What Does the Dallas Outcome Tell Us About HUD? What Does It Say About Feds in General?

Categories: Schutze

hud.jpg
I'm headed out of town for a week's vacation. Spent a good deal of yesterday thinking about the outcome in the HUD case against Dallas. As you know by now, HUD folded a couple days ago and withdrew its racial segregation allegation against the city. If you were here yesterday, I already bored you with how surprised I was by this denouement in a story I have covered for five years.

But enough about me. I spent a good deal of yesterday trying to see this story as others might, especially the individuals at City Hall who were singled out by name as complicit in acts of racism. Having tasted that lash once or twice myself, I know how keenly it stings. It occurs to me that they deserve to be singled out one more time by name but this time for having the charge dropped. After all, these charges weren't just leveled against a building. They were leveled against people.

See also: Dallas Won. HUD Lost. Oops.

One is Karl Zavitkovsky, the city's director of Economic Development. Another is Jerry Killingsworth, former head of housing for the city. A third is former City Council member Angela Hunt, although she was never accused directly of anything, only slimed somewhat by being mentioned in the wrong paragraph.

I don't expect HUD to say this, but somehow I feel as if I ought to. When HUD folded its hand and agreed to drop its housing discrimination case against Dallas -- a stunning victory for the Dallas city attorney and city manager -- it withdrew the basis for any allegation or suggestion that these individuals ever engaged in acts of racial discrimination. I'm not a lawyer. But for my purposes as a layman, HUD has cleared their names.

Here's the other thing I found myself thinking about. See if you can think about it. Think about the sheer admission of incompetence and ham-fisted oppression this entire chapter becomes. The entire Fair Housing division of the U.S. Department of Housing and Urban development devoted uncountable man-hours of investigation and lawyering over a four-year period to the accusation by two developers, Curtis Lockey and Craig MacKenzie, that Dallas had engaged in systematic racial discrimination over a 10-year period and had misallocated federal funds to do it.

Last year HUD brought a 29-page "finding of non-compliance" against the city. Since then, HUD and city officials have been negotiating a settlement.

The settlement agreement signed by the city and HUD two days ago was an almost complete rout for HUD, a retreat from all the most basic allegations and demands of the original letter. And yet, beyond a few vague references to unspecified elements of the letter found to be "incorrect," HUD so far has offered no public explanation of what went wrong.

So did they really get it that wrong? Or were they right on the facts but caved on the politics? And which would be worse, do you think? A massive federal agency puts an entire city through years of grief, and then they say, "Oops?" And it's over?

I said in my item here yesterday that in the wake of this defeat for HUD no local government in America should take a plea and settle with HUD on one of these fair housing non-compliance complaints. Westchester County in New York did it five years ago, and HUD has ragged them with it ever since.

A new guy won election as the chief county official there after the settlement, campaigning on the assertion that his predecessor had been stupid to settle. This Dallas decision makes that guy right.

The largest issue for me, however, is the question of competence. I don't want to believe this saga is emblematic of the entire federal government. I really can't imagine the FBI doing a probe of a county official for five years, winning an indictment and then at the last minute doing an oops and letting the guy go free because, you know, oops. (Knock on wood.)

Lockey and MacKenzie are still in court, no matter what they tell you over at The Dallas Morning News. Their whistle-blower suit still has the potential to force HUD back into this picture. That's actually what happened in Westchester: HUD tried to do an oops there before they even investigated, but the judge in the whistle-blower lawsuit shamed them into getting their asses into court to enforce their own laws. It could happen in Dallas.

In the meantime, though, I'm just dumbstruck by the sheer wooden-headedness of the whole HUD effort. I don't know if people at HUD have badges. If they do, somebody needs to collect them. When this gang unholsters, no chicken, dog or Holy Sister is safe.


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44 comments
hudisajoke
hudisajoke

"Lockey and MacKenzie are still in court, no matter what they tell you over at The Dallas Morning News. Their whistle-blower suit still has the potential to force HUD back into this picture. That's actually what happened in Westchester: HUD tried to do an oops there before they even investigated, but the judge in the whistle-blower lawsuit shamed them into getting their asses into court to enforce their own laws. It could happen in Dallas." 


Its even worse than you describe Schutze: HUD was an expert witness for Westchester County until an honest Judge called HUD out for not enforcing their laws. Then they were forced to act. 


