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Maine State Housing Authority board chairman denies ‘witch hunt,’ says affairs improving at agency

Posted June 08, 2012, at 5:34 p.m.

AUGUSTA, Maine — The chairman of the Maine State Housing Authority board said Friday he didn’t take part in a “witch hunt” aimed at removing former director Dale McCormick.

Peter Anastos told lawmakers on the Legislature’s Government Oversight Committee he was trying to obtain more information about MaineHousing programs and refocus a quasi-state agency that had lost sight of its core mission.

Anastos, a Yarmouth developer, said that the MaineHousing board’s relationship with agency management has improved markedly since McCormick’s March resignation. It’s easier for board members to get information, he said, and the authority is focusing on the quality of the housing units it oversees.

Anastos’ testimony came two weeks after the Legislature’s investigative arm, the Office of Program Evaluation and Government Accountability, released its review of $4.3 million in MaineHousing spending from 2007 to 2011, which found the bulk of the spending examined was consistent with the housing authority’s mission.

The Government Oversight Committee had requested OPEGA’s review in January amid a firestorm of criticism directed at MaineHousing by Anastos, State Treasurer and MaineHousing board member Bruce Poliquin, and the conservative Maine Heritage Policy Center alleging inappropriate and wasteful spending.

The authority’s expenditures came into question after the release of documents obtained by the Maine Heritage Policy Center showing authority expenditures at high-end hotels for conferences and contributions to outside advocacy organizations. The criticism focused squarely on McCormick, the last appointee of Democratic Gov. John Baldacci serving as the head of a state agency.

While she denied accusations of wrongdoing, McCormick resigned in March. McCormick couldn’t be reached for comment Friday afternoon.

The day before OPEGA released its review last month, the left-leaning Maine’s Majority, a Portland-based nonprofit organization, published several emails among Anastos, Poliquin, Maine Heritage Policy Center staff and others that Maine’s Majority said showed collusion among government officials and the conservative center to force out McCormick for political reasons.

“We weren’t on a witch hunt,” Anastos said Friday. “I have about 90 emails to Dale where I was trying desperately to get information.

While OPEGA’s review largely cleared MaineHousing managers of fraud and wrongdoing, the examination raised red flags about spending on travel and contributions to outside organizations. The review also recommended that MaineHousing require more detail from employees seeking expense reimbursements, cut back on employees’ use of personal credit cards for business expenses, and better document all expenses and make sure they directly related to the agency’s mission.

On Friday, the housing authority’s interim director, Peter Merrill, told lawmakers that the agency is cutting back on employees’ use of personal credit cards, implementing stricter accounting standards and taking steps to rein in travel expenses.

“We have implemented corrective measures, and we will further refine them,” Merrill said.

MaineHousing already had been taking many of those steps, Merrill said, to comply with recently passed legislation that sets rules for the governance, spending and transparency of quasi-state agencies such as MaineHousing and the Maine Turnpike Authority.

The OPEGA review also had questioned whether MaineHousing staff members needed to attend as many conferences as they did, pointing out that 62 authority staffers attended one or more conferences during the five-year review period.

Anastos told lawmakers that frequent travel led McCormick and authority staff members to neglect their core jobs, resulting in substandard conditions at some MaineHousing units.

“This agency was off doing carbon trading, gender issues, and social issues while safe and decent housing was being neglected,” said Anastos, who was appointed to the MaineHousing board by Gov. Paul LePage in October 2011.

The OPEGA analysis also raised questions about some of MaineHousing’s contributions to outside organizations. OPEGA flagged about $25,000 in housing authority contributions to 10 outside organizations, including $7,600 to Maine Inside Out, a performing arts group that works with incarcerated populations, and $200 to EqualityMaine, an advocacy group for Maine’s lesbian, gay, bisexual and transgender populations.

“Contributions to political organizations are fine for individuals, but should never be made with the taxpayers’ money,” Anastos said.

MaineHousing’s annual operating budget is about $14 million, which is funded through investment revenue, interest fees on mortgages and fees the authority collects for administering federal programs. The authority received $374,000 from the state budget in fiscal year 2011, all of which was directed to homeless shelters, according to MaineHousing.

Legislators on the Government Oversight Committee largely withheld conclusions about MaineHousing activity Friday as OPEGA is planning a more comprehensive examination of the agency.

Some committee members, however, lamented the political controversy that erupted.

Sen. Bill Diamond, D-Windham, cautioned Anastos against using “sensational language” to describe the situation. Sen. Nancy Sullivan, D-Biddeford, said such political fights can detract from Maine’s efforts to attract businesses to the state.

“Big companies coming in and little companies coming in want to know that their state officials get along,” she said.

But Rep. David Burns, R-Whiting, praised Anastos for being honest. “There was a lot of shoddy things that certainly weren’t being done right,” he said.

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