By Edward T. Pound, National Journal
© National Journal Group Inc.
Thursday, March 13, 2008

Housing Secretary Alphonso Jackson, under fire for reportedly arranging contracts for close friends, repeatedly refused to answer questions about his actions during a hearing Thursday before a Senate Appropriations panel.

	Until this week, Congress has shown little interest in the investigation of Jackson. Now the honeymoon appears to be over.

Jackson, who has served as secretary of the Department of Housing and Urban Development since 2004, complained, when questioned, about "misinformation" in the press and said that he would not answer questions until a criminal investigation of the allegations is completed.

During a hearing of the Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, chairman Patty Murray, D-Wash., pressed Jackson to explain whether he had improperly steered contracts to friends.

Jackson declined, but said that when the inquiry is finished, "the allegations will be put to rest."

Murray was not satisfied. "You are operating under a cloud right now," she told Jackson. She pointed out that Jackson had testified before her panel in May 2007 that he never "touched" a contract.

Yet she said a man named William Hairston, a contractor, has been quoted in the press as saying that Jackson recommended him for work at the Housing Authority of New Orleans, or HANO, which HUD controls.

Again, Jackson declined to comment.

Jackson's tough day before the appropriations panel, which provides funds for HUD programs, came amid a growing investigation into his conduct. The investigation is being run by William Welch, the chief of the Justice Department's Public Integrity Section. Agents from the FBI and the HUD Inspector General's Office, along with a federal grand jury in Washington, also are involved in the investigation.

The inquiry is focused on whether Jackson helped friends win no-bid contract work at HANO and at a second public housing authority in the Virgin Islands. Additionally, one company, Columbia Residential, has financial ties to Jackson and is involved in a lucrative project in New Orleans.

Before joining HUD as deputy secretary in 2001, Jackson formerly worked as a "partner/consultant" for Atlanta-based Columbia Residential, according to his press office. Columbia Residential owes Jackson at least $250,000 under a separation agreement, his financial disclosure reports show.

Last year, HANO awarded a contracting team, which included Columbia Residential, a $127 million project to redevelop the St. Bernard public housing project in New Orleans. St. Bernard was closed after Hurricane Katrina struck the Gulf Coast in August 2005.

Jackson has recused himself from participating in matters relating to Columbia Residential.

However, Scott Keller, Jackson's deputy chief of staff until last August, played a central role in the selection of the Columbia Residential team for the St. Bernard project. Until this week, Congress has shown little interest in the investigation of the housing secretary. Now the honeymoon appears to be over.

On Wednesday, Sen. Christopher Dodd, D-Conn., chairman of the Senate Committee on Banking, Housing, and Urban Affairs, told Jackson at a hearing that he was "deeply troubled" by the allegations.

Dodd then fired off a two-page letter demanding answers.

Dodd asked what role, if any, Jackson played in awarding the $127 million redevelopment project in New Orleans to the Columbia Residential team. He also asked whether Jackson was involved "in any way" in securing work for his friend Hairston in New Orleans, and for a second friend, Atlanta attorney Michael Hollis, at the Virgin Islands Housing Authority.

Hairston was paid more than $485,000 for working at HANO during an 18-month period ending in June 2007.

All told, Hollis appears to have been paid about $1 million before he was replaced as executive administrator at the island authority last year. Hollis had no prior experience in running a public housing agency.

At the hearings this week, senators also sought without success to find out whether HUD officials, in a separate matter, had retaliated against the Philadelphia Housing Authority. The housing authority is suing HUD in Philadelphia federal court, charging that HUD is planning to withhold federal funds because the authority refused to turn over a vacant city lot worth $2 million to Kenneth Gamble, a friend of Jackson's.

HUD officials have denied the allegations and have said that they are considering imposing restrictions because the authority had failed to make enough of its buildings accessible to the handicapped, as required by federal regulations. The lawsuit was revealed in February by the Washington Post.