By Carol D. Leonnig

The Washington Post

Wednesday 12 March 2008

High-level officials wrote of punishing Philadelphia housing director.

After Philadelphia's housing director refused a demand by President Bush's housing secretary to transfer a piece of city property to a business friend, two top political appointees at the department exchanged e-mails discussing the pain they could cause the Philadelphia director.

"Would you like me to make his life less happy? If so, how?" Orlando J. Cabrera, then-assistant secretary at the U.S. Department of Housing and Urban Development, wrote about Philadelphia housing director Carl R. Greene.

"Take away all of his Federal dollars?" responded Kim Kendrick, an assistant secretary who oversaw accessible housing. She typed symbols for a smiley-face, ":-D," at the end of her January 2007 note.

Cabrera wrote back a few minutes later: "Let me look into that possibility."

The e-mails, obtained by The Washington Post, came to light as a result of a lawsuit provoked by HUD's decision last September to strip the Philadelphia Housing Authority of as much as $50 million in federal funds. In December, it declared the agency in violation of rules that underpin its ability to decide precisely how it will spend federal housing funds. Kendrick was the official who formally notified the authority that she had found it in violation.

HUD has argued publicly that this decision was not related to the demands by HUD Secretary Alphonso Jackson that Greene turn over a $2 million vacant city lot to Kenny Gamble, a friend of Jackson's. HUD officials have said that Greene was not punished for his defiance.

But Greene and the Philadelphia authority have accused HUD and Jackson in a lawsuit of fabricating problems in the authority's performance as a way to retaliate against Greene.

The e-mails suggest that HUD leadership sought to punish Greene by threatening the authority's funding. What is not explicitly said in the e-mails is why.

On the date these e-mails were sent, HUD notified the housing authority that it had been found in violation of rules requiring that 5 percent of housing be accessible to disabled residents. The department later argued that because the authority refused to acknowledge it was in violation and to agree to a specific remedy, it was in violation of a broader agreement that put $50 million in federal funding in jeopardy.

This week, Greene sent copies of the e-mails to Sens. Arlen Specter (R) and Robert P. Casey Jr. (D) of Pennsylvania. Greene called the e-mails evidence of HUD's retribution for his refusal to give public property to Gamble. He urged the senators to demand that Jackson and his deputies explain their motives. Jackson is set to testify about HUD matters today before the Senate Banking Committee.

Casey said that he has "serious questions" about the e-mails and that "80,00 low-income Philadelphians deserve answers."

"This is the kind of stuff you read about in novels, not what you expect from government officials," Greene said in an interview. "It would appear they would carry out a vendetta against me even if it means damage to an entire city."

HUD spokesman Jereon Brown declined to comment on the e-mails. "The judge presiding in the lawsuit has asked the parties not to speak to the news media," Brown said.

The dispute between Jackson and the Philadelphia Housing Authority revolves around a city-led revitalization of the once-blighted Martin Luther King Jr. housing project in South Philadelphia.

In 1999, Universal Community Homes, a nonprofit urban-development company founded by Gamble, and a for-profit developer won the first of a series of contracts from the city to develop 236 affordable, below-market units and provide marketing and counseling services to incoming residents. If they met the contract terms, they were to receive a nearby vacant property.

Gamble complained to Jackson in 2006 that Greene would not give him the property, according to participants in a meeting. Jackson asked then-Philadelphia Mayor John F. Street to get Greene to turn over the land, but Greene said Universal failed to deliver on many of its promises, and he refused to hand over the land.

In the following months, Jackson's deputies, including Kendrick, assistant secretary for fair housing, repeatedly threatened in calls and in writing to find the authority in violation of both federal accessibility law and HUD's redevelopment grant, according to the lawsuit. They said the authority would be in default on the King project unless it transferred the vacant land to Gamble.

HUD agreed last fall to let the authority keep the property but found the agency in violation of the accessibility law and the larger funding contract.

The authority recently told a federal judge in Philadelphia that HUD's "capricious" decision would cost the authority $50 million, raise rents for most of its 84,000 low-income tenants and force the layoffs of 250 people. The judge agreed to temporarily stay HUD's finding of a violation. The judge has said the authority can question some key HUD leaders under oath but not Jackson.

Jackson's office last week said in a written statement that he could not comment on Greene's allegations because they are a subject of litigation. Jackson, who ran the District's housing authority in the 1980s, joined HUD as a deputy secretary in 2001 and was named secretary of the agency in 2004.

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