Dallas City Hall Has Repaid $800,000 to HUD in the Last Year, but for What?

By Jim Schutze Mon., Jul. 21 2014 at 12:19 PM

District 14 City Council Member Philip Kingston

WOW. Looks like bigbexardaddy knows whereof he speaks.

Little over a week ago bigbexardaddy commented on an item I had posted here about the Bexar Street boondoggle, giving away a lot of detail that sure sounded like it came from inside City Hall, including a claim that Dallas, even in advance of getting hit with a big HUD judgment in the 1600 Pacific case (that will happen this week) , has already had to pay back "hundreds of thousands" to HUD this year.

Councilman Philip Kingston decided last week to check that out. According to the email exchange, the payback is even bigger than bigbexardaddy suggested. What we don't know: What the hell was it for?

Note that the email to Kingston telling him the city has repaid HUD the better part of a million bucks over the last year says that $625,814 of it was money related to something called Project Reconnect, which is supposed to provide housing for recently released felons, all of it paid for with HUD fun money even though it's run by the city. You may have seen mention of this program here last February, when a City Hall employee confessed to the FBI he had been scamming the program to provide himself with an apartment for $5 a month.

An even more lurid description is in the Justice Department press release at the time: apparently when the city employee learned investigators were looking at him, he hurriedly placed another person in his fraudulent apartment as cover, but in the process he also successfully sought sexual favors from the person. Later when that person cut him off, he vindictively removed the person from the program.

Project Reconnect still exists, but today if you look it up on the city's web page, you're going to find an official description that is something less than encouraging: "The suspension of the Project Reconnect operations was only temporary ... We are announcing the new office location for the Project Reconnect Program. ...Although we are operational, we will not be accepting any new client referrals at this time."

The apartment the guy got caught scamming the city out of was only $980 a month, of which he paid $5 a month. So at $975 a month that he was stealing, he would have had to live in the apartment for 53 years to add up to $625,814 that the city had to pay back HUD. That was before there was color TV in Hawaii. That was before there was HUD. That was even before the movie, HUD. So would it be unfair for us to wonder if there were misdeeds involving more than one dude?

I have questions in to all the usual suspects at City Hall to tell me why the city had to pay back this much money. I'll let you know. And, by the way, what does it mean when Justice Department press releases about Dallas City Hall are more lurid than we are?

Here is the original comment by bigbexardaddy9 days ago:

Killingworth told to resign May 7, 2013 during lunch hour with Ryan Evans, Suhm. Around130 in rage he started sending emails announcing retirement. He was expendable when his arrogance,incompetence finally got HUD's attention, including IG. Project Reconnect 2 indictments and hundreds of thousands ordered repaid so far. All programs all years being examined.
JK, Zavitkowsky, Evans, Suhm smug, over-confident, and got where they are by being smart enough and willing to do, say anything. Orgs and corps missing JK and worried about possible KarlZ, Evans departure are those enriched by the current no bid, no rfp, no competitive application system.

Here are Kingston's emails:

From: Philip Kingston [mailto:pkingston@kingstonpllc.com] Sent: Wednesday, July 16, 2014 5:17 PM To: Perez, Mariza Cc: Scott Griggs (griggslaw@gmail.com) Subject: refund to HUD

Has the city paid, repaid, refunded, returned, or otherwise transferred any funds to HUD within the last year?

From: Perez, Mariza Sent: Thursday, July 17, 2014 9:02:26 AM To: Mitchell, Bernadette Subject: Re: refund to HUD

Good morning Ms. Mitchell from Councilmember Philip Kingston's office. Please see email below from CM Kingston and let me know if you can assist with his questions?

Thank you,

Mariza Perez

Council Secretary

to Councilmember Philip T. Kingston

District 14

-------- Original Message -------- Subject: FW: refund to HUD From: "Perez, Mariza" To: "Kingston, Philip" ,Philip Kingston CC: "Sanchez, Connie"

Good morning Philip, please see response below...

Mariza Perez

Council Secretary

to Councilmember Philip T. Kingston

District 14

From: Williams, Chan Sent: Friday, July 18, 2014 5:49 PM To: Perez, Mariza Cc: Mitchell, Bernadette Subject: RE: refund to HUD

Hi Mariza - Bernadette asked me to help out with your request.

Yes. The City has repaid $811,181 to HUD within the last year (which includes $625,814 related to Project Reconnect). When funds are repaid to HUD, they are deposited back to the city's line of credit to be used for other eligible activities.

Chan Williams, Assistant Director

Office of Financial Services/Grant Administration

We Recommend

rippinitup

City Hall responded to DMN:

http://cityhallblog.dallasnews.com/2014/07/city-of-dallas-explains-why-its-repaid-more-than-810000-to-hud-over-the-last-year.html/

s.aten

Might it be related to the Bexar Street Project or Patriot's Crossing?

kingfish247

Paybacks to HUD doesn't necessarily entail actual fraud or theft. A jurisdiction usually has to payback for failure to meet a national objective and/or money expended for an ineligible activity. Or failure to meet a cross cutting regulation (ie. NEPA).

