One of the U.S. Senate's most aggressive watchdogs said Thursday he has begun an inquiry into Baltimore's public housing agency, after receiving calls and emails concerning "a wide range of allegations, including possible conflicts of interest, fraud, waste and abuse of taxpayers' monies."
Sen. Charles E. Grassley of Iowa, ranking Republican member of the Judiciary Committee, requested reams of documents from the U.S. Department of Housing and Urban Development, which oversees housing authorities around the country and steers millions of dollars a year to Baltimore.
Among Grassley's requests: detailed billing records showing how much money the Housing Authority of Baltimore City has spent on private lawyers since 2003 and what legal services that money provided.
The Baltimore Sun reported this month that the authority has paid outside lawyers about $4 million since 2005 to fight lead-paint poisoning cases, with bills totaling $228,000 for May and June alone. Meanwhile, the authority has refused to pay nearly $12 million in court-ordered judgments in cases in which former residents of public housing were poisoned by exposure to lead paint.
City Housing Commissioner Paul T. Graziano did not respond to requests for comment Thursday evening. Nor did his spokeswoman, Cheron Porter. Ryan O'Doherty, spokesman for Mayor Stephanie Rawlings-Blake, said she would "ensure that Baltimore Housing provides any information that HUD may seek to obtain … [she] very much encourages Senator Grassley to share and disclose any specific allegations of wrongdoing so that they can be fully investigated immediately."
In his three-page letter, sent Thursday to HUD Secretary Shaun S. Donovan, Grassley said his office has received "numerous phone calls and emails" in recent months about three local agencies: Baltimore's housing authority, the city's Department of Housing and Community Development and its quasi-public economic development arm, Baltimore Development Corp.
The letter does not go into detail about the allegations. It mentions BDC only once, and largely concerns the housing authority and the housing department. Although the housing authority is technically separate from city government, Graziano has overseen both agencies for 11 years. In recent years he has essentially merged them under the umbrella of "Baltimore Housing."
"I've not seen the letter, never heard anything about it and have no clue as to what might be on the gentleman's mind," said BDC President M.J. "Jay" Brodie.
In a statement to The Sun, Grassley said: "HUD is good at writing checks and not good at making sure the money is spent as intended. As a result, housing authorities in Philadelphia, Los Angeles, Chicago, and Puerto Rico have had some serious problems with misspending.
"So far, the issues that have come to light in Baltimore warrant attention and answers from HUD. Ideally, Baltimore won't fall into the same pattern of other housing authorities that get sidetracked from their mission of providing safe, affordable housing to low-income residents and waste money. HUD needs to figure it out and fix whatever's wrong."
A HUD spokesman did not respond to requests for comment.
Grassley's letter asks HUD to:
•Provide detailed documentation showing how Baltimore's housing authority used $67 million in federal stimulus funds.
•Explain why the housing authority is now "one entity" with the city housing department. "Did HUD approve this? If so, why?"
•Provide documentation outlining steps federal officials took after a critical 2008 audit found numerous housing violations in residential units leased by the Baltimore authority for tenants.
•Provide names and financial reports for the housing authority's nonprofit affiliates, including lists of officers and employees, their yearly salaries and compensation, and any conflict of interest statements submitted to HUD.
•Provide the names of all outside law firms under contract with the housing authority since 2003, along with billing statements from the firms and an accounting of the money spent.
This month, housing authority officials described outside legal fees as necessary to provide it with vigorous representation in court. They noted that the amount of pending lead-paint claims against the authority — $800 million — would bankrupt the agency.
The legal costs have incensed some critics, however, who say the victims of lead-paint poisoning should be paid and that every dollar spent on lawyers is less compensation for them.
Although federal officials have approved the agency's use of outside lawyers, Grassley's letter says he is "concerned about whether the expenses have been adequately reviewed and whether HABC resources would have been better used by employing in-house attorneys."
In 2008, HUD's inspector general audited the leased housing administered by the housing authority and found that 57 of 59 units had a total of 574 housing violations, Grassley's letter notes. It also found that the authority's own inspectors failed to report 380 violations.
Asked in July about the inspector general's findings from 2008, Graziano told The Sun: "We fundamentally disagree with him." He said the criteria used to judge the units were "not practical."
"We took housing inspections seriously," Graziano said. "But my own house would not pass inspection."
Grassley's letter says concerns he's heard about Baltimore are "similar" to problems that have occurred at the Philadelphia Housing Authority in recent years.
The Philadelphia agency's highly paid director was fired last year. Its five-member board stepped down, and HUD took control of the agency as investigators looked into allegations of inappropriate spending and outside legal fees since 2007 totaling more than $33 million, according to the Associated Press.