Hud IG: City run by new HUD nominee misused HUD money while new HUD nominee was mayor

In a changing world, it’s good to know that some things don’t change … like the ability of this White House to vet it Cabinet-level appointments. Barack Obama named Julian Castro as the new Secretary of Housing and Urban Development last week, but no one checked with the Inspector General at HUD first. Late yesterday, Politico also named Castro as a subject of criticism in a 2012 IG report that alleged San Antonio misused HUD funds while Castro was mayor:

San Antonio failed to properly spend funds approved by Congress to combat the housing crisis while President Barack Obama’s expected nominee to run the Housing and Urban Development Department was mayor of the city, according to a 2012 report from the agency’s inspector general. …

San Antonio was awarded $8.6 million from HUD in 2008 as part of the national Neighborhood Stabilization Program. The city used the money to buy, refurbish and resell homes left vacant after eviction and to also renovate large apartment complexes in the city that were rented out to lower-income tenants.

The HUD IG audited how the money was being spent from 2009 to 2011 and found that city officials had awarded $2.5 million in renovation contracts without a competitive bidding process. Castro, 39, became mayor in May 2009, a job he continues to hold.

The report also found that the city misused roughly $1.1 million when acquiring and fixing properties because some of the properties were not put toward housing lower-income families as required by HUD.

This suddenly makes Byron York’s analysis even more critical. The defense for Castro will no doubt revolve around the fact that the mayor in San Antonio is largely ceremonial. It holds no executive power at all; the city is actually run by the city council and a city manager that runs all of the executive functions in San Antonio, as city manager Sheryl Sculley’s website explains.

But that lack of executive power that will serve as a defense against the conclusions of this IG report also raises questions about what qualifications Castro has in running a vast federal bureaucracy with a current annual budget of $42 billion. Other than being a mayor with no responsibilities at all except community outreach and schmoozing business leaders, Castro’s money comes from speechmaking and a book advance, and a referral fee from a personal-injury lawsuit which York explains at length.

Even that defense will still snag Castro on the IG report, though. One of his bragging points is that he “brought a sense of urgency” to urban revitalization — which one would presume had some connection to HUD efforts in San Antonio. Did Castro miss the abuse and waste of HUD money in San Antonio? Did he ever go on record challenging Sculley’s administration of those funds, or did he play along with it?

Those questions should be asked in Castro’s confirmation hearing, as well as a more basic one: Is a man who gives speeches and schmoozes investors really the most qualified person Obama could find to run a $42 billion agency?

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David Strom 8:31 AM on October 02, 2022