April 28, 2006, HUD Secretary Alphonso Jackson stated in a speech that he cancelled a contract with a minority advertising firm because the contractor had said he did not support Bush. Later, Jackson in the face of mounting criticism said he made the story up. However, his chief of staff testified (as part of an Inspector General’s investigation) that Jackson had intervened in the contracting process when contractors had known Democratic ties. In keeping with the pattern of tame IGs who permeate the Bush bureaucracy, the HUD IG downplayed the issue by saying, "there were some limited instances where political affiliation may have been a factor in contract issues involving Jackson." Even if limited, such instances violate department policies and more importantly violate the law by establishing a political test, something that neither Jackson nor his IG seem to have any problems with.
Jackson is also currently being investigated by the FBI and the HUD IG for swinging a contract to a friend and golfing partner William Hairston. Through Jackson, Hairston got a job in January 2006 at NKA Contractors which ran the Housing Authority of New Orleans (HANO) which HUD had taken into receivership. Although NKA Contractors got good marks for its work, Hairston did not get along with its management, and shortly thereafter the company, not Hairston, was let go. Hairston received $93,755 from NKA from January to April 2006 and $392,000 from HANO from July 2006 to June 2007.
In February 2006, Jackson helped swing a direct contract to another friend Michael Hollis a prominent Atlanta lawyer and businessman to serve as the executive administrator of the Virgin Islands Housing Authority (which had been under HUD receivership since 2003). Despite a lack of experience in the field, Hollis was paid $450,000 (4 times as much as his predecessor) in 2006, including a $124,000 a year expense account.
It’s good to have friends.
On March 31, 2008, Jackson announced his resignation effective April 18, 2008. Heading a department that is called Housing and Urban Development, he very notably did nothing to prevent the housing crisis or deal with its aftermath. Taken together with his cronyism outlined above, Jackson, like so many members of the Bush Cabinet, was just awful. I have to wonder if the timing of his departure might not result from a desire to leave before an indictment.
A May 18, 2008 Washington Post article found other Republican friendly deals at HUD under Jackson’s leadership. A Fort Worth, Texas firm Harrington, Moran and Barksdale landed a $71 million HUD contract in 2004 to manage and sell hundreds of foreclosed homes. At the time, the company consisted of 3 employees, 2 of whom were Reagan era officials at HUD. Before this, it had done no more than manage a few apartments and had not done any government work. After this, it won some $282 million in HUD contracts despite questions concerning its qualifications. The contract specialist who raised the questions was reassigned and she subsequently retired. Another firm National Housing Group of Miami whose employees contributed to Republican candidates did $50 million in business with HUD since 2003, $41 million of which involved no-bid contracts. When another contract analyst investigated an $8 million charge by the company and found the company in fact owed the government $250,000, he too was reassigned and afterwards retired. A third firm Drayton, Drayton, & Lamar received $35 million in contracts since 2003 despite performing poorly. Its president was a friend of a Jackson associate.