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Posted on 05/13/2006 1:34:25 AM PDT by SUSSA
Getting on the right government list can make you wealthy. That's the gist of what Alphonso Jackson, U.S. Secretary of Housing and Urban Development, told a group of influential minority business leaders in Dallas on April 28.
During that talk Jackson warned HUD contractors against criticizing President Bush. A Dallas Business Journal report on his comments has led to a political firestorm, calls for his resignation, a formal probe by the HUD Inspector General and an apology from Jackson.
Because of intense interest in that April 28 talk, here are additional details of Jackson's comments, which included the story of a prospective contractor who, on the verge of winning a HUD deal, criticized President Bush and didn't get the work. A HUD spokeswoman later said the story involved an advertising contract.
In sharp contrast to the political reaction to that story, Jackson's tale evoked laughter from the business executives he addressed on April 28. Before joining the federal government, Jackson continued during the Dallas talk, he was "naïve about how things worked in Washington."
"After about six months on the job, I had a person come in and say, 'I don't think you understand how government works. We don't bid out anything in government.' I said, 'What do you mean? That's illegal.' He went on about the lists people get on.
"A lot of blacks and Hispanics don't know about the lists," Jackson said. "I didn't know about this. So we started this process where every time a businessperson of color came in to see me, I'd tell them, 'Go down to the (minority small business) office and get registered -- then I can work with you.
"The strange thing about the situation is all you have to do is pick three people off the list, then you can decide which one you're going to use, as long as they're on that list."
Jackson also told the group about a contractor who started with a $50,000 HUD contract in 1992. About six months ago, Jackson said, the agency terminated the contract and redistributed the work to three smaller, disadvantaged firms.
"This is going to astound you," he said. "When we terminated the contract it was worth $111 million. That's how government works. Once you get the contract, they just keep giving you tax dollars." HUD awards $1 billion annually
HUD's 2006 budget is about $28 billion, down from $31 billion in fiscal 2005. It's the 18th largest department in terms of contracts awarded, said Paul Murphy, president of Eagle Eye Publishing, a northern Virginia company that tracks federal contracting trends.
The bulk of HUD's money goes to operations and grants, not bidded-for services. About $1 billion goes to external contracts. In fiscal 2005, HUD spent more than $4.5 million on nine advertising-related contracts.
It's highly unorthodox for a cabinet member to delve into individual contracts, Murphy said.
"For a cabinet-level secretary to be involved in an advertising contract, that's really getting down in the weeds," Murphy said.
In the government's competitive bid process, federal agencies including HUD are required to get at least three responses before awarding a contract.
"They're supposed to consult three bidders and decide what's the best value," Murphy said.
It's plausible that HUD recently canceled a big longstanding contract and spread it around to smaller companies, Murphy added. Washington bureaucracies have been urged by political leaders to "unbundle" large contracts and put more work in the hands of small businesses, he said. A friendly crowd
Jackson on April 28 was speaking to a receptive audience. The invitation-only event, a chairman's forum of the Real Estate Executive Council, was held at Dallas' swanky Crescent Court Hotel and attracted some of the country's most successful and powerful business executives.
Among them were Victor MacFarlane, managing principal of San Francisco-based MacFarlane Partners, a $10 billion real estate investment firm; and the Rev. Kirbyjon Caldwell, a Bush confidant and senior pastor of Windsor Village United Methodist Church in Houston. Jackson in his speech called Caldwell "a frequent guest in the Lincoln bedroom."
Also on hand were former Dallas Cowboys players Roger Staubach (who was also there as a speaker), Emmitt Smith and Dat Nguyen. Staubach heads a large international real estate firm based in Dallas. Smith and Nguyen are getting started in real estate investing.
The housing secretary told the group that HUD provides "business opportunities for many in this room to get rich."
"My task is to help you do work with and for the federal government," he said. "Whether it's HUD or another agency, the opportunities are there. The most amazing thing I've ever seen is the amount of contracts we give out every day. One contract can make you wealthy."
For businesses seeking government work, one contract is unlikely to lead to wealth, business observers say.
"It sounds so simple," said Catherine Simpson, executive director of the Fort Worth Women's Business Center. "I wish it were that easy."
cperez@bizjournals.com | 214-706-7120 and cwatt@bizjournals.com | 214-706-7123
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I'm glad Mr.Jackson is exposing this.
