OIG Audit Targets Andrew Cuomo's HUD Overhaul

Audit Faulted Cuomo's HUD Overhaul

By JACOB GERSHMAN, WSJ
LINK

Andrew Cuomo points to his time as Housing and Urban Development secretary as a prime example of how he's made government more efficient and effective. But federal auditors say Mr. Cuomo oversaw a "poorly planned" overhaul of personnel that bulked up HUD's public outreach but undermined the agency's enforcement efforts.

President Clinton nominated Andrew Cuomo to head HUD in 1996.

During the gubernatorial debate on Monday, Mr. Cuomo touted his four-year record at HUD, saying he "shrunk government" and promising to do the same in Albany if elected governor. "The question in this race is who can actually do it. Who can get it done," he said.

While the number of full-time employees at HUD declined under his watch, Mr. Cuomo also added hundreds of high-paid positions as part of his "Community Builders" program, which came under withering criticism from HUD's veteran field staffs, federal auditors, and Republican lawmakers in Washington.

"The concept was not unreasonable. But it was very poorly implemented and the consequences were pretty near disastrous," said Robert Paquin, a former regional director of Community Planning and Development in HUD's Boston office.

The idea behind the program was to split enforcement and customer relations into separate ranks of employees. Between 1997 and 1999, Mr. Cuomo recruited nearly 800 Community Builders, including hundreds of high-paid "fellows" who underwent training sessions at Harvard.

The Community Builders acted as liaisons to city officials and community groups and reported directly to HUD's headquarters in Washington.

"What the Peace Corps is to global development, what Americorps is to local empowerment, we hope Community Builders will be to urban renewal," Mr. Cuomo said when he announced the initiative.

Andrew Cuomo's Political Path

Over three decades, New York Attorney General and Democratic gubernatorial hopeful Andrew Cuomo has charted a careful course through local, state and national politics. Here's a look at his life and career.

In 1999, the program was the subject of a scathing audit report by the HUD Inspector General's office, which recommended that it be terminated.

Congress eliminated its funding that year, over the objections of several Democratic lawmakers, including Sen. John Kerry and now-Vice President Joe Biden.

The audit report said the hiring of the Community Builders skirted federal protocols, siphoned funds away from grant-monitoring activities and caused "significant morale problems" among some career civil servants, who bristled at the higher pay grades awarded to the new employees.

"HUD chose an overly expensive and controversial solution that exacerbated any existing problem," the audit said.

Mr. Cuomo and former aides at HUD said the allegations were unfounded, and fiercely defended the program. "The attacks on the Community Builders program were partisan in nature and wholly without merit," Howard Glaser, deputy general counsel under Mr. Cuomo at HUD, said Friday.

Mr. Glaser pointed to positive reviews of the program by consulting firms hired by HUD. Officials at the Inspector General's office said the other reviews did not contradict the office's claims, and noted that they relied on case studies pre-selected by HUD's senior management.

The Inspector General's audit report also claimed that senior officials under Mr. Cuomo sought to impede investigators examining the program and took the unusual step of asking the Inspector General's office for the names of HUD employees who spoke with auditors.

Several HUD employees "feared reprisal" and urged investigators to keep their communications confidential, according to the audit report.

Mr. Paquin, who was transferred to a lower-level position in 1999, returned to his old job years later after filing a complaint with the U.S. Office of Special Counsel alleging that his transfer was prompted by testimony he gave to the U.S. Government Accountability Office, which conducted a separate review of HUD's overall monitoring activities.

The Inspector General's report said HUD could not adequately justify the number of Community Builders hired nor their salaries, which in many cases were tens of thousands of dollars higher than the pay given to veteran civil servants who monitored HUD's grantees.

"HUD allocated a large amount of its resources to outreach and customer relations in the form of higher grades, travel and training funding, and personnel," the report stated.

More than half of the Community Builders interviewed by the auditors said they spent most of their time on public-relations activities.

"Considering that 228 Community Builders came from HUD's monitoring side, there is an appearance HUD favors the outreach and public relations over the monitoring and compliance function," the report said.

The Community Builders interviewed by the auditors lacked knowledge of HUD's grant programs, the report said, and in some cases improperly interfered with housing transactions between local officials and nonprofit groups, resulting in the loss of millions of taxpayer dollars.

HUD, in its response to the 1999 audit, said the report was "misleading" and denied that the agency had violated hiring protocol.

It noted that the program was widely praised by local officials and others interviewed by Ernst & Young, which was under contract with HUD to conduct an interim review.

The audit report faulted HUD for using the Community Builders to carry out a public-relations campaign on behalf of HUD when Congress threatened to slash the agency's budget. Senior officials directed the employees to reach out to local media and "arrange press conferences, conference calls, and telephone interviews," the audit said.

The Inspector General's report also said Mr. Cuomo's staff took unusual steps to hinder its review, stating that HUD senior management "told employees not to talk to us during our planning stage" and "circulated 'questions and answers' for employees to use when we interviewed them."

Investigators said senior HUD officials also asked the Inspector General's office to identify the HUD employees interviewed by auditors.

"When the request came in, everyone wondered why the department needed it. Why do they need to know who spoke with the auditors?" said a person who was with the Inspector General's office at the time.

Saul Ramirez, a deputy secretary under Mr. Cuomo, said the request for the names was "standard procedure" and intended to help headquarters organize the schedules of field staffers involved in the auditing process.

