HUD finds conflicts on housing authority board

Posted Nov. 02, 2009, at 10:27 p.m.

BREWER, Maine — Officials with the U.S. Department of Housing and Urban Development have found that federal violations occurred when officials from the Brewer Housing Authority authorized contracts with the Ellen M. Leach Memorial Home.

“There is ample evidence that violations of the HUD conflict of interest regulations have taken place,” says an April 21 letter from HUD to Bangor attorney Edward Gould, who is representing the housing authority.

The Bangor Daily News filed a Freedom of Information Act request with HUD to get the correspondences about the possible conflict of interest.

The violations cited by HUD involve three people:

• Frank McGuire, who is president of the Ellen M. Leach Memorial Home board and who sits on the housing authority’s board of commissioners.

• Dorothy “Betty” Igoe, who was the executive director of the housing authority until January 2008 and who now is the Ellen M. Leach Memorial Home executive director.

• Don Lewis, a former housing authority and Ellen M. Leach Memorial Home board member whose fourth term on the housing authority board ended in March.

“The irony is the Leach home [board] is completely voluntary, with absolutely no compensation. So is the housing authority,” McGuire said Monday.

The Leach home was built in the early 1990s on Brewer Housing Authority land and has always had a close partnership with the housing authority, he said.

“It’s always been seen as a good thing that there was a relationship between the two,” McGuire said.

The Leach home Web site, in fact, states, “The Ellen M. Leach Memorial Home is managed by our Executive Director in cooperation with the Brewer Housing Authority.”

HUD found that “a violation of the conflict rule occurred when BHA authorized and entered into Section 8 contracts with Leach Homes while the three of them held both their BHA positions (or within one year thereafter) and their [Leach Home] positions …,” the April letter says. “[N]ew Section 8 contracts were in fact entered into while the two commissioners served on the two boards and the former executive director was still employed at BHA.”

The letter also referred to “frequent written communications over the last few years between Mr. McGuire and other members of his [law] firm and MaineHousing with regard to management and occupancy issues at Leach Homes” but, “It is not known whether the firm was billed for these services.” McGuire works at the Bangor-based law firm of Rudman & Winchell.

Gould has maintained all along that both boards are voluntary, there is no monetary gain by any of the parties involved, and there is no conflict of interest. He said Monday that he would understand HUD’s opinion if someone were making a profit.

“Here we have folks that are trying to do a public service,” he said.

HUD responded to Gould’s statement about monetary gains in its April letter, “it is not necessary to a finding of a violation that either director hold a financial interest.”

Brewer City Councilor Larry Doughty, who is the council’s liaison to the housing authority, asked that HUD look into the matter back in February. He said he was bothered by McGuire being on the board while also doing legal work for the Leach home.

“I had concerns about him being on both boards at the same time,” Doughty said. “One of my concerns was in the [possible] conflict of interest.”

Several letters have been sent back and forth between HUD and the two Brewer agencies over the last couple of months, but the final resolution for the conflict is still unknown, Kristine Foye, HUD deputy regional director, said last week.

“We’re actually still in the process of resolving the issue,” she said.

HUD is asking for three major things to resolve the conflict, according to a Sept. 15 e-mail from Gould to Gordon Stitham, Brewer Housing Authority’s executive director.

The e-mail says “HUD would drop any charges against BHA in return for the following:

ä McGuire would resign from one of the boards. The preference would be to resign from the Brewer Housing Authority board, but that was not a condition of any settlement.

ä McGuire and Rudman & Winchell would agree that neither he nor the firm would provide services to the Brewer Housing Authority for one year after his resignation.

ä Brewer Housing Authority would lose an estimated $8,000 to $9,000 in administrative fees for the one-year period during which the conflict of interest occurred.

Neither McGuire nor Gould wanted to get into specifics about the possible final resolution, but both said they would abide by whatever HUD officials decide.

“We hope we can get it resolved in fairly short order,” Gould said.

Meanwhile, HUD officials also are investigating whether any federal laws were broken when the Brewer Housing Authority bought land in October from Calvin Bubar, a former board chairman who resigned in July. City leaders have hired an attorney to investigate whether any laws — particularly the state’s conflict-of-interest law — were broken. Bubar and the BHA have denied any wrongdoing.

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