Of course fraud and theft won't help but HUD doesn't so much care what happened to the money as much as they care about what it was spent on and the outcome.

Also, HUD money to entitlement communities are doled out like a line of credit. If the City pays back HUD with non-federal/general city funds, the line of credit is restored. So, to HUD, a payback by a city in this manner is results in no net reduction in funds available to the city. A city can voluntarily opt to reduce its grant in lieu of a payback but the net loss to the city (for HUD purposes) is 2x the original amount....

Example: City spends $100k on chocolate in effort to help create 5 new chocolate making jobs. No new jobs are created and city has mountains of cocoa sitting around. City volunteers to reduce its grant by $100k. That's $100k for ineligible expenses and no outcome for original purpose (jobs for low/mod income persons) and ANOTHER $100k lost to do the right thing.

This is a long way of saying...HUD does not care so long as the city makes them whole. (HUD, from time to time, may prohibit a city from doing certain activities if they can't seem to ever do them right) Anyway, the outrage should be with the city because they have to use general funds to make up for an ineligible expenditure or failure to meet a national objective with the HUD funds.

dallasdrilling.wordpress.com

"other eligible activities" such as..............................

JimSX topcommenter

Notice also the characterization: this money all goes back into the city's kitty anyway to spend again in the future, so, no harm, no foul. As far as I can tell that's absolutely true. The HUD money is an uncounted drawer, and if you do get drunk and get caught with a bunch of it sticking out of your hip pocket at a dice game, they just put more back in the drawer for you.

qtzizzle

I guess we now know why the "ghost of Mary" is floating through the halls of 1500 Marilla! She's trying to cover up the mess she and other's have caused.

qtzizzle

"He was expendable when his arrogance,incompetence finally got HUD's attention, including IG."

Based on the above comment by "bigbexardaddy", the insider: If the HUD Inspector General is auditing all programs / all years for fraud which has been further confirmed, how does that affect the False Claims Fraud lawsuit by Lockey & Mackenzie?

86753099

OK, I'm taking bets DMN will not touch this story, for obvious reasons. So place your bets people?

fuzzyn

We need a line item breakdown of the entire $811,181 paid to HUD.

And we need it now!

IDISboogieman

Sorry, double post

86753099

"JK, Zavitkowsky, Evans, Suhm smug, over-confident, and got where they are by being smart enough and willing to do, say anything. Orgs and corps missing JK and worried about possible KarlZ, Evans departure are those enriched by the current no bid, no rfp, no competitive application system."

Zavitkovsky needs to go, he has been right in the middle of many of the issues here. Time for him to resign so he can, "spend more time with his grandchildren in the Carolina's".

maxim2

Kudos to Kingston for getting to the truth in this den of thieves........stay strong Kingston.

fuzzyn

"The apartment the guy got caught scamming the city out of was only $980 a month, of which he paid $5 a month. So at $975 a month that he was stealing, he would have had to live in the apartment for 53 years to add up to $625,814 that the city had to pay back HUD. That was before there was color TV in Hawaii. That was before there was HUD. That was even before the movie, HUD. So would it be unfair for us to wonder if there were misdeeds involving more than one dude?"

Yeah, this doesnt add up, so what was the money really for?

Somebody trying to hide the nut under the three nutshells............

ScottsMerkin topcommenter

Whoa, Shutze get to blog posts today? Who is out on vacation this week?

qtzizzle

@kingfish247

"This is a long way of saying...HUD does not care so long as the city makes them whole. (HUD, from time to time, may prohibit a city from doing certain activities if they can't seem to ever do them right) Anyway, the outrage should be with the city because they have to use general funds to make up for an ineligible expenditure or failure to meet a national objective with the HUD funds."

From a complicated perspective, Dallas has a duty to Affirmatively Further Fair Housing with all of their federal funds, so if they spent the money in a manner inconsistent with this (ineligible expenditure/etc), then certified otherwise, it amounts to fraud.

qtzizzle

@dallasdrilling.wordpress.com If it is "added back to the cities line of credit" doesnt that mean that HUD still had to provide an equal amount less to Dallas? Seems it would save HUD an equal amount to be paid in the future, so this amounts to lost dollars for Dallas.

terrible_swift_sword

@JimSX However, the City has "restored" HUD's money to it, which means that City General Funds (not HUD funds) have now been lost..........probably forever......on whatever non-qualifying expenditures HUD deemed had to repaid

qtzizzle

@JimSX Why dont us civilians have a deal like that? Kinda like Congress that can legally insider trade, eh!

fuzzyn

@86753099

Speaking of that, where are all the personnel changes AC Gonzalez promised as a condition to the support he needed/received to become the next CM? Although, he was right in the middle of all this, he needs to deliver on his promises now regarding personnel changes or he needs to be removed.