Cuomo’s Forgotten Racketeering at HUD (2000)

Twenty-one years ago, I scoffed that Andrew Cuomo was “the Clinton administration’s most megalomaniacal cabinet secretary.”  Cuomo said in 1998, “Ultimately, the vindication of progressive politics will come only when people believe the government is competent.”

Cuomo is now the embattled governor of New York. His state’s lucky residents haven’t quite had their faith in government competence restored.

The American Spectator, April, 2000

HEADLINE: Andy At It Again
How to keep reinventing HUD to advance yourself.

BYLINE: by James Bovard; James Bovard is the author of Freedom in Chains (St.
Martin’s Press).

BODY:

Housing and Urban Development Secretary Andrew Cuomo may be the Clinton
administration’s most megalomaniacal cabinet secretary. So fixated is he on
generating favorable publicity for himself and his agency he makes other Clinton
appointees almost seem honest. Cuomo declared in 1999: “The PR is the most
important thing I do. I’m trying to get out a message that people need to
hear, and I’m fighting 30 years of negative stereotypes about this agency….
Eighty percent of this battle is communications.”

By his accounts, the HUD public relations campaign appears to have worked. On
February 7, Cuomo huffed: “Just a few years ago, our critics were calling for
the elimination of HUD. Today, HUD is held up as a model of successful
government reinvention.” Cuomo bragged that President Clinton’s recent request
for a big budget hike for HUD “shows that HUD is back in business, and has
achieved a new level of public trust and confidence by proving it can create and
run quality programs.”

Cuomo’s devotion to PR is evident in his championing of the Community
Builders program–a new cadre of 800 HUD employees specially recruited and paid
up to $100,000 a year to spread the word about HUD’s achievements. A 1998
National Journal profile of the program noted that Community Builders were to be
“handed…state-of-the-art laptops, which HUD officials believe will move the
agency ‘light-years ahead’ in its ability to respond to communities
effectively.” New laptops for a few hundred favored employees were supposed to
counterweigh the thousands of collapsing public housing apartment buildings HUD
was bankrolling around the nation. National Journal also noted that HUD
“unveiled the prototype for its new local field offices where Community Builders
will set up shop. These offices, equipped with stylish furniture and
The American Spectator, April, 2000 April, 2000

workstations, will feature touch-screen electronic kiosks for information on
home improvement loans and how to file housing complaint forms.” If only a few
more people would accept subsidized loans and make accusations against
landlords, all of HUD’s problems would be solved. Cuomo created this “urban
Peace Corps” with no authorization or appropriation from Congress; instead, he
merely shuffled HUD’s books and used money “saved” from laying off other HUD
employees. HUD violated federal regulations in its hiring processes–but that
never stopped Cuomo in the past.

What have the costly employees of Cuomo’s pet program been up to? Spreading
the word about how Republicans want to destroy urban America. In August 1999,
Community Builders distributed a form letter to local community groups to spark
opposition to a proposed Republican tax cut. As Newsday reported, ” Local
Community Builders were then expected to fill in blank spaces in the form
letter, inserting the number of local jobs that would be lost and the number of
housing units that would not be built in case of a tax cut…. For Manchester,
N.H.–that’s in the big presidential primary state, by the way– builders were
instructed to inform local groups that $1.437 million would be lost because of
the tax cuts, there would be 50 fewer local jobs, 158 fewer housing units and
five fewer homeless or AIDS persons served.”
The American Spectator, April, 2000 April, 2000

Congress has questioned the value of the Community Builders program, and
HUD’s inspector general launched an audit which HUD sought to derail. A 1999 IG
report concluded that “most of the Community Builders’ goals are activities
rather than actual accomplishments. HUD classifies 15 of the Community Builders’
19 goals as activities performed, rather than outcomes measured.” Most of the
Community Builders the IG interviewed said they spent their time mainly on
“public relations activities.” Some of the new cadre’s activities make HUD
appear as wasteful as ever: “As a result of the Community Builder interference,
HUD spent more than $4.7 million in holding costs or lost sales proceeds. In one
instance, HUD sold a property that it had invested $17 million in to a nonprofit
for $10.”

The IG received many complaints about ethical misconduct by Community
Builders. Community Builders repeatedly violate a federal law prohibiting ”
publicity or propaganda designed to support or defeat legislation pending before
Congress.” The IG concluded: “The one clear effect of the Community Builders is
the dramatic increase in the number of people at HUD not part of a specific
program, engaged in customer relations, and owing their jobs to the Department’s
political management.” Sen. Kit Bond derided the program as ” Cuomo’s personal
army.” One HUD official declared that the Community Builders were seen as
“Democratic ward-heelers who act as a pipeline between Democratic city
officials, party leaders, and the administration and the Democratic National

Last October Congress barred HUD from spending any additional funds on
Community Builders, though it did allow current “Builders” to serve out their
two-year terms.

