McGeehan: Latest fraud shows PHA not ready for local oversight

HARRISBURG — After the latest scandal involving the Philadelphia Housing Authority, State Rep. Michael P. McGeehan wants to slow down the return of local control over the agency until federal authorities have finished multiple investigations.

"We have no idea where these federal investigations are headed, how deep or broad they will run, or who or how many will be ensnared by their conclusion," McGeehan, (D., Phila.) said Tuesday at a news conference in the state Capitol.

On Friday, an insurance broker, Kobie T. West, pleaded guilty to defrauding the PHA of $2.3 million in a scheme involving a housing authority accomplice. The case, which started in 2006, is just one of several being handled by federal investigators.

The PHA has been under federal control since early 2011. The agency's new executive director, Michael P. Kelly, advised Mayor Nutter in March that the agency was not ready to return to local control. For Kelly, a key building block to reforming the PHA is changing and broadening the composition of the board of commissioners, which will require legislation.

On that front, McGeehan also advises a slower approach. A Senate bill would expand the PHA board from five to nine and place those appointees under the control of the mayor's office.

McGeehan said the bill, which passed the Senate and may be scheduled for a vote in the House this spring, was ill-timed and premature, implementing "radical changes" with the federal corruption probe still under way in the troubled agency.

"The bill ignores the glaring reforms that are needed," McGeehan said. "Until there is reform in the statute, the same old abuses and wink-wink side deals will continue."

Mark McDonald, Nutter's spokesman, said that if McGeehan thinks the recent West investigation is reason to go slow, "he's got it backward." McDonald said the crime occurred under the old governance structure at the PHA.

"Mike Kelly continues to transform that agency and they are awaiting this governance change, which will enable us to move forward," McDonald said.

He noted that McGeehan has met with Nutter both as part of groups and alone to discuss amendments to further toughen reforms.

McGeehan said he had 16 amendments to offer on the House floor that would institute checks and balances to ensure an end to conflicts of interest, retain a measure of state oversight such as mandatory audits, and also ensure the mayor does not have full appointment power for the board.

Rep. Michael H. O'Brien, who appeared with McGeehan along with fellow Philadelphia Democratic House members Angel Cruz and Rosita Youngblood, said that while the bill includes language that City Council would approve appointments, if it failed to act within 60 days, the appointments would be confirmed.

"This agency is infamous for corruption and excess," O'Brien said. "It's time to table the bill till the federal government has done its work."

Contact Jennifer Lin at 215-854-5659 or jlin@phillynews.com, or follow on Twitter @j_linq.