Published January 13, 2015
Federal auditors contend that Clinton administration housing officials bowed to political pressure and approved a $9.5 million college dormitory for Alaska Natives that wasn't necessary.
Department of Housing and Urban Development officials tried to block release of the report from the HUD inspector general last winter, but it was resubmitted to the Bush administration and made public March 30.
"It's the first time I've ever run across where they've requested us not to release a report," Frank Baca, head of the Seattle audit office that investigated the case, said Wednesday.
The audit said HUD officials approved the dorm at Alaska Pacific University "without any evidence that there was a need for the project." Local HUD officials calculated that the 40-student dorm should cost no more than $2.3 million -- less than a quarter of the amount approved.
Construction on the dorm has not started, and Baca said the project is on hold.
Investigators said political pressure, not evidence of need, helped the project win approval. Those who weighed in to support the dormitory included Sen. Ted Stevens, R-Alaska, chairman of the Senate Appropriations Committee.
Neither Stevens nor former Housing Secretary Andrew Cuomo responded to repeated requests for comment.
Last December, Deputy Housing Secretary Saul Ramirez wrote auditors asking that the report not be issued.
"We conclude that all findings are wrong," Ramirez wrote. He said auditors misinterpreted federal regulations. His letter did not mention political pressure.
The dormitory is the latest in a series of problems that HUD's inspector general has found in the agency's housing programs for American Indians. Auditors have criticized HUD for building luxury homes for well-connected tribal members while thousands of other Indians live crammed into reservation shacks.
Last fall, auditors found that Washington state's Lummi tribe had misspent up to $1.3 million of $12.4 million in HUD money it got from 1993 to 1999. A 1998 audit of Indian housing programs found that $14 million had been wasted or misspent.
In the March 30 audit criticizing the dormitory, auditors said HUD officials gave no reason for approving the $9.5 million project, even though agency memos "appear to argue against" it.
"We believe these improper actions occurred because HUD officials made decisions based primarily on political considerations," auditors wrote.
In addition to Stevens, auditors said Carl Marrs, head of Cook Inlet Regional Inc., the Alaska Native corporation backing the dormitory, also met with Cuomo to lobby for the project, seeking it under programs for housing low income Indians.
Cook Inlet is one of 13 regional corporations created to manage Alaska Natives' land and resources under a 1971 law Stevens wrote. The government money for the project is funneled through a nonprofit subsidiary, the Cook Inlet Housing Authority.
A CIRI official defended the project.
"The way to reduce the need for low-income housing is to educate Alaska Natives effectively so they don't need it," said Keith Sanders, CIRI's general counsel. "I think that's the message that was conveyed to the secretary and the senator."