationwide staff of auditors and criminal investigators.

She planned in 1998 to launch intensive probes of the use of HUD money in Baltimore, San Francisco and New Orleans. Schmoke and Daniel P. Henson III, his housing commissioner, accused her of racism because each city had an African-American mayor.

Mayors, members of Congress and former HUD Secretary Andrew M. Cuomo joined the chorus.

Gaffney delayed and retooled the investigation. Called the Housing Fraud Initiative, it is operating in six places across the country, including Maryland, where a team of 20 auditors and investigators is working out of Baltimore offices. The FBI is part of the effort.

Thus far, the initiative has focused on house "flipping" and fraud involving mortgages insured by the Federal Housing Administration, a HUD agency.

Gaffney's audits and congressional testimony were highly critical of HUD under Cuomo, and he tried repeatedly to force her out.

"I outlasted Cuomo," she said yesterday. She said she believes the new HUD secretary, Mel Martinez, will support her successor.

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