The U.S. Department of Housing and Urban Development is auditing financial and management operations at the Philadelphia Housing Authority in the wake of allegations it asked vendors to donate to certain charities and events benefitting its executive director, Carl Greene.
The PHA’s board suspended him last week as it reviews allegations of sexual harassment by Greene and settlement payments the authority’s insurer supposedly made to resolve them.
The agency has $60.7 million of outstanding Series 2002A capital fund program revenue bonds, which are backed by HUD allocations.
Assured Guarantee Municipal Corp. insures the Series 2002A bonds. Fitch Ratings and Standard & Poor’s rate the Series 2002A bonds AA. Moody’s Investors Service rates the bonds Aa3.
In an Aug. 26 letter to PHA chairman and former Philadelphia Mayor John Street, HUD said it will conduct a review during the next two months. A potential forensic audit may follow. Street was mayor from 2000 to 2007.
“We are very concerned about the appropriate use of taxpayer dollars and so will be paying close attention to the team’s findings,” the letter from HUD deputy secretary Ron Sims reads. “Accordingly, I have asked the HUD team to report back to the department within 60 days regarding their preliminary findings and, if recommended by the team, we are prepared to require a forensic audit of PHA’s financial and management operations.”
Local reports indicate that PHA officials pressured authority executives and contractors to contribute to organizations and events associated with Greene. In 2008, the agency allegedly asked vendors to donate to the nonprofit Tenant Support Services Inc. to help raise money for a dinner celebrating Greene’s 10-year anniversary at the PHA.
In addition, an insurer has made settlement payments of $648,000 to women claiming they were sexually harassed by Greene, without board knowledge, according to the Philadelphia Daily News. An additional $250,000 settlement is pending.
A PHA spokeswoman could not be reached by press time. Street did not respond to an e-mail.
Other capital fund program revenue bonds on parity with the PHA’s Series 2002A bonds include Series 2002B, Series 2003C, and Series 2003D bonds, all issued by the Philadelphia Redevelopment Authority.
Debt-service coverage for all four series is 4.86 times and could withstand a further 79% reduction in funding, according to Moody’s.
In response to the HUD audit, Mayor Michael Nutter last week threw his support behind the action.
“I am deeply concerned by the recent revelations regarding PHA executive director Carl Greene and by the board’s oversight of the organization,” Nutter said in a statement.
