In The News › Pay to play? This multimillion-dollar government contractor refuses to say

Feb 13, 2015

Source: NOLA.com | The Times-Picayune

Filed under: Contracting, Jefferson Parish

Pay to play? This multimillion-dollar government contractor refuses to say

By Ben Myers

NOLA.com | The Times-Picayune

February 13, 2015

A private company that receives millions of dollars every year from the Jefferson Parish Housing Authority is refusing to swear in an affidavit that it did not pay anyone to get its contract. Nor is the company identifying any of its subcontractors.

The Housing Authority’s board of commissioners decided in November to require these disclosures from its five professional-service contractors. The others complied, but Louisiana Housing Development Corp. responded that it is not obligated to do so, said Juan Patterson, the Housing Authority’s executive director since April.

In part, the resolution was designed to show whether “undue influence” was used to obtain the contracts, Patterson said. It passed 6-1, the dissenting vote coming from James Lawson, who acknowledged in an interview that he worked for Louisiana Housing about eight years ago. Lawson said he does not currently work for the company or any of its subcontractors. He would not say what he previously did for the company.

“Some people have an agenda, and I don’t know what their agenda is,” Lawson said. “I’m not part of that agenda.”

Louisiana Housing received $1.5 million from the authority in 2013, and another $2.4 million in 2014, according to a NOLA.com | The Times-Picayune analysis of Housing Authority check stubs. Its main role is running the Housing Choice Voucher Program, formerly known as Section 8, which subsidizes rent for low-income residents. The program is the authority’s primary activity, with 85 percent of the agency’s $38.6 million operating budget in 2013 dedicated to paying landlords of 4,080 units, according to the authority’s latest audit.

The company has run the program since at least 2003, records show. It won the job that year through a competitive solicitation and has worked under two contract extensions since then. The most recent was an extension in 2012, at a time when the Housing Authority was under scrutiny from the U.S. Department of Housing and Urban Development’s inspector general for mismanagement. With more than a year left on Louisiana Housing’s contract, the Housing Authority extended the agreement through 2018.

Under the contract, Louisiana Housing receives 90 percent of the funding that HUD gives the Housing Authority for administrative fees. The company has received $6.2 million since its 2012 extension.

But not all of that money is for services performed under its current extension, nor is it all for the Housing Choice Voucher Program. In 2012, for example, Louisiana Housing also received a single payment for $492,235, which it claimed as an outstanding balance for operating the authority’s Disaster Housing Assistance Program from 2007 to 2009, according to an invoice. The Housing Authority’s executive director at the time, Barry Bordelon, wrote that check less than three weeks before the HUD inspector general issued a withering report on the authority’s procurement and other practices.

Reached Thursday, Louisiana Housing’s owner, William Elmo Frazier, would not discuss the disaster-housing program, Louisiana Housing’s contracts or any aspect of the company’s operations or relationship with the Housing Authority. He said he is no longer involved with the company, other than as its owner.

“I’m retired. I don’t do any of it,” Frazier said. He would not say when he retired.

Patterson said his primary contacts with Louisiana Housing are Tracy Frazier Robinson, who handles legal and policy issues, and her husband, Robert Robinson, who is more involved with daily operations. When asked if Tracy Robinson is his daughter, William Frazier replied “maybe.”

Tracy Robinson did not respond to multiple voice messages and an email, and she refused to speak to a reporter after the Jan. 21 Housing Authority board meeting. Robert Robinson would not discuss any aspect of the company.
Frazier and Tracy Robinson have both contributed heavily to Jefferson Parish political campaigns, including $21,950 to former Parish President Aaron Broussard from 2002 to 2009. Robinson gave $14,000 to Broussard on a single day in 2007, according to state records.

Frazier, along with Louisiana Housing, contributed $7,500 to former Parish Councilman Louis Congemi and $2,500 to former Councilman Byron Lee from 2007 to 2011. Councilman Elton Lagasse received $7,500 over the past decade. Louisiana Housing gave $2,500 to Norma Broussard, the former parish president’s daughter-in-law, when she ran for judge in 2008.

Political contributions in Louisiana Housing’s company name come from its Gretna office, which also services residents enrolled in the voucher program. Signs in the hallway and lobby refer to the “Housing Program,” without mentioning the company’s name. Another sign reads: “Jefferson Parish Housing is not giving out applications.”

