- The Washington Times - Saturday, April 19, 2008

President Bush yesterday nominated Small Business Administration chief Steve Preston as secretary of Housing and Urban Development, replacing Alphonso Jackson who is under investigation for cronyism involving his friends in multimillion-dollar HUD projects.

“The department requires strong leadership at a time when our housing market is experiencing a period of challenge and uncertainty,” Mr. Bush said. “In seeking to fill this important Cabinet post, I looked for a leader with an impressive background in finance; someone who understands the important role the housing market plays in the broader economy.”

Nearly two years ago, Mr. Preston replaced SBA chief Hector Barreto, whose ouster came after criticism mounted over his slow handling and lack of preparedness to help small businesses in the Gulf Coast region secure loans and recover after Hurricane Katrina.

Mr. Preston, 47, left his job as chief financial officer of ServiceMaster Co. on April 25, 2006, to fill the SBA post. He has also served as senior vice president and treasurer of First Data Corp. and senior vice president of investment banking at Lehman Brothers.

Mr. Bush called his choice for new HUD secretary a “reformer” and “consensus builder” who had earned the respect of both Democrats and Republicans on Capitol Hill.

“I certainly hope to bring that spirit to the Department of Housing and Urban Development, to help restore stability and confidence in the housing market, and to promote sustainable job ownership, free from discrimination in our country,” Mr. Preston said.

Mr. Preston said he hoped to help people pursue the American Dream by ensuring that the market operates “fairly and effectively.”

Democrats immediately pounced on the announcement.

Sen. Christopher J. Dodd, Connecticut Democrat and chairman of the Senate Committee on Banking, Housing and Urban Affairs, expressed concern that in a time of record foreclosures and a crisis in the mortgage industry, Mr. Preston has limited experience in the field.

“These priorities call for a leader with expertise in housing issues, yet the president’s choice has no apparent housing background, which raises questions,” Mr. Dodd said. “Nevertheless, I look forward to learning more about Mr. Preston and his qualifications for this important job at this trying time in our nation’s economy.”

Mr. Preston will sit before Mr. Dodd’s committee and will undoubtedly face some tough questions from Democrats during his confirmation hearing.

Rep. Nydia Velazquez, New York Democrat and chairman of the House Small Business Committee, was critical of Mr. Preston’s handling of SBA for the past two years.

“Trading one troubled agency for another is short-sighted, and it could not come at a worse time for the American people,” said Mrs. Velazquez, who is also a member of the housing and community opportunity subcommittee of the Financial Services Committee.

“HUD’s crisis must be resolved without delay, but the fact remains the agency Mr. Preston has been responsible for leading is still plagued by serious problems of its own,” Mrs. Velazquez said.

Federal investigators have been examining the ties between Mr. Jackson and a friend who was paid $392,000 by HUD as a construction manager in New Orleans. He reportedly got the job after Mr. Jackson told a staff member to pass his name on to the Housing Authority of New Orleans.

Officials in Philadelphia’s housing authority said Mr. Jackson retaliated against the agency after it refused to award a property worth $2 million to community developer Kenny Gamble for redevelopment of a public housing complex.

Jerry Seper contributed to this article.

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