Tuesday, January 18, 2011

L.A. Times: FBI probes L.A. Housing Dept.'s actions in affordable housing project (Repost of 4/9/10 Article...RELEVANT, AGAIN?)

Here's your L.A. City Council & City Hall doing something about the housing and homeless problem! It's an L.A. Times article from 4/10, but am re-posting now, not only to remind you of how the City of Los Angeles handles money and the municipality as a whole -- but since my ears are ringing LOUDER than the day after a Van Halen concert with questions asking, "Did you hear about the FBI investigation into the Los Angeles Housing Department (LAHD)?" ZD has been around long enough to know when it's more than silly jibber-jabber. AND, I heard LAHD Asst General Thug is being Mr. Nice Guy to everyone in the department now. (Kinda like, "Hey, don't rat me out to the FBI, I'm a nice guy." TOO LATE, BOB!)

FBI probes L.A. Housing Dept.'s actions in affordable housing project

$26 million was funneled to a development company officer who city officials knew was under criminal investigation for misuse of public funds elsewhere.

April 09, 2010 | By Jessica Garrison
The FBI is investigating an affordable-housing deal in which Los Angeles officials channeled $26 million to a development company officer who they knew was under criminal investigation for alleged misuse of public funds, city officials said Thursday.

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

The $26 million went toward construction of a 92-unit apartment building near downtown L.A. for seniors, some of them homeless and disabled. Though ready for occupants, it has sat empty since December while many prospective tenants live in shelters or substandard housing.

The city's Housing Authority, concerned about irregularities in the deal, has refused to release money that would pay the tenants' rent. Without that rental income, the developer, Enhanced Affordable, could be forced into default. In turn, the city could be on the hook for millions of state and federal dollars that it helped arrange for the developer, City Controller Wendy Greuel said in an interview Thursday. She added that the way officials handled the deal "defies comprehension."

But advocates for the homeless are incensed for another reason. They say it is inexcusable that the city is allowing a new building to sit vacant while homeless seniors suffer.

"It's terrible. It's a travesty. These people are sick . . . some of them will die prematurely without housing," said Ruth Schwartz, executive director of Shelter Partnership, which helped find homeless seniors for the project.

She added that she wants the city and the mayor to find "the political will" to work out the red tape and "help move the people in."

The controversial deal was the subject of an audit released Thursday by Greuel's office.

FBI agents have requested notes and documents gathered during the audit, the controller's office said.

An FBI spokeswoman said the agency could not confirm or deny any involvement in the matter.

The city agency involved in the deal is the Housing Department, which oversees compliance with rent control laws and aids construction of privately run, affordable apartments. The Housing Authority, a separate agency, manages federal Section 8 rental vouchers and city-owned housing projects.

The audit found that in 2007 and 2008, Housing Department officials "blatantly disregarded information that . . . one of the partners was under federal investigation."

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