HUD Secretary quits amid housing crisis
WASHINGTON (AP) - March 31, 2008 He leaves behind a trail of unanswered questions about whether
he tilted the Department of Housing and Urban Development toward
Republican contractors and cronies.
The move comes at a shaky time for the economy, with soaring
mortgage foreclosures imperiling the nation's credit markets.
In announcing that his last day at HUD will be April 18, Jackson
said only, "There comes a time when one must attend more
diligently to personal and family matters."
Some Congressional Democrats had pushed for him to leave.
Democratic presidential candidate Hillary Rodham Clinton said
that while Jackson's resignation is "appropriate, it does nothing
to address the Bush administration's wait-and-don't-see posture to
our nation's housing crisis."
House Speaker Nancy Pelosi, D-Calif., said HUD will be called on
to work with Congress on assisting refinancing for borrowers faced
with imminent foreclosure.
The ethical allegations against Jackson "meant that the Bush
administration's ineffective housing policies were being burdened
by an even more ineffective HUD Secretary," Sen. Patty Murray,
D-Wash., said after Jackson's announcement.
President Bush called Jackson "a strong leader and a good
man." Ties between the two men go back to the 1980s when they
lived in the same Dallas neighborhood. It was Jackson's personal
ties to Bush that brought him to Washington, where he displayed a
forceful personal style at HUD for seven years, first as the
agency's No. 2 official and since 2004 in the top slot.
Despite a strong commitment to housing for those in need,
Jackson was capable of ill-advised public comments.
Last year, after the subprime mortgage crisis erupted, many
policymakers underlined the disproportionate impact of the
high-risk, high-cost mortgages on minorities and the elderly, who
often are targets of predatory lending practices that lure people
into loans they are incapable of repaying.
Asked about the problems with subprime mortgages last June,
Jackson insisted that many such borrowers were not unsophisticated,
low-income people but what he called "Yuppies, Buppies and
Guppies" - well-educated, young, black and gay upwardly mobile
achievers - with expensive cars who bought $400,000 homes with
little or no money down.
In announcing his departure, Jackson said that in his time at
HUD, "We have helped families keep their homes. We have
transformed public housing. We have reduced chronic homelessness.
And we have preserved affordable housing and increased minority
homeownership."
Bush has been cool to the idea of a big federal housing rescue.
"The temptation of Washington is to say that anything short of a
massive government intervention in the housing market amounts to
inaction," the president said recently. "I strongly disagree with
that sentiment."
On Monday on his way out of the country for a trip built around
a NATO summit, Bush said he wants Congress to modernize HUD's
Federal Housing Administration, allowing more struggling homeowners
to refinance their mortgages.
In October, the National Journal first reported on the criminal
investigation of Jackson. The FBI has been examining the ties
between Jackson and a friend who was paid $392,000 by Jackson's
department as a construction manager in New Orleans. Jackson's
friend got the job after Jackson asked a staff member to pass along
his name to the Housing Authority of New Orleans.
In another instance of alleged favoritism that came to light in
February, the Philadelphia housing authority alleges that Jackson
retaliated against the agency because it refused to award a vacant
lot worth $2 million to soul-music producer-turned-community
developer Kenny Gamble for redevelopment of a public housing
complex.
U.S. District Judge Paul S. Diamond ruled Monday in Philadelpia
that HUD acted legally and did not retaliate against the housing
authority.
Jackson's problems began in 2006, when he told a group of
commercial real estate executives that he had revoked a contract
because the applicant who thanked him said he did not like
President Bush. Jackson later told investigators "I lied" when he
made the remark about taking back the contract.
The probe of Jackson's comment by the HUD inspector general
ended with no action taken against him, but the investigators
brought to light friction between the HUD secretary and some
contractors who have long done business with the agency, a number
of them donors to Democrats. On Monday, the IG's office said it had
seen Jackson's latest remarks and "there is nothing more that we
can add."
In the IG probe, some of Jackson's own aides contradicted his
account of one incident in which investigators found the HUD
secretary had blocked a contract for several months to one heavily
Democratic donor. Jackson blamed his aides for the delay in the
award.
Jackson was the first black leader of the housing authority in
Dallas, where his integration efforts caused clashes with some
local homeowners in predominantly white neighborhoods.
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Associated Press writers Marcy Gordon, Ben Feller, Hope Yen and
Devlin Barrett contributed to this report