Peter Schorsch
Tip o’ the hat to the Times’ Susan Taylor Martin for covering a blistering audit of the Florida Housing Finance Corp. (FHFC), which is supposed to be the steward of both state and federal affordable housing money.
But let’s also give some credit where it’s due: In a series of three articles called “Who watches the low-income housing watchmen?” over September and October – which are here, here and here – I kind of saw this train wreck coming.
In glorious detail, Martin reviews the 80’s-style “Masters of The Universe” excesses that Steve Auger, the agency’s executive director, lavished on lenders and board members.
How about “a $52,000 dinner (for lenders) that featured filet mignon, broiled lobster tails and a bar stocked with deluxe brand liquors”?
Or, at a board reception, shelling out “$300 for a bartender, $425 for a pork carving station and $420 for a Spanish charcuterie station”?
The mouth waters—and the fists should clench over the waste of taxpayers’ dollars.
But wait, there’s more.
At a time “when thousands of Floridians were waiting for help in saving their homes,” Martin writes, “the agency (also) awarded a total of nearly $443,000 in bonuses to its employees.” Nice work if you can get it.
And that’s just in the first three paragraphs. Auger, to no surprise, offered a meek defense to the costs, calling them “ordinary and necessary expense(s).”
But readers should recall I was ringing the bell about this fiasco in the making.
Let’s not forget, as a federal criminal plea deal put an end to a $36 million housing fraud, I asked, “What will legislators do now to make sure it doesn’t happen again?”
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.
What happened? Yep, Auger and his FHFC watchdogs fell down on the job, or as I said back then: “A heist on Uncle Sam and the poorest among us.”
“How does something like this happen without (Auger & Co.) knowing — or at least having a suspicion? Were these transactions not being audited? How did they not know this was going on for five years? If they didn’t know, should they have known?” I said in that first post.
“Let’s put it even more pointedly: Did Auger or others at FHFC know about it and whiff — or were they all asleep at the wheel? Now that the criminal side of this fiasco is coming to a close, the legislative side needs to ramp up by asking: Who is responsible?”
The audit, among other things, notes the agency “did not require sufficient documentation from underwriting agencies to support their denial of mortgage assistance to some applicants” and “did not take adequate steps to ensure that electronic fund transfers were going to authorized recipients,” according to Martin.
So, with the 2017 Legislative Session a couple months away, let me repeat some more questions to Jack Latvala, the Senate Appropriations chair, whose feud with Auger a few years ago nearly cost him his job, and to other lawmakers.
They referred to the fraud at the time, but with a little rewording could just as well apply to the recent extravagances.
“What (is) it about the culture at FHFC?” I asked in October. ” … Has Auger taken any steps to assume responsibility for this? What safeguards could be put in place at FHFC?”
Because with the state’s budget looking iffy at best, and many thousands of Floridians deserving an honest broker when it comes to their homes, we can’t afford any more Spanish charcuterie stations.
