Members of key congressional committees that hold the purse strings for Baltimore's Housing Authority said yesterday they were appalled at the waste in a $25 million no-bid repair program, and called Mayor Kurt L. Schmoke's explanation of the problems "outrageous."
In several interviews, congressmen and senators criticized the city for handing out the money without competitive bids. Taxpayers picked up the bill for inflated costs and for repairs that never were performed by the contractors.
"Baltimore wasted federal funds, mismanaged and misused these funds," said U.S. Sen. Barbara A. Mikulski, a Maryland Democrat who is a leading member of a subcommittee that oversees the Department of Housing and Urban Development.
"I'm hot about this," she said. "We have enormous human needs and few federal dollars, and we have to make the best use of those dollars."
A three-part series published this week by The Sun detailed how a quarter of the money went to friends and relatives of the mayor and housing officials, and millions went to contractors with little or no experience, many of whom did poor work.
In response to the series, Mayor Schmoke issued a statement defending the program, saying more than 1,000 homes had been renovated and "only federal funds, not local tax dollars, were used for this program."
"These funds would have gone back to Washington if they had not been used," the mayor said.
Lawmakers looking for places to slash federal spending said yesterday that the mayor's remarks typify a cavalier attitude local politicians have toward money from Washington.
"Federal funds are not intended to be spent by local jurisdictions just because they don't want to return the money to Washington," said U.S. Rep. Rick Lazio, a New York Republican who is the new chairman of a House Banking subcommittee that oversees housing programs.
"The intentional misuse of funds is wrong, regardless of where those funds come from. I would remind Mayor Schmoke that taxpayers in Baltimore are also federal taxpayers."
Lawmakers like Fred Heineman say politicians with free-spending attitudes are a key reason why he and other Republicans gained control of the U.S. House of Representatives for the first time in 40 years in November.
"This clearly shows what is wrong with government today," said Mr. Heineman, a freshman Republican from North Carolina who belongs to the same banking subcommittee. "Federal tax dollars come from taxpayer pockets just like local tax dollars do."
His comments were typical of other lawmakers on Capitol Hill.
"Just because it's there is not a good reason to spend it," said U.S. Rep. Bob Ney, an Ohio Republican.
Mayor Schmoke last night re-emphasized that if Baltimore hadn't spent the money, it would have gone elsewhere.
"The comment that I made must be read in conjunction with the next statement, which was meant to emphasize that these were funds that had to be spent in order to benefit the citizens of Baltimore, and if not spent, would have had to be returned, as was the case in other cities recently," the mayor said.
This week, Baltimore's Housing Authority spent more than $24,000 in federal tax dollars to defend the program in a series of advertisements in The Sun.
"They should pay the money back and stop spending tax money on ads defending what is indefensible," Ms. Mikulski said yesterday.
Problems with the no-bid program were first identified by federal auditors for HUD last year. On Tuesday, HUD notified the city that it owed $725,759 for inflated costs under the program. Mayor Schmoke and his housing chief, Daniel P. Henson III, say they don't believe they owe a cent and plan to fight the bill.
A spokeswoman for HUD in Washington said yesterday that there was no formal appeal process for the city to follow. HUD and city officials plan to meet March 1 to discuss the auditors' findings and the bill, which the agency expects the city to pay in 60 days.
"They can write a letter to the assistant secretary for public housing if they choose," said a HUD spokeswoman, Vivian Potter. "But this is how it stands. There is no appeal."
Some lawmakers say the mismanagement of the program and Mayor Schmoke's comments invite just the kind of scrutiny and cost-cutting they have been promising voters for the past year.
Tomorrow, they plan to review HUD's budget and begin recommending places to cut.
"It is clear that there is a severe breakdown in oversight at" HUD, said U.S. Rep. Barbara Vucanovich, a Nevada Republican who is a member of the House Appropriations subcommittee that oversees the federal housing department.
The chairman of that subcommittee said HUD needs an overhaul.
"I intend to examine why some outrageous things that have occurred, occurred in the first place," said U.S. Rep. Jerry Lewis, a California Republican. "It's really outrageous to rip off the poorest of the poor."