Bill de Blasio presided over millions of dollars in wasted taxpayer money when he oversaw the federal government’s public-housing programs in New York and New Jersey, records show.
He served as director of the New York-New Jersey region for the Department of Housing and Urban Development from 1997 to 1999. In that time, HUD’s inspector general reported that the region lost about $23 million to scams perpetrated by public-housing officials, mortgage companies and nonprofits that got grants from HUD.
Other accounts put the loss much higher. In a Dec. 14, 2000, article, The New York Times reported that several people defrauded HUD of $70 million in federally insured loans on more than 250 New York properties from 1998 to 1999.
Susan Gaffney, HUD’s inspector general, described extensive illegal activity by nonprofit groups at the time as “unique to New York.”
New York City — by far HUD’s largest grantee — received $1 billion annually from the agency during de Blasio’s tenure.
“It’s very frustrating and disappointing,” said Mark Calabria, who worked in HUD’s regulatory-affairs division from 2002 to 2003. “[De Blasio] had a responsibility to make sure that money wasn’t stolen or misused. He was supposed to be the first line of defense as far as protecting HUD money in the region.”
In one alleged scam, a Brooklyn realty company took money from “eight HUD-insured, low-income assisted housing developments for their own use and embezzled Section 8 housing assistance payments,” said a March 1998 inspector general’s report.
Losses from the “equity-skimming” scam totaled $10.8 million, it said.
A year later, another IG report found that 57 out of 84 units at a Staten Island apartment complex “failed to meet housing quality standards” and that bringing them up to snuff would cost $533,000.
One Section 8 landlord in Garden City, LI, Dennis Horak, extorted jacked-up rent payments from an 82-year-old widow totaling $3,400, the report said. The woman, who lived in the apartment for 17 years, was threatened with eviction if she didn’t pay up.
Those findings and others released between 1997 and 1999 only scratch the surface, Calabria said.
De Blasio campaign spokesman Eric Koch defended the mayoral candidate, saying he “defended taxpayers by working hard to aggressively root out waste and fraud while at HUD.”
Koch declined to specify how de Blasio did so.
De Blasio began his tenure at HUD in 1997, a year after running the Clinton-Gore presidential campaign in New York. He served under the future Gov. Cuomo, then HUD’s secretary under Clinton, for two years and left in November 1999 to run Hillary Rodham Clinton’s Senate campaign.
In his own run for mayor, de Blasio has cast himself as a savior of the poor in his “Tale of Two Cities” narrative. His Web site touts his experience with HUD and credits him with working “for affordable housing throughout his career.”
He’s also described himself as a “fiscal conservative.”
But records from his time at HUD tell a different story.
An IG report issued in 1996 — a year before de Blasio’s tenure began — recommended the Buffalo Municipal Housing Authority reduce its staff. But the authority, which receives millions of dollars from HUD annually, did not reduce staffing by as late as 1999 — two years after de Blasio took over as regional director.
In fact, staffing levels exceeded “HUD’s guidelines by 169 maintenance and administrative employees,” a 1999 report said.