I'm not sure you can find a Judge that will handle this subject matter honestly for these guys. This is the South........


Yes, Astorino is dead right, his predecessor was an idiot for signing a settlement with HUD. 

ColonelAngus
ColonelAngus

HUD, like so many federal spending programs, has no Constitutional authorization.  Abolish it.

holmantx
holmantx topcommenter

The agreement will be voided by the Supreme Court if they strike Disparate Impact as a metric for discrimination based upon race.  The City will be able to disregard the compliance orders set forth in it.  It is that big of a win.  The taxpayer missed a bullet, and thank God for that.

There was no racial discrimination.  

Only a pork fest gone wild.  And the South Dallas politicians led the charge.

ozonelarryb
ozonelarryb

Great graphic Jim.

HUD musta used the same crack investigators that investigated Madoff, Enron, and Harken.

ColonelAngus
ColonelAngus

"And yet, beyond a few vague references to unspecified elements of the letter found to be "incorrect," HUD so far has offered no public explanation of what went wrong."


HUD finally realized that they were up against a World-Class City.

h_mole1
h_mole1

Councilperson Kingston is right on point:


https://www.facebook.com/PhilipTKingston 


"I would never suggest that Jim is insincere, but I do think there are some fair housing lawyers inside HUD who had no desire to settle whatsoever and who might be tempted to defend themselves against charges of being incompetent fools."

http://blogs.dallasobserver.com/unfairpark/2014/11/dallas_hud_outcome_fair.php


I know for a fact Kingston is correct. There were a few very ethical, very competent female Civil Rights Attorneys in FHEO that were fully committed to taking Dallas to the mat on these charges, based on the evidence, but they were removed from their enforcement positions with Dallas over the last couple of months so Bryan Greene and his superiors could cut this deal with Dallas. Take that one to the bank! 


See where this goes now. 

MaxNoDifference
MaxNoDifference

I love HUD's revised logo at the top of the article.

Lorlee
Lorlee

When I served on Community Development -- I suggested it would be cheaper and probably more effective to just have one person walk down a street and hand out checks for repairs.  Sure some might spend it foolishly, but I bet more would be spent on actual repairs than is the case now with the huge housing bureacracy which is paid out of CD funds.  The City has no skin of its own in the game. 

rmack
rmack

I wouldnt say HUD's folding clears anyones name, its just that HUD didn't have the backbone to do its job. But, I understand how you could jump to that conclusion. Bryan Greene and Castro care more about their political futures than doing the job they promised to do by taking their positions at the federal agency. Everyone knows HUD is just a place holder and platform for Castro to be the VP nominee with Clinton, thats all he really cares about. Greene cares more about similar objectives. 


As you stated yesterday, nobody should ever settle with HUD again, if so they are  fools. Just fight to the end and know they will never cut off funding or take the necessary measures to enforce the laws they are mandated to.


Your last statement is right, someone just needs to shut this agency down, a computer system can dole out the money with no oversight or enforcement. 


claidheamh-mor
claidheamh-mor

Remember Abraham Lincoln's famous words "OF the people FOR the people and BY the people? Many, if not all, of our elected leaders in Washington have forgotten that they work for US, not vice-versa.

PerryMoore
PerryMoore

You guys wanted a king, and you have one. The fact that your king is a bureaucracy should scare the hell out of you, because this bureaucracy serves to shield from direct blame the people that comprise said bureaucracy. You named the individuals that were accused of racial discrimination. Right out there for all to see. Now, who's to blame for wasting the taxpayers' money on a five-year-long, dead-end case? Stomp that hill, Mr. Schutze, and let's watch the ants go running everywhere.

ivyhall
ivyhall

I don't know Jim ,every time you talk about HUD all I can visualize is Paul Newman in his prime...

inquiringmindlessly
inquiringmindlessly

@ColonelAngus  Thank you for your well-reasoned argument: since interpretation of the Constitution is settled, we can abolish the Supreme Court and save some time and money!

Guesty
Guesty

@holmantx Settlements are agreements.  They don't depend on either side being right or wrong, it is a compromise under which both sides agree to a resolution regardless of the merits.  The agreement will be enforceable regardless of what the Supreme Court does with disparate impact.

buddyg3
buddyg3

@holmantx


"There was no racial discrimination."


Which is why they had to agree to what they did to settle, right. Also why Gonzalez said, if they didn't sign this settlement it would have cost them tens of million of dollars. 


