Government Watchdog Group OPEGA To Investigate MaineHousing Expenses


by Terrilyn Simpson

OPEGA has initiated a rapid response review of Maine State Housing Authority vendor expenditures following the release of a list of questionable expenses revealed in a Maine Wire story. The vendor list was obtained through a Freedom of Access request submitted to MaineHousing by the Maine Heritage Policy Center.

OPEGA — the Office of Program Evaluation & Government Accountability — was slated to review Maine State Housing in the spring. But an increasing number of questions about how MSHA funds are being spent and controversy over a lack of accountability by the MSHA director have propelled legislators to act. The Government Oversight Committee directed OPEGA to immediately undertake a limited scrutinization of MSHA expenses. A larger scale investigation by OPEGA is still slated for later in the year.

OPEGA Executive Director Beth Ashcroft categorized this initial examination as “very focused on MSHA expenditures,” such as payments, sponsorships, donations, travel money, meals…. OPEGA will be looking at vendor names and dollar amounts and noting “anything that sticks out, or that’s not clearly related to the mission of MSHA.”

The first phase, likely to take three to four weeks, will be “getting the data.” What happens next “kind of depends on what we want to look at for supporting documentation.”

Established in 2003, and beginning operation in 2005, the legislative OPEGA is authorized to audit non-State entities receiving State funds or entities established to perform government functions.

Though the vendor list retrieved by Maine Heritage has raised the lid of Pandora’s box, MHPC  has thus far received only a portion of the mandated response to the Freedom of Access Act request filed approximately seven months ago. The vendor list released to date contains names of vendors but MSHA has not yet revealed dates and amounts of payments to vendors.

Caesars Palace. The luxury boutique hotel George. Posh hotel accommodations throughout the country. BYOB dance clubs. Funtown/Splashtown USA. Portland Pirates hockey team. The Great Falls Balloon Festival. Sunday River Ski Resort. A magician. A masseuse. High priced motivational speakers and corporate training companies. Pricey bed and breakfasts. Donations to political groups. Donations to theaters and social justice groups and arts and theater organizations. The list goes on and on.

Even with the omissions, the vendor list was impressive enough to provoke irate demands for explanations from both members of the public and from newly appointed MSHA commissioners — and from legislators.  MSHA Director Dale McCormick has been short on concrete explanations.

Following the release of the vendor list came the discovery that MaineHousing, in the middle of a state wage and benefit freeze, handed out between $144,000 and $147,000 non-performance based bonuses — $1000 to each employee — solely contingent on the recipient having been employed at the housing agency on the last day of 2009.

These revelations followed the discovery by newly appointed commissioners that MSHA had not been considering unit costs when awarding contracts for the construction of low-income housing units — and the revelation that units as miniscule as 1100 square feet were tagged with building costs as high as $314,000 per unit. Points were being awarded for disallowing smoking but not for keeping construction costs down.

Then there was the debacle of shoddy and unsafe conditions at Section 8 low-income housing units in Norway, Maine over which MSHA had ultimate authority. MSHA targeted a single “rogue” inspector with the blame and pulled all Section 8 housing contracts statewide without review or discussion. The Norway situation has precipitated a request from US Senator Susan Collins for a HUD investigation of MaineHousing.

In addition to the HUD investigation and the OPEGA review, a group of 34 Republican state legislators have asked the Maine Attorney General to scrutinize MaineHousing activities — based on the revelations of questionable vendor expenditures and donations to political groups.

The letter to the AG was delivered on the same day as former Turnpike Authority Director Paul Violette pled guilty to felony theft charges for mismanaging funds at the Maine Turnpike Authority.

The OPEGA analysis of MSHA begins in the same week that a legislative bill proposing MSHA director accountability — to MSHA commissioners — is debated in committee by legislators and members of the public.

In addition to blaming the “rogue” inspector, McCormick has gone on the attack, accusing critics of being politically motivated. She’s volunteered for radio talk shows and coined phrases like “audited up the wazoo” — as in “MSHA is already audited up the wazoo……”

But Representative Rich Cebra (R-Naples) who was instrumental in calling for the disassembly of the financial morass at the Maine Turnpike Authority points out that McCormick’s frequent references to audits are misleading — that no one is suggesting that the checks have not been written and cashed by the designated recipients. The type of audit McCormick is talking about is simply a determination that the checkbooks balance — that the money has been spent.

What is called for, he suggests, is a type of forensic audit — a hardhitting financial analysis to determine, for starters, the appropriateness of expenditures. It would determine, for instance, whether stays at pricey hotels and trips to water fun parks and payments to masseuses and donations to political activists and theater and art groups were in keeping with the intended designation of the accounts from which the payments were made.

Senator Margaret Craven (D-Lewiston), a member of the Government Oversight Committee, is critical of MSHA scrutiny — referring to it as a witch hunt. She’s gone on the record in support of the high construction costs of low income housing allowed by MSHA, calling it necessary, and regarding the release of the vendor list obtained by the Maine Heritage Policy Center, Craven said, “the slant is deceiving.” Asked for her objections, Craven referred to the coverage of the information obtained through the FOAA request as ‘trials in the press……”  Said Craven, “I do not support something that is so political and the Maine Heritage Policy Center pretty much runs the governor’s office with its ideas and between the governor… and…the treasurer, I don’t trust when it’s only one side of the story that’s being told, especially by an organization such as the Maine Heritage Policy Center that often really don’t investigate the true facts. And that’s sad…” Craven said she was “glad OPEGA was taking up the ball so we can hear both sides…”

As MSHA investigations move forward in Augusta, the “rogue” inspector, as she has been labeled by MSHA officials, is speaking out, and some of her claims have been independently supported by a former MSHA staff member. There are indications that Kay Hawkins was not charged with conducting all of the inspections — and that a supervisor at Avesta Housing may have stipulated to Hawkins that she — the supervisor — would respond to complaints in one of the worst units and that it was the supervisor — and not Hawkins — who failed to do so. Hawkins was ultimately blamed — and fired.

Hawkins’ side of the story was not acknowledged in the MSHA audit. And both Hawkins and the former MSHA staff member, interviewed independently, indicated that housing inspectors inspect low-income units only once a year unless ordered to re-inspect by a supervisor — and that it would have been impossible for Hawkins to have awareness of problems unless the units were reassigned. Hawkins said other remarks and explanations she made were taken out of context and her 11-year record of positive written evaluations was ignored. Also not included were the details of a dispute Hawkins had had with a supervisor because of Hawkins’ insistence that she be allowed to inspect a house where a landlord was getting paid Section 8 funds for the entire dwelling — and had then sub-divided the house to create additional rental units. Hawkins indicated she was urged to ignore the potential fraud.