“It kind of raises some other questions”

Patterson said he sent the board’s disclosure affidavit to contractors within a week of the resolution. It calls on companies to swear they did not pay anyone to secure their contracts and, separately, that no part of the compensation will go to anyone for soliciting the job. As part of the same form, contractors were to list subcontractors and consultants working on Housing Authority matters.

Patterson said the authority’s auditor, architect, attorney and fee accountant promptly signed and notarized the disclosures. But Louisiana Housing responded that it will disregard the affidavit because its contract does not require the disclosures, Patterson said. He would not release the company’s written refusal because he said it might become the subject of litigation.

Louisiana Housing might have a strong argument, said Mike Purdy, a public contracting specialist who assisted the Bureau of Governmental Research with its landmark 2012 report on Jefferson Parish procurement practices. The company, he said, “could argue that the Housing Authority selected me based on a certain set of requirements and it did not include the requirement you didn’t pay somebody to help get the job.”

Still, he said, “It kind of raises some other questions about why they aren’t willing to do it.” The authority modeled its resolution after a Jefferson Parish ordinance, and Purdy said such disclosures are common. The subcontractor listing in particular “seems like it shouldn’t be a big deal for anybody,” said Purdy, who previously worked as the procurement manager for the Seattle Housing Authority.

Lawson said it’s “illegal, simple as that” for the authority to impose the disclosures on a company working under a contract that does not require them. But the commissioner who sponsored the resolution, Jonathan Liberto, said Louisiana Housing’s refusal to comply with the resolution is “ridiculous” because doing so costs nothing.

“Are they hiding something?” Liberto said. “All it would take is integrity and an ink pen.”

The authority needs to know the subcontractors working on its behalf to ensure they are “qualified, and not disbarred or suspended or under a cloud,” Patterson said. “The Housing Authority is ultimately responsible for the program and the outcomes of that program,” he said. “It’s important for us to know these things.”

Lawson further objects because the Jefferson Parish ordinance applies only to non-bid contracts, and he faulted the authority’s attorney, Joe Hassinger, for not clarifying the type of contractors that are subject to the parish ordinance. “It had nothing to do with what we do,” Lawson said at the authority’s Dec. 17 meeting.

“You didn’t point it out,” Lawson added. “It’s quite disturbing.”

Hassinger replied that he found the attack “highly offensive.”

“The affidavit this board asks its service providers to submit is very simple: I did not pay anybody to get the gig. Very, very fundamental sort of thing,” Hassinger said.

The affidavit provisions concerning payment are similar to standard HUD certifications that Patterson said are already included in the authority’s bid packages. If payment was made, the contractor must immediately provide full written disclosures, and any misrepresentations are grounds for terminations.

Patterson said he’s not sure whether Louisiana Housing submitted the certifications when competing for the job in 2003, or if the authority required them at all. “That is standard for almost all procurements housing authorities when they are using federal funds,” Patterson said. “It says basically that no undue influence, or improper influence to obtain contracts was used. That’s a principle the housing authority abides by, or should abide by.”

Ambiguous payment

Patterson said he discovered soon after taking his position that Louisiana Housing’s contract runs afoul of HUD procurement regulations. In most circumstances, HUD requires competitive procurement, documented support for the cost and maximum term lengths of five years. Louisiana Housing’s contracts over the past 12 years have strayed from these standards.

However, Louisiana Housing is not subject to typical HUD rules because of a decades-old policy that exempts certain administrative contracts. The policy recently changed to bring these contracts in line with other federal procurement regulations, but the change is not yet in effect, said HUD spokeswoman Patricia Campbell. That leaves the Housing Authority with no choice but to honor the Louisiana Housing contract, Patterson said.

It’s not clear how long Louisiana Housing has run the voucher program. The authority has three contracts on file dating from 2003. But in a board resolution accompanying it, even the 2003 document is called a five-year renewal. It was competitively procured, as evidenced by a scoring sheet showing that Louisiana Housing beat out the Kenner Housing Authority to run the program.

The 2003 contract initially provided Louisiana Housing with 85 percent of HUD administrative funding. The company quickly got a raise: An addendum effective on Jan. 1, 2004 increased the fee to 90 percent.
After reviewing other outsourced voucher programs and analyzing the cost of running it in house, Patterson said he concluded the fee should be between 77 percent and 82 percent.

