County Auditors Merely Going Through The Motions

After a preliminary audit of the affordable housing program was issued in early 2006, a committee was evidently formed of personnel from the Auditor, County Executive, Housing and Community Development and County Counsel offices to review specific instances of suspected fraud and violations by owners of these “affordable” units. From what can be ascertained from the public record (which is very little), the committee meets in private and has issued no report of its findings or taken any action.

In June 2006, this committee, or someone in County government (it is unclear specifically who) made a request of the District Attorney’s office to conduct an “investigation regarding the affordable housing program.” The purported purpose of the investigation was to “take an overall look at alleged violators of the “AHP” (affordable housing program) and to determine if there were any potential violations of criminal law.”

Sounds good at first blush… like the County was finally getting serious about holding people who exploited the taxpayer-subsidized housing program for personal gain accountable. No such luck. What followed is a sad commentary on the lack of commitment or political will of our local government to hold either its own personnel or dishonest affordable housing owners accountable.

The District Attorney’s office, then led by longtime County District Attorney Thomas Sneddon, assigned a sole senior investigator to the project. There is no indication of whether this investigator had any background in consumer fraud investigations or legal credentials to assess criminal statutes relating to real estate and financial fraud.

The Michael Jackson prosecution commanded the attention of nearly the entire staff of the District Attorney’s office. One would think a scam involving millions of dollars of real estate, harming all the lawful citizens and taxpayers of the County would warrant a little more serious attention from the District Attorney.

While labeled an “investigation report,” the document produced is not a report of investigative findings at all. It is an “investigation” apparently driven by a predetermined conclusion, filled with unsupported assumptions, opinions, and legal conclusions, all from an investigator not qualified to render such opinions and conclusions.

Silencing The Opposition

The investigator states he/she does not believe there is sufficient evidence to support “even a probable cause allegation of any criminal conduct,” even though the report admits the affordable housing program was a complete mess with documents missing, no evidence to prove that lotteries to select applicants were ever held, and the existence of conflicts of interest by County personnel. Nevertheless, the investigator alleges that further investigation is a waste of time and money. This is a really surprising statement since later in the report there are at least two admissions from suspected violators that to this former prosecutor, provide an ample basis for charging criminal conduct.

The investigator purportedly interviewed unnamed members of the public who had complained about the program. Interestingly, the investigator did not contact or interview any of the most active public advocates on this issue, including this author, who possess substantial relevant information obtained in many hours of investigating wrongdoing in the affordable housing program.

It was only after four years of demanding that malfeasance in the affordable housing program be investigated that the Board of Supervisors finally ordered the County Auditor to conduct a full audit of the program. Up until then, every call for an investigation by the County of one of its pet “feel-good” projects, fell on deaf ears.

When approached with evidence of wrongdoing both by County personnel and affordable housing owners, Ed Moses, former Director of Housing and Development, refused to do anything to clean up the corrupt program. He instead attacked those who called for an investigation, at one point labeling them “Chicken Littles.” Mr. Moses went so far as to use the County’s Human Relations Commission and threats of filing spurious discrimination claims against complainants to try to silence them. The investigation report says nothing at all about this gross abuse of government power. The preliminary and final audits by the County Auditor’s office found violation rates as high as 25% of all owners of sale-restricted affordable housing units in the program, or almost 100 suspected violators.

Indicative of the lack of seriousness of the County D.A.’s investigation, the assigned investigator conducted only telephone interviews of just three suspected violators. The suspects’ statements for the most part went unchallenged and uncorroborated by documentary or other evidence.

This “investigation” of the County’s affordable housing program is an abysmal piece of investigative work. It is also a prime example of why the County should not be asked to investigate itself. The new District Attorney Christine Stanley should order it to be re-done properly by persons with expertise in the relevant areas of law.

The only conclusion one can draw from the D.A. “investigation,” preceded by County Counsel’s failure to advise to the Board of Supervisors of the slew of civil law remedies available to hold wrongdoers to account, is that there is no sincere interest on the part of the County to hold anyone responsible for past malfeasance in the affordable housing program. Sadly, it looks like our government officials are just going through the motions to silence public demands for accountability.