Cuomo has numerous other weapons in his public relations arsenal. Following the
lead of Henry Cisneros, his predecessor at HUD, Cuomo became a prodigious
creator of new programs. The number of HUD programs increased from 240 in 1994
to 328 in 1997–and is much higher today, resulting in lavish press coverage for
many of the new program launches. As a master of ” Reinventing Government”
scams, he knows that it’s far easier to start two new programs than to fix an
existing one. Since most journalists don’t keep track of anything more complex
than their own lunch appointments, he has largely gotten away with the scam.

Meanwhile, all this program reshuffling has left HUD management a shambles.
In February 1999, HUD Inspector General Susan Gaffney testified before Congress
that “there is evidence that the (HUD) downsizing that started in 1995 has
increased costs as well as program abuse.” In a December report she concluded
that Cuomo’s constant reform initiatives have “had a crippling effect on many of
HUD’s ongoing operations.” In one misstep, HUD laid off employees who handled
defaulted FHA homes and hired an incompetent contractor to do the same thing.

As a result, the number of homes sitting vacant around the nation because of HUD
rose sharply. As Gaffney noted, “Vacant, boarded up HUD-owned homes have a
negative effect on neighborhoods, and the negative effect magnifies the longer
the properties remain in HUD’s inventory.”

Fiascoes abound. As part of his “shared visions” plan, Cuomo announced during
a visit to South Dakota’s Pine Ridge Indian Reservation last July that HUD would
provide 300 new homes for impoverished Native Americans. Cuomo specifically
promised that 50 new homes would be built by early this year. As of last count,
there were only six new homes, plus 14 trailer homes that had been put on
concrete blocks. Cuomo was warned ahead of time by HUD officials that there was
little or no chance that the agency could fulfill such a promise, but was not
deterred. One HUD official told the Washington Times: ” It became apparent that
Cuomo’s main objective was not housing, but to make a grand gesture that would
provide a photo opportunity showing him ‘pounding nails’ on an Indian
reservation.”

Last December 21, Cuomo made headlines by announcing that HUD was seizing
control of a program awarding grants to homeless advocacy organizations in New
York City. Supposedly Cuomo was outraged that Mayor Rudy Giuliani refused to
deliver HUD money to the program. An audit had found that the group was unable
to account for $500,000 in government grants it received in 1997. Despite the
possibility that the group was guilty of massive fraud, Cuomo exploited the
situation to try to make Giuliani look heartless. On the same day Cuomo made the
decision, his wife, Kerry Kennedy Cuomo, announced at a Manhattan fund-raising
event for Senate candidate Hillary Clinton: “Just a few hours ago, my husband
pulled up the gauntlet. Next time, Rudy, pick on someone your own size!” The
Wall Street Journal noted, “Mr. Cuomo is an informal adviser to Mrs. Clinton’s
Senate campaign. His former HUD regional director for New York, Bill de Blasio,
is Mrs. Clinton’s campaign chief.”

Cuomo also has a starring role in the Clinton administration’s latest
campaign against the Second Amendment. Clinton announced last September that HUD
would be allocating $15 million for a fund to buy up private guns. Cuomo
promised that the program would start in more than 30 cities and would quickly
buy up 300,000 guns.

In one of the first cities in which the buyback program took place,
Washington, D.C., it turned out that most of the gun sellers were senior
citizens, not criminals. Florida State University Professor Gary Kleck observed,
“Support for turn-in programs among government officials yields real political
benefits, in the form of favorable press coverage and positive feedback from gun
control supporters…. These programs have no demonstrable impact on crime.”

Last December, the White House announced that HUD would bankroll lawsuits by
local public housing authorities against gun manufacturers. The Justice
Department reportedly advised HUD that there was no legal basis for HUD’s
involvement in the lawsuits–but to no avail. HUD released a study in February
which announced: “Fear of gun violence and other crime can lead to neighborhood
decline.” This is not news for the millions of low-income and working-class
Americans unfortunate enough to live near public housing projects.

The HUD anti-gun lawsuit is raising groans from public housing authorities
around the country. One public housing official complained to Housing Affairs
Newsletter: “This whole thing is absurd. The housing authorities hardly have
enough for operating expenses. It’s preposterous to ask them to file a suit and
fund the expenses with their revenue.” HUD is trying to rev up the anti- gun
bandwagon just at a time when judges are throwing out local governments’
lawsuits against gun makers.

Cuomo acts as if the more money HUD spends on political fixes, the more
indisputable it becomes that the agency and its boss love the poor–as if
maximizing the number of slush funds was the secret of salvation for urban
America. Cuomo declared in 1998: “Ultimately, the vindication of progressive
politics will come only when people believe the government is competent.” With
people like Cuomo in charge, we’re in for a long wait.
The American Spectator, April, 2000 April, 2000

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