News Release: Federal Lawsuit Filed In Houston Housing Scandal

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A major lawsuit has been filed in the widening Houston low-income housing scandal and it could spell trouble for the Department of Housing and Urban Development.

Houston-based investigative media consulting firm Dolcefino Consulting accuses the Department of Housing and Urban Development of brazen violations of the U.S. Freedom of Information Act and what looks like a coverup of wrongful spending of $67 million in taxpayer money in an eastside land deal.

For the last year and a half, Dolcefino Consulting has been investigating the two planned Houston Housing Authority low-income housing developments in the East End—the EaDo 800 project set to be developed by NRP and the Standard Jensen project set to be developed by Ojala Partners, LP.  HUD eventually approved $67 million just for the land.

We learned the Houston Housing Authority was trying to sneak through approval to spend $13 million for land that was contaminated by ash from the old Velasco Incinerator. HUD rules clearly state that low-income housing cannot be built on or near land that’s environmentally contaminated, yet HUD approved the funding.

The Standard Jensen project on the north side of Buffalo Bayou is set to be built right underneath the new section of I-45 once the freeway is completed and the project violates federal noise requirement rules for low-income housing. Once again, HUD approved the project after the former Houston housing department director signed a waiver.

The HHA had been secretive about these projects from the beginning, including illegal public meetings. Dolcefino Consulting turned to HUD seeking transparency in the form of several Freedom of Information Act requests.

The requests sought, in part, communications between the Housing Authority and two key HUD officials who had to sign off on the questionable spending—Lorraine Walls, the Director of Houston’s HUD Field Office, and Jane Hornstein, the Director of HUD’s Special Application Center in Chicago.

“These are critical records,” said Dolcefino Consulting Attorney Jeff Diamant. “We know they exist, and we also know they clearly don’t want us to see them.”

This lawsuit comes just weeks after the former head of Houston’s Housing and Community Development Department Tom McCasland leveled damning allegations of possible public corruption against Houston Mayor Sylvester Turner.

McCasland accused Turner of bankrolling a specific low-income housing developer to benefit his former law partner Barry Barnes, and of running an administration that drives out dedicated public servants with integrity and creates a “breeding culture for corruption.”

It was McCasland who issued the environmental contamination waiver on EaDo 800 and the noise-level waiver on the Ojala project.

“Some of these documents have been withheld from us for a year and a half, and we know they have intentionally hidden some other documents,” said Wayne Dolcefino, President of Dolcefino Consulting. “We want a federal judge to hold these bureaucrats responsible because Houstonians always deserve the truth.”

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