By David Hammer and Gordon Russell
U.S. Housing and Urban Development Secretary Alphonso Jackson said Thursday he will cooperate with investigators after questions arose about how one of his friends got nearly half a million dollars for work at the Housing Authority of New Orleans, which currently is under the oversight of the federal government.
Jackson, who testified before Congress this year that he doesn't intervene in awarding contracts, acknowledged he may be under investigation in a case that involves just that.
Others connected to the case say HUD's inspector general and the FBI have seized HANO equipment and have asked questions about Jackson's possible role in HANO's hiring of Jackson's friend, South Carolina construction contractor William Hairston. Hairston's construction company was hired by HANO in January 2006 and subsequently won a no-bid "emergency" contract awarded to Hairston's construction company in July 2006.
"My commitment to helping the American people find decent, safe and affordable housing is unwavering, and I intend to fully cooperate with any possible investigation and to clear my name," Jackson said in a statement e-mailed by a spokeswoman. The office of HUD's inspector general did not respond to requests for comment Thursday.
A Jackson spokesman acknowledged that Hairston is the secretary's friend, but said Hairston was only one of three potential construction managers Jackson passed along for consideration by HANO.
Nadine Jarmon, whose company contracted with HUD to oversee HANO when Hairston became the agency's construction manager, said she never saw three names. She said she assumed Hairston had connections in Washington because it was HUD headquarters that had referred him to her deputy, Lori Moon. Moon worked under Jackson when he led the housing authorities in Dallas, St. Louis and Washington.
HUD assumed oversight of HANO in 2002 because of rampant mismanagement.
It's not the first time Jackson, a Texas friend of President Bush's, has been questioned about his influence in HUD contracts. Last year, he said at a speech in Dallas that he stepped in to keep a HUD contract from going to someone who had spoken against Bush, then apologized when Congress called for an investigation.
In December, the inspector general concluded that Jackson had called for aides to consider the politics of contract bidders, but couldn't prove the secretary showed political favoritism.
This spring, Jackson testified before a Senate committee that he doesn't "interfere with any contract that is given in HUD, period," and dared one Democratic senator to prove he ever "touched one contract."
The question in this case may hinge on whether Jackson directed Moon, a hired agent of HUD in New Orleans, to hire Hairston.
Hairston told The Times-Picayune in a telephone interview from his home in Hilton Head Island, S.C., that he is friends with Jackson and wanted to help Jackson rebuild public housing in New Orleans after Hurricane Katrina. But he said Jackson didn't get him the job.
"I came to New Orleans at the request of Doctor Moon, not Alphonso Jackson. Doctor Moon called me. The secretary did not guarantee me the job. I went to work for Doctor Moon," Hairston said.
Contractor denies report
On Thursday, the National Journal reported that Hairston said Jackson helped him get the HANO job. On Thursday, Hairston called the claims "lies."
Hairston said he heard that Jackson was under investigation in the matter and former colleagues at HANO told him that the FBI and other federal investigators had seized his computer at the local agency's offices after he left. He said he has not been contacted by investigators.
"I don't know why they're messing with the secretary because he's doing his best to do what's best for New Orleans," Hairston said. "And I'm getting persecuted because I was trying to make his wishes come true. The biggest friend New Orleans has is Alphonso Jackson."
In a telephone interview with The Times-Picayune, Moon declined to comment on how Hairston was hired. She said she is scheduled to be interviewed by investigators from the HUD inspector general's office and the FBI and wouldn't comment until then.
Jarmon said she was questioned about Hairston by an inspector general investigator and an FBI agent in August. She presented invoices showing that she paid Hairston $93,777 as a subcontractor for her own company from January through April, when she was released from her HUD contract.
Jarmon said she didn't know anything about Hairston before he arrived, but didn't find anything odd about taking him on as construction manager at $175 an hour. She said that was slightly less than she and Moon were paid, and Jarmon said Hairston had good command of the construction industry.
But then Jarmon and Hairston started butting heads. Before he had been in New Orleans a month, Hairston started going to HUD headquarters behind her and Moon's backs touting how much money he was saving HANO by cleaning up overpriced contracts, Jarmon said.
