Rosenberg said he did not have a specific legislative remedy in mind. Technically, the housing authority is an independent entity that gets most of its money from Washington, not the state. Graziano, its director, wears a second hat as the mayor's appointed housing commissioner.

For months, the housing authority has contended that it cannot and will not pay all of the court-ordered judgments. Yet in recent months there have been developments affecting several judgments.

Last fall, the authority paid three judgments totaling $907,000. In January, the Baltimore housing authority scored a legal victory when the Court of Special Appeals, the state's second-highest court, overturned a $2.6 million jury award to a brother and sister who contend they were poisoned by lead in the early 1990s. The siblings have asked the Court of Appeals to review the ruling.

Graziano has insisted that his agency, the nation's fifth-biggest, would need federal approval to pay all of the judgments. He has also said that, federal approval or not, the agency would effectively be bankrupted by present and future judgments.

In January, Graziano said his agency "is committed to addressing lead paint judgments in a fair and responsible way; however, we also have responsibility to defend against unfounded lawsuits to protect limited resources for the 50,000 low-income housing residents we serve today."

One secondary effect of the unpaid judgments has evidently been to derail the $1.65 million loan from the state Department of Housing and Community Development. The city's housing authority had expected the money to help pay for 22 affordable housing units in Baltimore.

In June, a state official sent Graziano's agency a letter modifying the terms of the loan, which was approved initially in October 2010 and would have been forgiven had the money been spent properly. Under the revised terms, the housing authority was required to prove that there was no pending litigation or "existing judgment liens" that would put its real estate or project funds at risk of seizure.

Clarence J. Snuggs, the state's deputy housing secretary, declined to say why the state changed the terms of the loan. But email messages obtained through a public records request indicate that state officials were worried that the loan could be seized by private lawyers trying to collect lead paint judgments.

In August, Anthony J. Mohan, a state housing department lawyer, sent an email to a city housing authority lawyer suggesting that the state "no longer was funding the project due to the pending lead paint litigation and the existing judgment awards." Mohan also referred to the state's concern "that its loan proceeds would be vulnerable to collection because of the litigation and judgments."

Assistant City Housing Commissioner Peter Engel said the state loan was not ideal. Even before the terms were modified, state requirements would have reduced the net proceeds by several hundred thousand dollars. The housing authority has since found funds internally to move ahead on the 22 housing units.

Still, Engel said the loan was attractive. And he acknowledged that the money used to finance the project is money now unavailable for some other purpose.

And even though the lead paint cases seem likely to keep the loan from ever being made, the authority still could receive the money. The state has given the authority until April 25 to meet its conditions.

"We'd love to get that money," Engel said.

Rosenberg, meanwhile, said the housing authority's continued inaction on the lead paint cases is unacceptable.

"The city needs to address the judgments," he said. "They can't ignore the judgments. They have to address the judgments in an appropriate, legal way."

scott.calvert@baltsun.com

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