The 2006 version of Louisiana Housing’s contract provides that compensation for additional services for new programs “shall be negotiated with the executive director.” This included the Disaster Housing Assistance Program, which aided hurricane victims from 2007 to 2009. The disaster-housing program was added to the contract in an amendment that didn’t include a specific compensation figure. Instead, the contract amendment called for Louisiana Housing was to “be paid administrative fees in the same manner” as the existing contract.

Yet in 2007, the authority’s executive director, Barry Bordelon, prepared a memo stating that Louisiana Housing would receive 100 percent of HUD funding for the disaster-housing program, exceeding even the 90 percent in the underlying contract.

Patterson, while emphasizing he is neither a lawyer nor an auditor, said Louisiana Housing “probably” should have received only 90 percent of the $5.4 million that HUD provided for administration fees. Yet a Louisiana Housing invoice for the outstanding balance claimed it was owed 100 percent of the funding. Bordelon cut a check for the entire balance, $492.235.19, the next day.

All told, Louisiana Housing received $12 million for the disaster-housing program.

Attempts to contact Bordelon were unsuccessful. Every phone number from a public records search was disconnected. Patrick Pierson, a former authority chairman who oversaw Bordelon, said he does not have a current number for Bordelon, and the authority’s former attorney, Wayne Mancuso, refused to speak with a reporter.

The disaster housing agreement is not the only way Bordelon helped Louisiana Housing get extra money. The 2012 HUD inspector general report said he directed $34,418 to Louisiana Housing to coordinate a pair of HUD grants without requiring documentation to justify the payments.

All told, the damning report said the authority incurred $655,907 in unsupported or ineligible costs under Bordelon’s leadership. It highlights a slew of procurement irregularities and other misdeeds, among them: failing to solicit competitive proposals and using the authority’s credit card for groceries and phones.

The inspector general also called out the authority for contracting with former state Rep. Girod Jackson III of Marrero. He later resigned from office and pleaded guilty to federal tax fraud involving a company that did business with the Housing Authority.

After the audit, Bordelon resigned under pressure, but the authority quickly rehired him as maintenance director. That prompted Parish President John Young to oust five board members, and their replacements fired Bordelon for good.

The board installed Pamela Watson as executive director, but District Attorney Paul Connick Jr. sued the authority, saying it had held illegal private deliberations before hiring her. Responding to the inspector general report and Connick’s lawsuit, the authority competitively solicited new contracts for an executive director, resulting in Patterson’s hiring, as well as legal and accounting services.

‘Big holes’ in contract

Amid the turmoil, however, the old authority board extended Louisiana Housing’s contract through 2018. The contract is dated May 16, 2012, 2 and 1/2 months before the HUD inspector general report was released.

At the time, the company was working under the 2003 contract and a five-year extension through 2013. With the latest termination date, the contract term is effectively 15 years, which is extraordinarily long, Purdy said.

All three versions of the contract are devoid of accountability measures. Under “services,” the contract lists a series of activities such as “placement and replacement of tenants with landlords” that are part of the program. That falls short of “good business practice,” Patterson said.

“In this particular case the deliverable is really just the general program administration,” Patterson said. “I would think for future contracts the Housing Authority will probably want to spell out some kind of reporting requirements.”

One such requirement would measure responsiveness to landlords and tenants, Patterson said. The company is starting to improve, he added, but the authority has limited enforcement authority, Patterson said.

“If I get a complaint that a staff member of (Louisiana Housing) somehow mistreated a customer, I can’t go directly to that staff member and say, ‘You mistreated this customer; therefore, I have to take action against you’,” Patterson said. “I have to go to the contractor or whoever runs the contractor’s program and say, ‘This is the kind of complaint I received.’ I can’t follow up to make sure he or she disciplined the employee, or that he or she retrained that particular employee.”

Patterson said Louisiana Housing is generally competent, and that HUD last year designated the authority a “high performer,” thanks mostly to Louisiana Housing’s administration. He said he meets and speaks frequently with Tracy and Rob Robinson, who he said are usually responsive and available. He credited them with providing monthly reports detailing leasing, inspection, expenses and other activities at his request – even though they are not required in the contract.

Yet Patterson said he knows little about the company’s inner workings, and he’s never met Frazier, the owner.

“I really know nothing,” Patterson said. “I have no personal, direct knowledge of who is doing what.”

Feb 13, 2015

Source: NOLA.com | The Times-Picayune

Filed under: Contracting, Jefferson Parish

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