Saturday, May 22, 2010

BEST OF LA DAILY BLOG: Eric Garcetti's Affordable Housing Project Investigated by F.B.I. (Oops, Looks Like Mr. Perfect, ISN'T!)

Since this blog is experiencing it's largest viewership ever, and it is a lot of NEW readers...Zuma Dogg wanted to make sure everyone knows about THIS little ditty about Mr. Perfect, Eric Garcetti. He's the L.A. CIty Council President who presided as "leader?" of council as the city just slid into the toilet.

ORIGINALLY POSTED: SATURDAY, APRIL 10, 2010

PIECES COMING TOGETHER ON FBI INVESTIGATION Into Affordable Housing in Former Mayoral Hopeful Eric Garcetti's District

Will do a more detailed update later, but here's how it all unfolded last night (Friday 4.9.10) while Kevin James discussed the issue and ZD called in to discuss and it unraveled for Eric, from there. While Kevin was discussing it, I remembered Prop 1C money was to be used for Emergency Shelter for Senior Disabled and their children...so I hit the BatComputer...and YES, OF COURSE Prop 1C money was used for this. But here is some speculation on why FBI might have hopped on the city controller's audit so quickly. David Rubin, developer of the Bonnie Brae Village project in Eric Garcetti's district is also President of CDR Financial Products, LLC (David Rubin/President) - UNDER INVESTIGATION from FBI and there was an SEC - Settlement Enforcement Action. CDR specializes in municipal-busting products such as credit swaps and municipal reinvestment. So the good thing about attending the most miserable streak of city council meetings ever is that when little tid bits are thrown out there, like the surface story in L.A. Times, all the old meetings and agendas start scanning in my brain and the pieces come together, y'all! So I remember when the LACERS team said the BIG reason the city lost BIG pension money was and I quote, "a big reason was Henry Cisneros Workforce Housing." Mr. Cisneros swore in Mr. Garcetti when the voter made the tragic mistake of re-electing him this past year. So maybe Mr. Rubin's connections as President of a municipal investment company specializing in credit swaps, allowed him to funnel pension money into some stuff and in return, maybe this project gets approved and bamboozled.

  1. LACERS said BIG pension loss was H Cisneros project. Cisneros tied to Garcetti. Garcetti approved housing project by D Rubin, Pres of CDR.
  2. DAVID RUBIN is President of a Financial Products firm (Municipal Reinvestment/Credit Swaps) under FBI investigation. Eric did deal with him!
  3. David Rubin is Pres of CDR Financial Products. Specializing in CREDIT SWAPS AND MUNICIPAL REINVESTMENT. LACERS lost BIG in CIsneros project.
  4. Maybe FBI jumped on L.A. Controller's audit of Housing in @EricGarcetti's district is cause CDR Finacials under investigation: D Rubin/Pres.
  5. $6.4 mil Prop 1C $ used for FBI investigated housing in Garcetti's district. Company D Rubin is President of also under FBI investigation.
  6. LACERS panel said "a BIG reason" city lost big pension money was over Henry C HUD workforce housing. Was only example specifically cited.
  7. CDR Financial Products, LLC (David Rubin/President) - UNDER INVESTIGATION from FBI and there was an SEC - Settlement Enforcement Action.
  8. NOW STREAMING: Zuma Dogg FRIDAY NIGHT FOLLOW UP CALL to KRLA Kevin James Show on FBI Investigation into @EricGarcetti's Housing Project.
  9. KEVIN JAMES asking if L.A. City Council President ERIC GARCETTI has been question by FBI over disabled senior housing investigation.
March 15 (Bloomberg excerpts) -- DAVID RUBIN: While serving as a commissioner of the housing authority known as HACLA from 2002 to 2004, Rubin formed a company called Enhanced Affordable Development Co. to develop subsidized housing.

Enhanced Affordable’s principals stand to collect a $2.4 million developer fee, city records show. ZRS Construction Management Inc., which built the project, would receive $1.3 million.

David Rubin, accused of rigging hundreds of investment contracts for local governments across the U.S., is at the center of investigations by city and federal authorities into a Los Angeles housing development.

The $31 million subsidized project for the poor and homeless was put on hold by local officials after the Oct. 29 federal criminal indictment of Rubin, 47. He is the founder of Los Angeles-based CDR Financial Products Inc. and one of the first targets charged in a three-year Justice Department probe of alleged anti-competitive practices in the $2.8 trillion municipal bond market.

Former city Housing Department General Manager Mercedes Marquez, who headed the agency when it recommended Enhanced Affordable and Bonnie Brae Village for city council approval in 2008, is now an assistant secretary of the federal department of Housing and Urban Development, or HUD.

E-Mail Chain

The Federal Bureau of Investigation got involved in January and is examining whether a city employee leaked information about the audit to Enhanced Affordable, according to people with knowledge of the inquiry who spoke on condition of anonymity.

City officials and the FBI are examining an e-mail chain that began on Nov. 25, when Timothy Elliott, the acting manager of the department’s major projects division (Affordable Housing Trust Fund/AHTF), forwarded Greuel’s memo authorizing the audit to Gelman at Enhanced Affordable. A copy of the e-mail was among the records released by the city.

“That would be inappropriate to be sharing that sort of information,” Los Angeles Housing Department General Manager Doug Guthrie said in an interview. Guthrie was appointed to the job in November. Elliott declined to comment for this story.

Gelman forwarded the memo to Sarah Dusseault, a senior policy aide in City Council President Eric Garcetti’s office, asking for help, the e-mail chain shows. Gelman declined to comment.

Dusseault, a former Los Angeles Deputy Mayor for housing from 2002 to 2004, received $3,500 from Enhanced Affordable for consulting work in 2006, three months before she went to work for Los Angeles City Council President Eric Garcetti, city records show. [ZD: Must have been a really rough three months, while unemployed. Hope you filed for benefits!]

Dusseault said in an e-mail to Bloomberg that she reported the payment in an October 2006 filing with the city Ethics Commission. She wrote that she doesn’t recall receiving the memo. [ZD: HUH...HUH...HUH...you get a memo about an audit of this nature, but you don't remember receiving it? If she didn't work for city hall, I almost wouldn't believe it.]

The review by the city has halted tenant screening at the 92-unit project for low-income people 62 or older. FULL ARTICLE.

READ MORE ABOUT DAVID RUBIN: The person Eric Garcetti and City Hall did an affordable housing deal with, now under FBI:http://ow.ly/1wMof
BONUS MATERIAL: ORIGINAL LA TIMES ARTICLE WITH LESS DETAILS (did not even mention it was Garcetti's district) that triggered a Zuma Dogg FURTHER investigation (of the details you just read above.) Here is the more surface LA Times coverage:

FBI probes L.A. Housing Department’s actions in apartment project for homeless seniors
April 8, 2010 | 2:29 pm - latimes.com

The FBI is investigating an affordable-housing deal in which Los Angeles officials channeled $26 million to a developer who they knew was under criminal investigation for alleged misuse of public funds, city officials said Thursday.

The developer, David Rubin, was indicted last fall in New York for alleged bid-rigging and fraud, charges unconnected to the L.A. project

FULL ARTICLE:



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