To recap, federal prosecutors had alleged 70-year-old developer Lloyd Boggio of Carlisle Development Group and others defrauded the government out of millions. They did so by padding South Florida affordable-housing projects to get federal tax credits and grants, then keeping the excess.
Last month, Boggio pleaded guilty and agreed to turn over his Coconut Grove mansion and an initial $2 million in cash to begin making amends.
This waste of taxpayer money happened because a key watchdog agency seemingly fell asleep at the switch: the Florida Housing Finance Corporation (FHFC), led by Steve Auger, its executive director.
Court records tell us “FHFC authorized the allocation of (the) tax credits and grant monies,” which raises the question of how no one at the agency had an inkling they were getting swindled.
But the corporation was created by the state Legislature, which means it should answer to some pretty powerful people. The following lawmakers should be outraged their own constituents got screwed and should demand answers:
— Jack Latvala, the incoming Senate Appropriations chairman. He formerly headed the Appropriations Subcommittee on Transportation, Tourism, and Economic Development, which had oversight of the agency.
Several years ago, Latvala’s feud with Auger nearly cost him his job. Also, Latvala already is loaded for bear over municipal utilities’ storm preparedness, for one example, so the agency should tread lightly if he starts asking questions—which he should.
— State Sen. Anitere Flores. She also represents part of Miami-Dade and has the ear of Senate President-designate Joe Negron.
— State Reps. Jose Felix Diaz and Carlos Trujillo. The money that was heisted was supposed to go toward housing for Miam-Dade’s neediest citizens, many of whom these two lawmakers represent.
Both have been in House leadership, with Diaz most recently heading the Regulatory Affairs Committee and Trujillo chairing the Criminal Justice subcommittee. Of concern to the agency: Diaz is familiar with affordable housing issues and Trujillo is rumored to be on the short list for chairman of House Appropriations.
We’ll start things off with a little research and some suggested questions.
Many of the frauds involved an arrangement where tax credits are awarded to a developer for a proposed affordable housing project, and those credits are good for 10 years.
Those tax credits are then sold by the developer to buyers who then apply the credits against their own federal tax obligation. So if Carlisle was awarded, say $1 million in tax credits, that million is actually worth $10 million in cash or equity.
That means the $36 million they stole was actually worth (or could have been worth) more than $260 million.
Now the questions:
— What was it about the culture or staff at FHFC that let Boggio and Co. think they could defraud the state and federal governments?
— Was the relationship between Auger and Boggio too cozy, as some suggest?
— Has Auger taken any steps to assume responsibility for this?
— What safeguards could be put in place at FHFC to detect this kind of fraud in the future?
It bears repeating that it’s odd no one is talking about this. Maybe that will change between now and next session.