- The Washington Times - Friday, June 16, 2000

HUD exploded into indignation earlier this week after House Majority Dick Armey charged the department was guilty of fizzling away tax dollars. Doug Kantor, the Department of Housing and Urban Development's acting deputy chief of staff, bleated: "What is bogus is alleging that this department has waste, fraud and abuse. No one's done more than this administration to combat waste, fraud and abuse. And any objective observer knows that." Unfortunately for taxpayers, it takes more than indignant tub-thumping to make HUD less than a four-star public nuisance.

On Feb. 7, HUD Secretary Andrew Cuomo announced: "Just a few years ago, our critics were calling for the elimination of HUD. Today, HUD is held up as a model of successful government reinvention." Mr. Cuomo bragged that Mr. Clinton's request for a big budget increase for HUD "shows that HUD is back in business, and has achieved a new level of public trust and confidence by proving it can create and run quality programs."

However, though Mr. Cuomo has scored some PR victories, HUD continues to be among the worst-run federal agencies. HUD Inspector General Susan Gaffney reported last December that Mr. Cuomo's constant reform initiatives have "had a crippling effect on many of HUD's ongoing operations."

In one misstep, HUD laid off employees who handled defaulted Federal Housing Administration homes and hired an incompetent contractor to do the same thing. As a result, the number of homes sitting vacant around the nation because of HUD rose sharply. As Miss Gaffney noted, "Vacant, boarded-up HUD-owned homes have a negative effect on neighborhoods, and the negative effect magnifies the longer the properties remain in HUD's inventory." Sen. Barbara Mikulski, Maryland Democrat, complained that HUD's negligence in moving foreclosed homes in Baltimore was contributing to "the destabilization of neighborhoods … another form of old-fashioned block-busting."

HUD's biggest fiasco in recent years may be the Community Builders program that Mr. Cuomo launched in 1998. Styled as an "urban peace corps," Mr. Cuomo claimed the Community Builders would allow HUD to apply the talent of the "brightest minds" to "the greatest needs in communities" and help "turn back decades of decline in urban America and bring a new prosperity to people and places in need." Community Builders are specially recruited and paid up to $100,000 a year.

From the beginning, the Community Builders have been first and foremost concerned about building HUD's image. In a June 16, 1999, speech to HUD employees, Mr. Cuomo made it clear one purpose of the Community Builders was to mobilize opposition against HUD's abolition; Mr. Cuomo was bitter that recipients of HUD benefits had not rallied to protect the agency.

In August 1999, Community Builders distributed a form letter to local community groups to spark opposition to a proposed Republican tax cut. As Newsday reported, "Local Community Builders were then expected to fill in blank spaces in the form letter, inserting the number of local jobs that would be lost and the number of housing units that would not be built in case of a tax cut… . For Manchester, N.H . that's in the big presidential primary state, by the way builders were instructed to inform local groups that $1.437 million would be lost because of the tax cuts, there would be 50 fewer local jobs, 158 fewer housing units and five fewer homeless or AIDS persons served."

In September 1999, the Community Builders were given orders to do maximum press outreach in a campaign to snare HUD a larger budget from Congress. Community Builders hustled to place op-eds in newspapers about the benefit of HUD's programs.

An IG report late last year revealed the program is little more than overpriced smoke-and-mirrors. Most of the Community Builders the IG interviewed said they spent their time mainly on "public relations activities." The IG concluded: "The one clear effect of the Community Builders is the dramatic increase in the number of people at HUD not part of a specific program, engaged in customer relations, and owing their jobs to the department's political management." Sen. Christopher Bond, Missouri Republican, derided the program as "Cuomo's personal army."

The IG found that the new whiz kids found novel ways to help HUD waste tax dollars: "As a result of the Community Builder interference, HUD spent more than $4.7 million in holding costs or lost sales proceeds. In one instance, HUD sold a property it had invested $17 million in to a nonprofit for $10."

Congress has yanked in the reins and prohibited HUD from extending the Community Builders program beyond the next two years. But there is nothing to stop Mr. Cuomo from launching other adventures in creative spending.

For instance, on March 15, Mr. Cuomo announced that HUD was "donating" (as if it was HUD's money in the first place) $200,000 to set up a task force on how to fight "hate" on the Internet. An alleged former Klansman had created a website that made threats against a Pennsylvania advocate. Mr. Cuomo proclaimed: "Housing discrimination is just as illegal in cyberspace as it is in our cities, our suburbs and our rural areas. The Internet is not sanctuary from the rule of law." It is presumedly only a question of time until, thanks to HUD, the Internet is as hate-free as public housing is crime-free.

Congress needs to firmly request that Mr. Cuomo waste fewer billions of dollars in the future. And the American people need to recognize that HUD has become the consummate Clintonite agency continually creating new programs to distract attention from all its previous failures. The only solution is to bring in the bulldozers.

James Bovard is the author of "Freedom in Chains" (St. Martin's, 1999). This piece is adapted from an article in the current American Spectator.

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