This guy Jackson is not just corrupt, he's stupid for admitting it in an open forum. He's just giving the Democrats more to reason to scream culture of corruption.
Sounds like Jackson is on a personal power trip. It's very sad. He could be campaigning for cleaning up HUD. All my adult life I've heard of one scandal after another at HUD.
He kinda spelled out why, didn't he? Perhaps he blundered into doing right for all the wrong reasons.
Yeah he's been on a power trip since he was head of the Dallas Housing Authority. Republicans don't need this crap, especially now. Hopefully, Bush will bounce him quickly.
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From another article about his talk:
" After discussing the huge strides the agency has made in doing business with minority-owned companies, Jackson closed with a cautionary tale, relaying a conversation he had with a prospective advertising contractor.
"He had made every effort to get a contract with HUD for 10 years," Jackson said of the prospective contractor. "He made a heck of a proposal and was on the (General Services Administration) list, so we selected him. He came to see me and thank me for selecting him. Then he said something ... he said, 'I have a problem with your president.'
"I said, 'What do you mean?' He said, 'I don't like President Bush.' I thought to myself, 'Brother, you have a disconnect -- the president is elected, I was selected. You wouldn't be getting the contract unless I was sitting here. If you have a problem with the president, don't tell the secretary.'
"He didn't get the contract," Jackson continued. "Why should I reward someone who doesn't like the president, so they can use funds to try to campaign against the president? Logic says they don't get the contract. That's the way I believe."
Cal Jillson, a political science professor at Southern Methodist University, said canceling a government contract due to political views "is not a door you want to open."
"Whether or not it's legal, it certainly draws your judgment and the judgment of your office into question," Jillson said. "It's just not the tone you want to set."
Told of Jackson's comments, Mary Scott Nabers, a government-contracting consultant in Austin, had a briefer initial reaction. "Oh, my goodness gracious," she said. "
Inspector General Probes HUD Chief Comment
By STEPHEN OHLEMACHER
Associated Press Writer
WASHINGTON (AP) - An inspector general is investigating Housing and Urban Development Secretary Alphonso Jackson's comments to a business group that he rejected an advertising contract because the contractor had criticized President Bush.
"We have received a number of complaints from the public as well as from members of Congress," Michael Zerega, spokesman for HUD's inspector general, said Friday. "We are reviewing this matter and will look to the facts and any applicable law or requirements."
(snip)
"Alphonso Jackson has admitted that what he said earlier was improper, that it was a mistake and the president accepts that and still supports a man with whom he's had a long and close relationship," White House press secretary Tony Snow said.
(snip)
"Contracts may not be awarded on the basis of personal or political favoritism, and all potential contractors should be treated with complete impartiality and with preferential treatment for none," said the memo, signed by John Luckey, a lawyer with the nonpartisan research service.
(snip)
"Secretary Jackson was bragging not only about violating contracting law, but also about violating someone's Constitutional rights," Lautenberg said in a statement. "This is a serious matter and it deserves a serious response from the President."
Christopher Yukins, co-director of the Government Procurement Law Program at George Washington University, said politics is not supposed to play a part in awarding government contracts.
"The basic rule is that procurement decisions have to be based upon reasonable criteria, they have to be based upon reasonable factors," Yukins said. "A purely political decision would not be considered a reasonable factor in awarding a federal contract and it would be simple for the contractor to challenge this as an unreasonable, irrational decision."
exerpt:
http://www.federalnewsradio.com/index.php?nid=78&pid=&sid=786525&page=1
The thing is, that is how business is done in nearly every government agency in Washington.
BUT.... you aren't supposed to talk about it openly and it isn't supposed to get out to the 'masses'.
We need to abolish HUD and about 9/10ths of the Federal Government of the United States and that's just for starters.
thnx for those links. I have a feeling this will turn into a big story. However, the focus of the MSM will be on the corruption of the Bush admin, rather than the innate corruptibility of expanded government.
Might this story deserve a place on the sidebar?
Yeah, I hope Bush jumps on this fast and dumps Jackson with a big public display and statement that he will not tolerate this kind of corruption in his administration. He needs to get ahead of this story or by November the press will be making it sound like Watergate and Whitewater rolled into one.
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