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Sep 2008
Troubled LA Housing Authority Cooked the Books Again

Hard as it may be to believe, it was just six months ago that Mayor Antonio Villaraigosa celebrated his managerial triumph by getting the long troubled L.A. Housing Authority (HACLA) back in the good graces of the federal government.

The mayor boasted that HACLA "has reached an important milestone in its efforts to reform ... and successfully met federally mandated reforms covering the City's Section 8 voucher program, putting the department back in good- standing and ending federal oversight of the program."

"For the first time in years, this agency is solvent, functional and in a strong position to deliver much-needed help to low-income families in LA."

Oops, maybe Antonio spoke a little too soon.

A new report from federal housing authorities -- that has gotten no visibility in the press -- says he spoke way too soon ... to the tune of a $27 million problem, nearly $28 million actually.

"The Authority's accounting records showed that it improperly advanced and expended more than $27 million in restricted funds to cover its operating losses for its other programs," reported Regional Inspector General Joan Hobbs in the Housing and Urban Development Report dated Aug. 21.

"The authority contended there was no misappropriation of funds, but rather the way the accounting system presented its financial transactions; however, we were unable to validate its contention."

The focus of the audit was to see if the city was still screwing recipients of Section 8 vouchers that let them live in decent units at a price they could afford but it expanded when suspicions arose that the highly-paid HACLA head Rudy Montiel (more than $300,000) was juggling the money without regard to federal rules or regulations.

No surprise there, the city of L.A. doesn't believe in obeying the law.

It's not entirely clear from the audit what exactly Montiel was hiding or why he was moving the money from account to account other than to conceal losses in specific areas, but HACLA's history suggests it has a lot to do with mismanagement of Section 8 housing vouchers.From what I can see I'm willing to bet Montiel -- who's gotten a lot of favorable media treatment -- was cooking the books to make it look like the Section 8 funding problem was fixed when he, like just about everybody else at City Hall, was doing the mayor's bidding.

And in the housing area that means carrying out the mayor's insane policy of densifying the city to "address the affordable housing crisis in Los Angeles" -- a crisis manufactured by the philosophical commitment to providing new housing to any poor person who wants to live here.

Well, at least some of the people who want to live here. Because the long-standing accusation is HACLA is that it's selective about who it helps and who it doesn't.

Even as HACLA was being brought under control by federal authorities for its abuses, a coalition of public interest law firms and civil rights groups last year filed a class-action lawsuit charging it broke the law when it effectively raised the rent for more than 20,000 poor residents.

So much for the myth Antonio and his pals really are helping the poor.

HACLA disputed the finding that it lacked "prudent oversight" of its federal funds, violated any rules or misappropriated any money. The agency blamed "accounting problems," but it's telling that after getting its protestations of innocence in the record, the agency obeyed HUD's directives and reimbursed the money -- $27,801,379 of it.

Now ask yourself, what would you do if you were one of those 15 City Council members, especially those who claim they care so deeply about the poor?

Wouldn't you be mad as hell? Wouldn't you be calling Montiel on the carpet and holding public hearings and making sure this was the last time HACLA cheated the poor?

Of course, you would. But you can't because the City Hall game is fixed and the public doesn't stand a chance.

It's not like the council has shown much interest in all the troubles HACLA has had over many years.

Have they looked into why the agency is spending $7 million a year or so on outside lawyers, something that has caused so much concern when it involves bumbling City Attorney Rocky Delgadillo?

Was anybody worried when Montiel last year fired his own whistleblowing chief investigator, Abel Ruiz, after he alleged that people inside the agency interfered with his efforts to get to the bottom of an $800,000 bid-rigging scheme.

The firing followed disclosure in the Times that a housing authority manager, Victor Taracena, had awarded construction and design contracts to family members and to three firms with ties to present and former City Council members in the 14th District, the seat now held by Jose Huizar.

You don't need to ask whatever came of all that -- I told you the game is fixed. (Ron Kaye is the former editor of the Daily News and the activist behind the Save LA Project.



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