Write to Jacob Gershman at jacob.gershman@wsj.com

Andrew Cuomo and His Deadly Court Cartel

Andrew Cuomo

AG Candidate Carl Person:CUOMO HELPED TO CREATE THE MORTGAGE FRAUD

Posted on October 10, 2010 by Ron Moore
LINK

According to Libertarian Attorney General candidate Carl Person, Andrew Cuomo , as HUD Secretary helped to create the mortgage fraud and predictably has done nothing to stop banks from using false affadavits. Person says “Andrew Cuomo has a duty as NYS Attorney General to start lawsuits to stop Bank of America, JPMorgan Chase, GMAC, Countrywide, Wells Fargo and other lenders from using the New York courts to foreclose mortgages on homeowners in NYS.”

Person explained that “these banks and lending institutions have been filing false affidavits in New York foreclosure actions for several years and have been illegally obtaining judgments of foreclosure and illegally selling the homes of many tens of thousands of homeowner victims.” Presently, there are approximately 80,000 foreclosure cases in the New York courts, with more being filed every day.

“Cuomo is trying not to get involved”, said Person, “because he helped to create the mortgage fraud when he was Secretary of Housing and Urban Development (HUD).” Person also stated that “Cuomo should have recused himself and let someone else in his Office of New York State Attorney General be assigned the responsibility for ensuring that mortgage foreclosure fraud is stopped in NYS.”

Person went on to say that the banks, servicing companies, and other participants in the illegal activities should be penalized by not being able to use the New York courts to commence or pursue any foreclosure actions in New York State as to any residential mortgages, and that the banks should not be able to assign the residential mortgages to anyone else for the purpose of starting foreclosure proceedings in New York State.

What needs to be done, according to Person, “is to require the banks to enter into modification agreements with residential homeowners decreasing the monthly payment to the current low mortgage rate of 4.5% or so and decreasing the principal amount of the loan to 90% of the present value of the property.” As to each property for which this takes place, the bank would then be able to enforce the modified mortgage in the New York courts.

“Everyone can see that Cuomo is unable to serve honestly as New York State Attorney General, and this should disqualify him from becoming Governor of New York State,” according to Person.

Cuomo’s running mate for NYS Attorney General hasn’t done anything in Albany to stop the fraud, and can be expected to do nothing except benefit the banks.

Person said “If elected, I would commence the needed lawsuits to stop this devastating fraud on the NYS courts and homeowners.”

From Betsy Combier: If the banks dont condemn your property, then the Courts will. It's all the same land grab. Is anyone checking into Andrew Cuomo's connections to New York State Surrogates Courts, where property of the dead are grabbed from the next of kin by the State under color of law?

In Defense of Eminent Domain
Michael Cardozo, Corporation Counsel, Columbia Law Review

NY Court of Appeals Upholds Eminent Domain
Posted on November 24, 2009 by Mark Axinn
LINK

From the Institute for Justice:

WEB RELEASE: November 24, 2009

Media Contact:

Christina Walsh (703) 682-9320

Arlington, Va.—The New York Court of Appeals, the state’s highest court, today announced that it would uphold the decision of the Empire State Development Corporation (ESDC) to condemn privately owned homes and small businesses to make way for wealthy developer Bruce Ratner’s so-called “Atlantic Yards” development of 16 mammoth skyscrapers centered around a basketball arena.

“Today’s decision puts homes and businesses throughout New York at risk of condemnation,” said Dana Berliner, a senior attorney at the Institute for Justice (IJ), which filed a friend-of-the-court brief in the case. “Courts have a duty to look carefully at the government’s claim that it has the right to take someone’s home or business, and the Court of Appeals has simply refused to do that.”

While upholding the taking, the New York court did not go so far as to embrace the United States Supreme Court’s much-maligned reasoning in the 2005 Kelo v. City of New London case, which held that the U.S. Constitution allows governments to condemn property for economic development alone. Instead, the Court found the takings were for a “public use” because of the ESDC’s determination that the area to be condemned was “blighted”—a determination that was based on a study paid for by the would-be developer and not even initiated until years after the Atlantic Yards project was announced.

In a dissent, Judge Robert Smith excoriated the majority for abandoning its duty to critically examine the ESDC’s assertions. “To let the agency itself determine when the public use requirement is satisfied is to make the agency a judge in its own cause,” Judge Smith wrote. “I think that it is we who should perform the role of judges, and that we should do so by deciding that the proposed taking in this case is not for public use.”

“The developer’s study did not find anything a normal person would call ‘blight,’” explained Berliner. “Instead, it found that the neighborhood was ‘underutilized’—in other words, that the developer could think of bigger things that could be built where these homes and businesses are. If that is all that is necessary for condemnation, then literally every piece of property in New York is at risk.”

The majority’s opinion frankly acknowledges that the court may be opening the door to “political appointees to public corporations relying on studies paid for by developers . . . [as] a predicate for the invasion of property rights and the razing of homes and businesses.” But, it says, preventing such abuses is not the job of the courts, advising New Yorkers to look to their legislature to fix any problems.

“New York is one of only seven states that has failed utterly to pass any kind of eminent-domain reform in the wake of the Kelo decision, and today’s opinion will only make things worse,” said IJ Staff Attorney Robert McNamara. “The state courts are looking to the legislature to fix the problem, while the legislature is apparently looking to the courts. And that means more and more New Yorkers will be looking at condemnation notices.”

“Property rights are as sacred to citizens of New York as they are to Americans nationwide, and New Yorkers have rightly looked to their courts to protect those rights,” concluded IJ President and General Counsel Chip Mellor. “Today’s opinion should be a clarion call to the state legislature that they cannot avoid this issue any longer. Now is the time to give state residents the reform and protections they desperately need.