Spit-Shining a Scandal


Three days before he was swept out of D.C., Andrew Cuomo swept into his home state to try to wash away the stain of the HUD 203(k) scandal that has left 450 brownstones in default and teetering toward foreclosure.

But the impression left by Charlie King, his official representative for New York and New Jersey, won’t ease any fears. King, who replaced Bill de Blasio as Cuomo’s representative when de Blasio left in 1999 to run Hillary Rodham Clinton’s Senate campaign, was HUD’s star speaker at a meeting Wednesday night in Harlem for the buildings’ tenants, many of whom are trying to live without heat or hot water in the dead of winter.

Cuomo himself had spoken that morning at a meeting downtown to unveil what officials called a plan to rescue the brownstones from the brink.

The Harlem meeting was more down-to-earth. It was called by activists to determine the scope of the human misery—like no heat—caused by the paperwork scam. City Councilman Bill Perkins, Borough President C. Virginia Fields, and other pols showed up to try to reassure the residents.

“No heat or hot water. Call, call, call, never getting anything done.”

Cuomo, however, wasn’t around. He scooted back to D.C. after assuring locals that morning that a redevelopment deal he had just signed with Reverend Calvin Butts’s development group and other nonprofits would be binding on his successor, Mel Martinez.

Cuomo wanted to leave the locals with a warm feeling so as not to damage his future political plans. But, like a blast of cold air, King admitted to the raucous crowd of about 200 people (organizers said they had expected 30 or so) that he didn’t really know much about the details of the scam. Then he offered a “simple explanation,” in which he picked the other people sitting at the speakers’ table, including hardworking community activists, to portray the scamsters who have been charged in federal and state court. “Now take Jim here, and imagine him as a really unscrupulous guy . . . ,” King began. Gee, thanks for the mention.

The lighthearted attempt to explain matters didn’t score points with the crowd. And it didn’t explain the scam, either.

The chilly reception was heartfelt because many have literally been left out in the cold; several residents have learned more about the process in the past few months than King appears to know.

“I feel like a regular Erin Brockovich,” says “Tracy,” one tenant who’s been fighting for a couple of months for basic services in her building. (Because of the ongoing battle, she requests anonymity.) Her building in Harlem is one of the 203(k) properties flipped by the schemers into the hands of Family Preservation Center, a Long Island nonprofit whose officials have been charged with filing false documents.

Tracy says she was thrilled to find a place last fall for herself and a roommate, even if it was a one-bedroom railroad flat for $1000 a month. But just a few weeks after they moved in, the boiler broke.

“No heat or hot water,” she says. “Call, call, call, never getting anything done.” Wading through the bureaucracy, she finally gathered up enough information to take her landlord to court and wound up with an agreement that they would have a rent-free December.

“To two starving actors,” she recalls, “this was pretty exciting.”

When they returned to Harlem after a Christmas vacation, some of the utilities were back on, but Tracy discovered that a new management company had taken over. Or had it? It was difficult to tell who was the real owner of the building. One man, she recalls, “used fear tactics on us. We’re a building of all women. I guess he thought he could bully us. He’s a smooth talker, a typical slumlord.”

She eventually wound up speaking with an official of FPC, who seemed to be a nice guy. But just a few days later, on January 13, Tracy discovered after reading the Voice that FPC, the owner of the building, was accused of being involved in the alleged chicanery.

On January 15, she came home to discover that the building’s front door was off its hinges. Pinned to the door was a letter from yet another management company saying it was running the building.

That’s when Tracy herself became unhinged. “I can’t believe the audacity of their putting this letter on our door,” she says.

Tracy’s luckier than many of the other residents at the Thursday night meeting. They told story after story of neglect. Housing activists fight daily battles for people who are less able than Tracy to fight for their rights. The HUD scandal didn’t create the problem of bad landlords, but it made a bad situation worse.

Part of the reason for this misery is a central angle of the scam perpetrated against HUD. The nonprofits, according to prosecutors, were assured that they wouldn’t have to be responsible for maintaining the buildings they ostensibly owned. A management company was supposed to do it. But the management company belonged to one of the other people charged in the case, Frank Boccagna, according to a lawyer for another of the nonprofits. And Boccagna was one of the secret investors backing the deals, according to charges filed against him and others by Manhattan district attorney Robert Morgenthau.

True rehab was started on many of the 450 buildings, says a source close to the investigation, but was not completed on any of them. (See “HUD: The Horror Movie, January 16; “Seduced and Abandoned,” January 23.)

The bad news is worse: As many as 600 buildings in the city may wind up in default just from the 203(k) scam.

See Also:

Let Us Prey

One Church in the HUD Rehab-Loan Scandal Says It Was a Lamb Led to the Slaughter

by Ward Harkavy