Housing agency misused funds, audit shows

October 02, 2001|By Caitlin Francke | Caitlin Francke,SUN STAFF

The Housing Authority of Baltimore City wrongfully used $885,834 of federal money to bail out the city's troubled cable agency, which transmits City Council meetings and public service announcements, according to an internal audit and agency officials.

Two weeks ago, the City Council voted to reimburse the housing agency for the money it spent on cable television over a three-year period that was supposed to be used for housing programs.

"We agreed that it was an improper use of HUD [the U.S. Department of Housing and Urban Development] funding," said John Wesley, a housing authority spokesman.

Daniel P. Henson III, former housing commissioner who in 1997 diverted the money to the cable operation, defended his actions yesterday, saying he had HUD's blessing. At the time, he said, HUD wanted to invest in profitable projects. "We couldn't have done it without HUD's approval," he said. "What I am learning from my experience in city government is that no good deed goes unpunished."

Henson, who left office in December 1999, said he decided to get involved because he planned to make money for housing by collecting fees from other city agencies to put shows on the air.

According to the audit, the housing authority assumed primary financial responsibility for the city government's cable operation in the summer of 1997, after the city could no longer afford to keep it afloat. Authority management created a nonprofit organization called TechTel to oversee the cable operation.

The decision to fund the operation was not approved by the housing authority board, HUD or the city's Board of Estimates, says the audit, which was released Friday.

The agency paid the expenses and salaries of six people for TechTel from July 1997 through June of last year, the audit states.

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