Is there any shred of desire to seek the truth by you or are you just a tea party robot spouting party lines nonstop?  


And this must be your full time job. Must have great pay......... 


holmantx
holmantx topcommenter

@Guesty @holmantx

How does HUD enforce the "Affirmatively Furthering Fair Housing" Requirement if "significant disparate impact" is removed?

The only purpose of the "Affirmatively Furthering Fair Housing" requirement is to employ Disparate Impact as a metric.

"HUD’s adoption of the final “disparate impact” rule this month is not technically an implementation of the AFFH requirement, but it is a crucial tool for HUD enforcement of the AFFH requirement."

holmantx
holmantx topcommenter

@buddyg3

Give it a rest.  The City would have had to hire the same bunch who are representing the state to take it to the Supreme Court.  That costs millions.

And what we agreed to didn't have anything to do with racial discrimination since it was couched in compliance with "further affirming fair housing", which relies upon Disparate Impact, which looks like it will not survive the current appearance before the Supreme Court.

Besides.  The only discrimination to be had around here is discrimination based upon class, not race, and Disparate Impact doesn't measure that.

Ask yourself - why do neighborhoods form in the first place?

then try and influence the hood based upon the correct answer.  And that has been the problem all along.

We are trying to hit a problem with a race hammer when the problem is Class (income, education, security and schools).

In fact, it's not even a problem.  It is just the reason why neighborhoods form in the first place.

holmantx
holmantx topcommenter

IOW it is not enforceable 

hudisajoke
hudisajoke

@holmantx


"Tens of millions in penalties", not legal fees. They have one of the largest internal laws firms in the country. Salaried, as well, they get paid no matter what, by Dallas taxpayers. 

buddyg3
buddyg3

@holmantx


You just showed your ignorance again. This has nothing to do with people choosing where they live. It has to do with laws surrounding the use of federal funds in regards to housing. There never would have been an issue or case if it had been as stupidly innocent as you describe. Please quit with the same party lines that have been spewed for decades, its getting nauseating. 


I have to get back to work now Edward, so have fun commenting the rest of the week. 

mavdog
mavdog topcommenter

clearly you do not understand the meaning of the word "binding".

And the part about "Affirmately Furthering Fair Housing" is but one small part of the Settlement.

You're wrong.

holmantx
holmantx topcommenter

@hudisajoke @holmantx

They'd go outside.  They do not have the expertise.

And HUD ain't gonna fine anybody now.

holmantx
holmantx topcommenter

@buddyg3


There Are None So Blind As Those Who Will Not See

holmantx
holmantx topcommenter

@mavdog

If you were correct, HUD would have fined Dallas millions.

And you can't enforce an illegal clause - as in "whites only"

jst01
jst01

@holmantx @hudisajoke


They didn't go outside to fight HUD recently to get here. The "penalties" spoken of above proves HUD had the goods on Dallas, its just that HUD is concerned more with politics than doing their job, so they ran off and shut it down. Dallas still had to agree to the this settlement because they knew HUD had the  goods. 

mavdog
mavdog topcommenter

No, it is ridiculous to conclude "If you were correct, HUD would have fined Dallas millions".

Clearly you haven't understood Jim's columns, or the comments by the astute posters on why HUD walked away and let Dallas off the rack.

Bottom line: you reach to invoke disparate impact, but it is not in the Settlement, it is not in the HUD documents, it is not stated anywhere in the "Affirmatively Furthering Fair Housing" regs as contained in the Federal Register.

Give it up Don Quixote.

holmantx
holmantx topcommenter

@jst01 @holmantx @hudisajoke

Nov. 22 of last year HUD sent the city a 29-page Letter of Findings of Non-Compliance. 

The city responded six weeks later with its own 59-page missive disputing every one of HUD’s findings.

HUD chickened out.  They folded like a cheap suit.  It's over.  See the document above:

“In order to expedite just resolution of the matter and to avoid further administrative procedures or litigation over the remaining matters, the parties have agreed to enter into this Agreement,” says the document signed by Gonzalez, Ernst and Bryan Greene, HUD’s general deputy assistant secretary for Fair Housing and Equal Opportunity. “The parties agree that all issues, findings, concerns, and questions in the Letter are fully and finally resolved and superseded by this Agreement.

