Massive Abuses, Miscues Uncovered

Investigators examining the Chicago Housing Authority have found an agency crippled by serious management problems and widespread abuse.

Former U.S. Atty. Anton Valukas, hired last year to investigate wrongdoing in the CHA after word broke of a pension scandal, announced in June the agency had lost more than $26 million in just three years, and that amount is expected to grow.

Among his findings: $15.3 million in lost pension assets, $4.3 million in stolen health insurance premiums, about $200,000 in improper insurance commissions and at least $6.4 million in fraud and wrongdoing by outside vendors and CHA workers.

About $3 million has been recovered, and the Department of Housing and Urban Development has authorized Valukas to file suit to collect more money.

Since the federal takeover of the CHA, dozens of internal audits have been released, detailing a bungling bureaucracy that often cannot meet tenants’ basic needs. In December, 1992, for instance, the CHA reported 20,805 work orders outstanding; many were awaiting routine materials.

The CHA also fails to collect more than $1 million in rent each year.

Audits, reports from the CHA’s inspector general and congressional testimony revealed other abuses and management problems. A sampling:

* About 100 Russian immigrants purportedly paid $3,000 to $5,000 each to a woman who runs a homeless shelter who allegedly certified them as homeless, although they weren’t. The designation allowed them to move up on a waiting list for housing vouchers for the Section 8 rent-subsidy program. About 60,000 people are on that list--a 15-year wait, the CHA says.

* The workers’ compensation program was so inefficient that from 1991 to 1994, annual average costs rose from $1.75 million to $5.5 million; more than half the claims submitted came from workers who had put in multiple claims, and no investigation was done to determine why they had recurring injuries.

* Nearly $59,000 in laundry collections were embezzled from Lake Parc Place, a highly touted mixed-income development, in a 2 1/2-year period ending in 1994. The audit said the property manager was responsible.

* Thousands of dollars in phone calls were made by contract security guards at public housing to locales including Hong Kong, the Dominican Republic and Nigeria. Other calls were made to sex hot lines.

* In 1992 and 1993, CHA security guards received more than $300,000 in overtime, even though they weren’t eligible to earn it. Others weren’t paid overtime they earned.