- The Washington Times - Monday, March 31, 2008

Housing and Urban Development Secretary Alphonso Jackson, the subject of a federal grand jury investigation into suspected cronyism involving a multimillion dollar redevelopment project in New Orleans, announced his resignation today, effective April 18.

Mr. Jackson, named to the post in January 2004, made no mention of the grand jury probe in his resignation announcement, saying only, “There comes a time when one must attend more diligently to personal and family matters. Now is such a time for me.”

The resignation also comes at a time that the housing industry’s crisis has imperiled the nation’s credit markets and led to a major economic slowdown, with home prices dropping at an unprecedented 23 percent rate over the last three months.

The record price declines are a root cause of the mortgage and housing crisis, leading to escalating foreclosures, burgeoning bank losses and a slide in consumer confidence and spending that imperils the economy.

The Jackson investigation, being conducted by the FBI, HUD Inspector General Kenneth Donohue and prosecutors from the Justice Department’s Public Integrity Section, has focused on conflict of interest allegations involving a $127 million HUD redevelopment project in New Orleans by Columbia Residential, an Atlanta-based company.

According to Mr. Jackson’s public financial disclosure reports, the company has significant financial ties to Mr. Jackson and reportedly owes the secretary between $250,000 and $500,000 “for past services.”

Federal investigators also are trying to determine if Mr. Jackson arranged lucrative housing contracts for two of his close friends, one of whom worked at the Housing Authority of New Orleans and another who received a contract to manage the Virgin Islands Housing Authority.

A key figure in the investigation has been Scott Keller, a former top HUD officials and key aide to Mr. Jackson.

Several members of Congress have accused Mr. Jackson of refusing to respond adequately to the pending accusations of impropriety.

Last month, Democratic Sens. Chris Dodd of Connecticut and Patty Murray of Washington demanded Mr. Jackson’s resignation, saying the ongoing investigation had distracted from the secretary’s ability to handle the nation’s housing crisis.

“Secretary Jackson has repeatedly demonstrated that he is not in the position to provide the type of leadership that is necessary during these trying and difficult times,” said Mr. Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs.

But President Bush said, “I have known Alphonso Jackson for many years, and I have known him to be a strong leader and a good man. I have accepted his resignation with regret.” He described Mr. Jackson as a “great American success story,” saying he “always understood the value of hard work and equal opportunity for all Americans.

“For more than three decades, he has worked to help more Americans become homeowners and strengthen communities throughout our nation,” he said. “While leading the Department of Housing and Urban Development, Alphonso made significant progress in transforming public housing, revitalizing and modernizing the Federal Housing Administration, increasing affordable housing, rebuilding the Gulf Coast, decreasing homelessness and increasing minority homeownership.”

Speaking to reporters at HUD headquarters in Washington, Mr. Jackson said that “as the son of a lead smelter and nurse midwife, and the last of 12 children,” he had devoted his career to improving housing opportunities.

“Never did I imagine I would serve America in such a way,” he said. “I am truly grateful for the opportunity. We have helped families keep their homes, we have transformed public housing, we have reduced chronic homelessness, and we have preserved affordable housing and increased minority homeownership.”

He did not take questions, leaving the podium after concluding his remarks.

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