I think the City can just file a short report every six months saying they aren't racially discriminating.  If HUD doesn't like it, they can always run an administrative hearing, but then they run into having to prove Disparate Impact, and they are not going to do that, for the reasons already mentioned.

The monkey's on HUD's back to prove what they assert, NOT the City to try and prove a negative, which is why Disparate Impact will be struck by SCOTUS.  The City cannot be put in the position of trying to prove they are NOT practicing racism.  Judges are not going for that and HUD knows it.

holmantx
holmantx topcommenter

@mavdog @holmantx @buddyg3

The Settlement: "The strategy shall include actions that affirmatively further fair housing"

From: HUD Enforcement of the "Affirmatively Furthering Fair Housing" Requirement - "a complainant must show a significant disparate impact"

If Disparate Impact is struck by SCOTUS, the Settlement is voided.

holmantx
holmantx topcommenter

@mavdog

The Settlement: "b) The City shall develop the foregoing strategy as part of its updated Analysis of Impediments to Fair Housing Choice, which the City shall submit to HUD as part of its obligation to affirmatively further fair housing, no later than May 1, 2015. The Analysis of Impediments will identify and consider current demographic patterns of the City."

If SCOTUS strikes DI, the City can ignore the obligation because its

not

enforceable.

Disparate Impact is crucial to enforcement of AFFH, according to HUD.

And since you are not going to recognize this FACT, you are just blowing smoke, and you know it.

mavdog
mavdog topcommenter

@holmantx @jst01 @hudisajoke

From the settlement:

"If any provision of this Agreement is now or becomes impossible or unlawful to perform, the failure to perform under that provision shall be excused and severed from this Agreement"

If the court rules against desperate impact, (regardless of its applicability to this agreement which we dispute), it will not affect the agreement's continued affect.

mavdog
mavdog topcommenter

@holmantx

fact: the Settlement does not mention the phrase "disparate impact"

fact: HUD regulation "Affirmatively Furthering Fair Housing" does not mention the phrase "disparate impact".

Fact: the Settlement never references the HUD "Affirmatively Furthering Fair Housing" regulations.

Fact: the Settlement is binding on both parties. 

those are the facts, and I don't smoke.

Don Quixote for sure.

holmantx
holmantx topcommenter

@mavdog

That is because it is in the enforcement of it, per HUD.

And the verbiage defining Disparate Impact is found in the AFFH Requirement.  

It is why HUD punted because there is another Dallas case whose outcome directly affects this one..

mavdog
mavdog topcommenter

@holmantx

so you cannot refute any of the facts that I spelled out.

How's HUD gonna enforce it?

the same way it enforces other Agreements.

If there is a violation and it is not cured, HUD can seek help from a Court. HUD can withhold funds. HUD can apply any sanctions that have been granted to it by law.

pretty much the same actions it takes anytime it needs to enforce an Agreement.

don't think this is their first rodeo....

holmantx
holmantx topcommenter

@mavdog @holmantx

But that requires the City submit a demographics study per the Settlement.  The City, in order to be in compliance, must demonstrate its actions move the race needle (ha!).  Hello Disparate Impact!

You know the one.  It's the thing that is presently under scrutiny by that other case going before SCOTUS.  If DI goes away then it cannot be demanded by this agreement.

give it up, man.

mavdog
mavdog topcommenter

@holmantx

The City, in order to be in compliance, must demonstrate its actions move the race needle (ha!).  Hello Disparate Impact!

you don't understand what "disparate impact" means when you make this comment.

you're inserting your desired conclusion ("disparate impact") when it is not mentioned.

a "demographics study" is not the same as "disparate impact".

"disparate impact" is not the same as demonstrating a measurable change in racial housing segregation.

so far all you have done is make assertions that are not based in fact, but are based on your presumptions. you make a conclusion and then attempt to find support. but there is not any support.

you're grasping at straws that don't exist. I've proven it to be true.

holmantx
holmantx topcommenter

@mavdog @holmantx

The Disparate Impact Rule

HUD’s adoption of the final “disparate impact” rule this month is not technically an implementation of the AFFH requirement, but it is a crucial tool for HUD enforcement of the AFFH requirement.

The rule codifies existing court interpretation that the Fair Housing Act reaches policies and practices that have the effect of discriminating, even if there is no allegation of intent. To prevail on such a claim in a HUD administrative proceeding under the new rule, a complainant must show a significant disparate impact.

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