Conflict and departure
Three months after Hairston arrived, Jarmon, who rode out Katrina on the roof of HANO offices and was beloved by public housing residents, was pushed out. Her conflict with Hairston seemed to precipitate her exit.
Hairston "wasn't a bad guy; he did know construction," Jarmon said. "He made really good recommendations on Iberville (public housing development), but it wasn't something that saved the agency millions of dollars. No way."
She said what made her really wonder about Hairston's connections was that after she and Moon left, Hairston continued to work and be paid without a contract. Jarmon said she had expressly warned Washington that if they wanted to keep Hairston, they would have to make it official.
In July 2006, C. Donald Babers, a HUD official who single-handedly acts as HANO's board, approved an emergency, no-bid contract for Hairston Construction Services. According to HUD, the emergency contract paid Hairston $392,000 over a year and a half.
Donald Vallee, the head of a local landlords association who attends all of the HANO meetings, challenged the contract when it was first approved.
"I said, 'Who's this on this no-bid contract?'¤" Vallee said. "I saw that the minutes from the previous meeting reflected this fellow as an employee. I said why are you giving a no-bid contract to an employee? I don't think that's kosher, so I confronted Babers. He blew me off, but I don't take that kind of answer."
On the record, Babers said HANO couldn't be "second-guessed" in such an urgent situation. But Vallee went to HUD headquarters to complain about the contract. A few weeks ago, federal investigators questioned Vallee, wanting to know about Hairston, other contracts Vallee had questioned and if he knew about any ties to Secretary Jackson. Vallee told them he wasn't aware of any connections. "I said there's nothing more to it than I ran into it accidentally," Vallee said.
Hairston said there was nothing untoward about the emergency contract he worked under -- it was a common thing at HANO in the wake of Katrina.
"I never used (Jackson's) influence. I never called him when I had a problem," Hairston said. "Doctor Jarmon drilled me every day. She'd say, 'Who do you know?' I never told her I knew the secretary. It didn't matter who I played golf with and who I was friends with. The housing authority is still going through a lot of hell. And since I left, nobody is looking at it. That's what I was doing; keeping it moving."
Hairston isn't the only contractor with ties to Jackson who has gotten HUD work in New Orleans.
Jackson's financial-disclosure forms indicate that he is owed between $250,000 and $500,000 by Columbia Residential LLC, an Atlanta firm that employed him before he joined HUD in 2001, according to the National Journal. He was a "partner/consultant" to the firm, the agency confirmed Thursday.
Columbia Residential was part of a group that recently won a $111 million contract from HANO to redevelop the St. Bernard complex, but HUD officials said Jackson played no role in that award. Upon taking the housing post, Jackson "recused himself from participating personally and substantially in any particular matter" that could have had any effect on Columbia Residential's ability to pay his debt, housing officials said.
Shortly after Jackson joined the federal government, another company affiliated with Columbia Residential became one of HANO's go-to firms. Documents show the second company, Columbia Highlands LLC, also based in Atlanta, had principals in common with Columbia Residential, among them Noel Khalil, Columbia Residential's president. Khalil did not return a phone message Thursday.
Last December, a Columbia Highlands employee pleaded guilty to accepting bribes from a HANO contractor he was supposed to be overseeing. According to a summary of the case filed by the government, James Lozano of Atlanta admitted accepting $45,000 from the owner of a construction company helping to build the Fischer Senior Housing Village in Algiers. The money was paid in increments starting in 2002, the records say.
Columbia Highlands initially received a small project management contract from HANO, Moon said. In late 2002, the firm got a much larger contract, essentially putting it in charge of overseeing the redevelopment of all of the complexes undergoing renovation at the time: Desire, Florida, Fischer and Guste. The value of that contract could not be determined Thursday.
Moon said the larger contract was awarded after a competitive-selection process, under which HANO would not have been bound to choose the lowest-priced vendor. She declined to continue the interview after being asked how Columbia Highlands first came to work for the agency.
David Hammer can be reached at
or (504) 826-3322. Gordon Russell can be reached at
or (504) 826-3347.