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Corruption Chronicles

Ousted HUD Sec. Federally Investigated

A presidential cabinet member who was recently forced to resign is being federally investigated for enriching himself and his friends by giving them lucrative government contracts during his tenure as secretary of Housing and Urban Development (HUD).

President George W. Bush’s HUD secretary, Alphonso Jackson, has long been accused of practicing cronyism at the federal agency that works to give Americans access to affordable housing and increase home ownership. He resigned under fire last month although his biography still appears on the HUD website as its secretary.

Federal investigators say that Jackson awarded numerous lucrative agency contracts, worth hundreds of millions of dollars, to a tightnit group of rich friends since being confirmed HUD secretary in 2004. The agency allocates a big chunk of its nearly $40 billion annual budget to contracts with outside companies and Jackson committed crimes if indeed he pressured his subordinates to award contacts to specific firms.

Additionally, Jackson is under investigation for taking kickbacks in exchange for the hefty deals he gave his buddies, a small circle of prominent black businessmen who capitalized on Jackson’s promise to expand opportunities for minority contractors.

Among the friends was an Atlanta developer who got a $127 million contract to rebuild a New Orleans public housing project, another who received at least $610,000 for Hurricane Katrina reconstruction work and the owner of a law firm that was paid at least $1 million by HUD to run the Virgin Islands housing authority.

The probe that ultimately led to Jackson’s resignation last week was first launched by the FBI last year, following the lead of HUD’s Inspector General. It focused on a friend that got a $392,000 no-bid government deal to serve as a construction manager—for a period of a year and a half—in New Orleans after Hurricane Katrina devastated the city.

HUD has been plagued by scandal before. In 1999 Bill Clinton’s housing secretary, Henry Cisneros, pleaded guilty to lying to the FBI about payments to his former mistress. An influence-peddling scandal under Ronald Reagan led to the conviction of 16 people, including top aides to then HUD Secretary Samuel Pierce.


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