BREWER, Maine — A U.S. Department of Housing and Urban Development official from Boston arrived in Brewer on Monday to begin reviewing the Brewer Housing Authority’s financial books.
The official is looking to see whether any federal funds were used to buy land earlier this month from the housing authority’s former board chairman, Calvin Bubar, and whether there was a conflict of interest.
Kristine Foye, HUD deputy director for Region 1, said Monday that the agency’s review of the housing authority’s books should take more than a day.
“We’re going to review all the files to determine if federal funds were used in the sale of the land,” she said last week.
If it’s determined federal funds were part of the $280,000 the authority used to buy Bubar’s Chamberlain Street land on Oct. 7, then “we can talk about the next step,” Foye said.
Meanwhile, the Maine Attorney General’s Office has informed Brewer city leaders that it was not equipped to investigate conflict of interest questions raised by the City Council.
“This office does not ordinarily advise local units of government in such matters and we are not staffed to the level necessary to investigate matters of conflicts of interest at the local level,” Chief Deputy Attorney General Linda Pistner wrote in a letter Monday to City Manager Steve Bost.
“We’re going to defer to the HUD review of this,” she said by phone on Monday.
The Brewer City Council sent a letter to Maine Attorney General Janet Mills on Oct. 14 asking her to investigate whether any laws were broken when the housing authority purchased 258 Chamberlain St. from Bubar, who resigned from its board in July.
A second letter to the Attorney General’s Office, written by state Sen. Richard Rosen and state Rep. Michael Celli, was issued on Friday. It asks for a review of the land deal’s legality.
Bubar was chairman of the housing authority’s board of commissioners while discussions were held about the local agency buying his land, according to minutes of the board’s meetings. The 4.16-acre parcel is valued by the city for property taxes at $88,000. The purchase price was more than three times the assessed value and more than twice what Bubar paid for it in 2007.
The housing authority, in partnership with the social services agency Penquis of Bangor, plans to build a $6 million 32-unit elderly housing project on the land. The housing authority would own the land and operate the facility, which would be built by Penquis.
Penquis has also agreed to “buy the land from Brewer Housing Authority” for the full purchase price if it fails to develop the land within two years, Gordon Stitham, the housing authority’s executive director, has said.
Both Penquis and the Brewer Housing Authority rely on federal HUD money to operate.
In the letter to Bost, Pistner says, while the Attorney General’s Office would not investigate, her agency would review an independent investigation into the possible conflict of interest.
“You may wish to retain counsel to undertake an investigation of this potential conflict of interest on behalf of the City,” she wrote. “If the results of such investigation indicate that a violation of the conflict of interest provisions [in state statutes] has occurred, we would be happy to review the report of investigation.”
The Maine law listed states: “No employee or commissioner of any authority may, within two years of that service … voluntarily acquire any interest, direct or indirect, in any contract, project or property included or planned to be included in any project of that housing authority over which the employee or commissioner has ex-ercised responsibility, control or decisions during tenure with the authority.”
Any violation of the state’s conflict of interest law is a Class E crime, which is punishable by up to six months in jail and a $1,000 fine.
Bubar’s attorney, Joseph Ferris, who also is a City Council member and deputy mayor, said on Monday that his client did have a conflict of interest, but that Bubar dealt with the conflict legally.
“Cal excused himself [during discussions] and recused himself from the vote” on whether the housing authority should purchase his land, Ferris said. “Then he resigned from the board. I think he applied all the rules properly.”
Bubar and his wife, Nancy, purchased the Chamberlain Street land for $120,000 in mid-September 2007, and one month later Bubar was appointed to the board of commissioners. He was made chairman in January 2008, and according to board meeting minutes, discussed the possibility of selling his property located on Cham-berlain Street to the housing authority at least twice.
In addition, Bubar technically still was on the board when the purchase and sale agreement was signed on July 9. He had hand-delivered his resignation letter to the city the day before, but still was a board member until the Brewer City Council accepted his resignation on July 14.
Attorney Ed Gould of Bangor has been hired to represent both Stitham and the housing authority, which caused a little confusion with the Attorney General’s Office because “historically they have used” Joel Dearborn, Pistner said.
Foye said that the agency’s review of the housing authority’s books “may go beyond Tuesday.” She said if it’s determined that no federal funds were used to purchase Bubar’s land, HUD would cease its review, and its official would return to Boston.
The Brewer Housing Authority is supported by state and federal funds and funds from renters. Stitham has said Bubar’s land was purchased with local program funds.