HUD to await outcome of U.S. Attorney's Office investigation into NYCHA before conducing its own probe

NYCHA threatens to charge Progress Queens as much as $100 million for FOIL copies of electronic documents already produced to Federal prosecutors.

By LOUIS FLORES

At a political victory rally at Foley Square on Wednesday night, Mayor Bill de Blasio (D-New York City) generously shared the stage with U.S. Department of Housing and Urban Development Secretary Julián Castro.

The rally marked the passage by the New York City Council of two text amendments to the city’s zoning laws that would give real estate developers the ability to construct larger apartment buildings “as of right” if developers set aside a fraction of new apartment construction for moderate-income tenants. A last-minute provision would extend tenancy to some low-income tenants ; however, developers would ultimately get to chose which fraction of the apartments would comprise the set-aside and which income tranche tenants would need to meet in order to qualify for the new apartments.

205 Avenue C in Manhattan was one building in a portfolio of project-based, Section 8 buildings NYCHA claimed it was forced to sell in 2014, because it could no longer afford to make capital repairs. However, an investigation by Progress Queens showed that some buildings in the portfolio, particularly in Brooklyn, received substantial repairs before the cash-strapped housing authority sold the buildings in a backroom deal to a consortium of developers with close political ties to the de Blasio administration.  Source :  Louis Flores

205 Avenue C in Manhattan was one building in a portfolio of project-based, Section 8 buildings NYCHA claimed it was forced to sell in 2014, because it could no longer afford to make capital repairs. However, an investigation by Progress Queens showed that some buildings in the portfolio, particularly in Brooklyn, received substantial repairs before the cash-strapped housing authority sold the buildings in a backroom deal to a consortium of developers with close political ties to the de Blasio administration.  Source :  Louis Flores

As Mayor de Blasio basked in the glory of over-riding the vast opposition from Community Boards and voters by strong-arming the City Council to pass the rezoning legislation, Secretary Castro’s presence provided the rally with political potency, but for opposing reasons.

On the one hand, this was Secretary Castro’s second, high-profile event with Mayor de Blasio is as many months. Secretary Castro was recently in the city for the annual count of unsheltered homeless New Yorkers during the overnight hours from February 8-9. Given Secretary Castro’s rumoured political maneuvering to become the vice presidential running mate for former First Lady Hillary Rodham Clinton, the joint appearances with Mayor de Blasio have helped to elevate Secretary Castro’s political profile in New York.

On the other hand, Secretary Castro has been sharing the political stage with Mayor de Blasio, even as the office of U.S. Attorney Preet Bharara has been investigating the mayor’s housing authority for possible financial fraud and lead paint poisoning. HUD, as the Federal housing agency is known, provides funding for the New York City Housing Authority, and, as a condition of that funding, the city must certify to the Federal government that the housing authority meets physical condition standards, as required by law. Because NYCHA lacks the financial resources to make capital repairs to its large portfolio of public housing and Section 8 apartment buildings, including an inability to address mold and lead paint, Federal prosecutors are investigating whether city housing authority officials falsely asserted that NYCHA was in compliance with Federal physical condition standards.

That both politicians shared a stage within walking distance from the U.S. Attorney's Office may have served to thumb their noses as Federal prosecutors. Nevertheless, the seriousness of the investigation by the U.S. Attorney’s Office is lost on HUD, which is not auditing NYCHA at this time, Progress Queens has learned.

Brian Sullivan, a spokesperson with the Federal housing agency in Washington, D.C., said that “HUD routinely monitors housing authorities, in terms of their compliance with Federal rules.” However, he added, he was unsure what the U.S. Attorney’s Office had discovered, were seeking to discover, or whether any action would proceed beyond the “discovery phase.”

Charles McNally, a HUD officer for the agency’s New Jersey and New York regional office, likewise said that HUD would wait until the U.S. Attorney’s Office concluded its investigation before HUD would determine any course of action, if any.

Since the investigation by the U.S. Attorney’s Office was said to have begun as long ago as October, HUD’s hesitancy to launch its own investigation has allowed Mayor de Blasio and Secretary Castro to escalate their political alliance during a time when Mayor de Blasio has faced criticism over his housing and homeless policies and the lateness of his endorsement of former First Lady Clinton’s presidential campaign.

NYCHA FOIL Update

For its part, NYCHA has signaled its intent to make it prohibitively expensive for Progress Queens to obtain electronic copies of public records the municipal housing authority has provided to the U.S. Attorney’s Office.

In response to a request made to NYCHA by Progress Queens under the state’s Freedom of Information Law for such records, NYCHA claimed that it was going to charge Progress Queens 25 cents per page, payment for which it demanded to be received in advance. Progress Queens has argued in reply that NYCHA has already collected these records electronically, and NYCHA should not incur any expense in providing duplicate electronic copies to Progress Queens.

Even though NYCHA appears to have stipulated that Progress Queens can receive public records that are not encumbered by privacy rights, Progress Queens improbably faces a possible copying charge as high as $100 million based on the incredible number of the documents NYCHA has already produced to Federal prosecutors. NYCHA has deluged the U.S. Attorney’s Office with over 400 million documents in connection with the Federal prosecutors’ investigation.

Reference Documents