Housing Board Moves to Clamp Tighter Rules on Agency’s Contracts

The Los Angeles City Housing Authority Board of Commissioners appointed a special committee on Friday to tighten contracting regulations and to ensure that the procedures are followed by Executive Director Leila Gonzalez-Correa.

The action came in response to a report Friday in The Times that Gonzalez-Correa had violated federal procurement regulations on at least six occasions while awarding Housing Authority contracts to her acquaintances and to political supporters of Mayor Tom Bradley.

“The commission should play a much more active role in this,” said Dori Pye, who along with the other board members had been unaware of the contracting irregularities. Pye added in an interview, “The rules have to be heeded. From here on in they will be heeded. I can assure you, as a commissioner, of that.”

Gonzalez-Correa was expected to report on the contracting violations Friday at the request of Bradley, but was unable to attend the board meeting because she was ill, her aides said. A Bradley spokesman said the mayor was not satisfied with a memo explaining the violations that was submitted by Gonzalez-Correa.

In addition to the six violations of federal contracting procedures, The Times also has learned that Gonzalez-Correa was told by city officials that she should have solicited formal competitive bids in awarding other contracts, but she ignored the warnings.

In one case involving the refinancing of the Owensmouth Gardens apartment complex, Gonzalez-Correa was advised by the city attorney’s office in November, 1987, and later by the chief administrative officer of procurement rules that required her to seek other financial firms capable of handling the transaction.

Instead, Gonzalez-Correa continued to deal exclusively with a group of financial consultants and lawyers that she had invited to put together the multimillion-dollar refinancing package, records show. The financial team, which received about $500,000 in commissions and fees, included Donald Carter, president of Benton Mortgage Co. of Tennessee and a friend of Gonzalez-Correa, and two Bradley allies--former City Councilman David Cunningham and former Congresswoman Yvonne Brathwaite Burke.

‘Could Be Challenged’

Gonzalez-Correa, with the help of Deputy Mayor Grace Davis, persuaded commissioners to approve the Benton proposal, despite concerns expressed to her at the time by the city attorney’s office that she had failed to invite other companies to participate.

“This could be challenged by other (companies) that feel they might have been able to do as good or better a job,” said Deputy City Atty. Dov Lesel, according to transcripts. Lesel said Gonzalez-Correa avoided an outright violation of federal contracting regulations by stating in reports that she had made informal contacts by telephone with other firms.

Gonzalez-Correa also acknowledged in recent interviews that the Housing Authority’s contracting practices are in need of reform because of sloppy accounting procedures. In several cases, Gonzalez-Correa has issued purchase orders to her acquaintances and to Bradley supporters without requiring any accounting of the services provided, records show.

In once case, Washington attorney Jane Lang received $24,666 in legal fees after submitting monthly billing statements without the customary documentation of services, invoices show. Lang is a former general counsel of the U.S. Department of Housing and Urban Development who met Gonzalez-Correa several years ago as a fellow housing lawyer.

“We have to institute a more careful processing of bills and all that,” Gonzalez-Correa said in the interview. “I am going to ask Jane to send us an absolute printout of everything she’s done for the Housing Authority. Hour by hour. She’ll do it. I will take immediate steps to correct it.”

Last month, the city attorney’s office advised Gonzalez-Correa to begin using standard employment contracts--instead of blanket purchase orders--to spell out specific consulting and other services purchased by the Housing Authority. This recommendation is among several to be considered by the special committee of three commissioners established Friday.

Bradley must shoulder much of the blame for the Housing Authority’s current contracting troubles because they are strikingly similar to those that occurred under Homer Smith, Gonzalez-Correa’s successor, said City Councilwoman Joan Milke Flores.

“The mayor took so much flak when Homer was there and they were good friends and all. . . ,” Flores said. “You would think that (Bradley) would say, ‘I’m going to make sure that this never happens again. I’m going to assure that there are checks and balances and I’m going to instruct my commissioners.’ ”

Flores said she advised the Board of Commissioners several months ago to hire a full-time analyst to keep track of spending activities by Gonzalez-Correa and her staff. The board on Friday postponed a motion to recruit an analyst.

Several board members on Friday expressed surprise that Gonzalez-Correa had issued contracts exceeding $10,000 without soliciting competitive bids or seeking board approval as required by federal regulations and the Housing Authority’s own purchasing policy.

In her report on contracting practices submitted to Bradley and the board on Friday, Gonzalez-Correa did not report three of the six procurement violations that are documented in Housing Authority records. These involved a $44,979 training contract to Carlos Garcia, a former colleague of Gonzalez-Correa; a $35,000 contract for legal services to attorney Yvonne Brathwaite Burke, a key Bradley ally; and a $9,500 contract to the accounting firm of Deloitte Haskins Sells, a Bradley contributor. All three contracts were issued by Gonzalez-Correa without competitive bids.

In the case of Lang, Gonzalez-Correa reported Friday that the Housing Authority is preparing to invite other attorneys to vie for the legal services that Lang currently provides.

Officials at the U.S. Department of Housing and Urban Development, the federal agency that funds the Housing Authority, offered no reaction on Friday to the contracting violations. HUD officials in Los Angeles were unaware of any irregularities in the hiring of consultants or other contractors, in part because the federal agency has not conducted a comprehensive audit of Housing Authority books in five years, said HUD spokesman Reagan Reed. The Housing Authority has been designated “operationally troubled” by HUD since May, 1987.

HUD officials “will most likely tell the Housing Authority to get its act together” in the wake of the contracting violations, said Lesel, the deputy city attorney who serves as the housing agency’s legal counsel.