President Bush's housing czar pressured the Philadelphia housing agency to transfer land worth $2 million to Kenny Gamble, the music producer turned developer, and retaliated when the agency would not knuckle under, a lawsuit says.
The Philadelphia Housing Authority (PHA) says the top federal housing official, Alphonso Jackson, improperly sought to steer the land to Gamble at a big discount.
In court filings, Carl Greene, PHA's executive director, says Jackson, secretary of the Department of Housing and Urban Development, called Mayor John Street twice to lobby on Gamble's behalf.
HUD confirmed yesterday that Jackson, a friend of Gamble's, had made the calls to Street. It denied it had in any way retaliated against the Philadelphia agency.
In the federal suit, filed in December, Greene contends that HUD is threatening to impose new controls on how Philadelphia spends millions in federal housing grants as payback for Greene's refusal to help Gamble.
Greene said the federal crackdown could force PHA to lay off hundreds of workers, raise rents, and halt millions of dollars in construction work on low-income housing.
HUD says it is moving against PHA only because the agency failed to make enough of its buildings handicapped-accessible, as required by federal law.
Greene said "the menacing letters, the abusive conduct" followed his refusal to release the land. He acknowledged he could not cite a document or a remark that explicitly tied Gamble's land deal to HUD's fiscal crackdown.
The tenure of Jackson at HUD has been marked by investigations and questions about whether he has allowed political considerations to interfere in the agency's business.
The FBI and the Justice Department, along with HUD's inspector general, reportedly are investigating allegations that he arranged lucrative HUD deals for his friends in New Orleans and the U.S. Virgin Islands.
In 2006, Jackson caused a stir when he told a Dallas audience he had once canceled a contract because the company's boss criticized Bush. He later apologized and said he made up the story.
Jackson has insisted that HUD contracts were never "awarded, rejected or rescinded" to reward Republicans.
In Philadelphia, the dispute between PHA and the federal agency is being waged over the South Philadelphia ground that once was dominated by the Martin Luther King housing project.
PHA razed the four King towers in 1999 and began spending $67 million to build 236 townhouses and apartments on the site near 13th and Fitzwater Streets.
Gamble grew up in South Philadelphia and became a dominant creative force in 1970s R&B, helping to create such hits as "If You Don't Know Me by Now" and "Back Stabbers."
Later, he became a player in city politics, giving at least a quarter of a million dollars in political contributions since 1988, and turned his attention to redeveloping his old neighborhood.
While most of his contributions went to Democrats, he also gave to some Republicans, including Sen. Arlen Specter, former Sen. Rick Santorum, and the National Republican Congressional Committee.
His nonprofit housing group, Universal Community Homes, was named by PHA to provide social-service help to the residents of the 236 new units.
In return, PHA agreed to give him pieces of the land at a steep discount, with permission to use it to build 19 "market-rate" houses.
With the projects gone, and the surrounding neighborhood undergoing a boom, the land has dramatically increased in value.
In 2006, Greene told Universal it would not be getting the land. Greene said yesterday that Universal failed to hold up its end of the deal and deliver the social services it promised, such as jobs and school counseling.
According to Greene, Gamble was confident that he would prevail. He said Gamble told him as they left a June 2006 meeting with Street in City Hall that he did not need to hire a lawyer to fight PHA.
"He said he didn't need any lawyers because he had friends - and Alphonso Jackson is his friend," Greene said.
Gamble did not return requests for comment. Senior executives at Universal Community Homes also did not return calls.
Greene said the HUD secretary called Street at least twice to lobby for Gamble.
According to Greene, Street did not push for him to help Gamble, but was worried about the clash with HUD.
"He was saying he didn't want any trouble out of these people," Greene recalled.
Though no longer mayor, Street remains chairman of PHA's board. No one answered Street's home telephone yesterday.
The news of the PHA civil suit against Jackson and HUD was reported by the Washington Post yesterday. The Post story quoted unnamed HUD officials as saying Jackson and Gamble often socialized together.
Steve O'Halloran, Jackson's press secretary, said Jackson was not available yesterday to talk to a reporter. "The secretary knows Kenny Gamble and has been to Philadelphia to view his redevelopment work," he said.
One such meeting took place in September 2006, according to Guy Ciarrocchi, HUD's former director for this region. Jackson visited Gamble at Universal's office on South 15th Street.
Ciarrocchi joined them later, and all three went to look at the land Gamble wanted. Gamble told Jackson that Universal would do good work in the neighborhood.
"I got the sense that Universal was pitching," said Ciarrocchi.
PHA officials were not involved in the meeting, and Greene said he only heard about it later.
"The secretary decided to come down and get personally involved in this dispute," Greene said. "He never talked to us. He just came down and took their side."
Immediately after the meeting, Ciarrocchi said, Jackson instructed him to get Greene's views on the dispute. Ciarrocchi said Greene told him Gamble was not willing to pay enough money for the site. He said that was the last he heard about the matter.
"It seemed reasonable to me," he said, referring to Jackson's request that he talk to Greene. "It seemed fair."
O'Halloran, the HUD spokesman, said Jackson called Street to complain about lagging plans to open a recreation center and park on the grounds of the former King project.
Asked whether Jackson also spoke with the mayor about Gamble's issues, he replied: "Not that I'm aware of."
In a separate interview, Orlando Cabrera, HUD's former assistant secretary for public housing, disclosed that he, too, had called Street.
Cabrera said he also was unhappy that Greene's agency had not followed through on the plans for the King site. Cabrera said he was particularly peeved that the agency had not yet installed a promised plaque to honor a spot where King had given a speech.
Cabrera, who stepped down from HUD last month, said he did bring up the parcel of land but was not necessarily trying to help Gamble. His goal, he said, was to make sure the land was used for some kind of housing.
"I don't know Kenny Gamble," Cabrera said. "I have never spoken with him or communicated with him in any way whatsoever. The only issue we ever had with Carl was this: Carl, go do what you said you would do."
Greene has a different view of HUD's actions: "It's what you get when you say no to power."
HUD provides PHA with more than $300 million yearly. In recent years, Washington has granted PHA an unusual amount of freedom in how it spends that money, and Greene has used much of it to leverage housing construction.
Now, HUD has threatened to strip away that autonomy and resume the tight controls over spending.
The agency says an audit shows PHA is not meeting a HUD requirement that at least 5 percent of apartments be handicapped-accessible.
Kim Kendrick, a top HUD official involved in the handicapped-access issue, said: "There's absolutely no connection. We don't know anything about the Kenny Gamble issue."
Greene said that the audit is mistaken and that the agency more than meets its requirement. If the changes take place, Greene said, he would be forced to make cutbacks in construction programs.
A PHA spokesman said the land Gamble wants was still vacant. The plan, he said, is still to build 19 houses.
Read the lawsuit (.pdf) at http://go.philly.com/
Read an affidavit (.pdf) by PHA Director Greene at http://go.philly.com/