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On the Matter of Mister Beam, Part Two
September 25, 2004: As Part One drew to a close, it was early 2003 and George Beam was gearing up for his day in court. Attempting to obtain redress for a botched home rehab, via a lawsuit against the city of Mentor, Ohio. George's home rehab had commenced in the Summer of 2000, with financial assistance provided by Community Development Block Grant (CDBG) funds. CDBG is a program of the U.S. Department of Housing and Urban Development (HUD). CDBG funds are given in one block payment to local governments, to be used in a variety of proscribed ways. The funds are dispensed and administered locally. The contractor the city of Mentor had approved and hired with CDBG funds to repair George Beam's home had botched the job badly. After spending 3 years in tangled disputes with contractors, assorted Mentor officials and Ohio HUD, and after living for the same amount of time in the debris and destruction of the failed home rehab, George was hyped for justice.

Though Ohio HUD had withdrawn from the field leaving George without government agency back-up, he hoped his attorney would prove a veritable Perry Mason. The outrageous details of his situation would be understood. Confessions would be wrung from the lips of the negligent. Official acknowledgments of error would be made. In other words, George had the usual hopes of naive individuals who launch lawsuits against local power structures.

A year later George arrived on the far shore. As mentioned in Part One, George Beam's attorney was Republican State Representative Jamie Callender. At that time, Callender represented the area of Lake County where George lives and had been recommended by a city council member George trusted. During the period George Beam's case was working its way through court, Representative Callender had a lot on his plate besides George. When George called his office or wanted copies of legal papers Callender was often busy doing the people's work. Associates of Callender handled some aspects of George Beam's case, at a somewhat cheaper hourly rate. George began to feel like he was being represented by Perry Masonite.

When the city of Mentor filed a motion for dismissal claiming "governmental immunity" George was surprised. He hadn't realized such a claim could be made. Governmental immunity, in certain instances, shields local governments from liability. Its origins lie in English common law, from the days when Kings set prerogatives. Among modern legal justifications for governmental immunity, is protection of executive, representational local policy decisions from second guessing by courts. Not all defenses based on governmental immunity succeed. Various factors, in various localities, have disqualified it. Malice on the part of a local official responsible for someone's injury is one example. The argument has even been made that when negligent actions of local governments take place within the context of federal programs and are funded by federal dollars, local governments cease to become local-- and are instead, acting as agents of the federal government.

Mentor made several pre-trial motions to have George Beam's suit thrown out based on a claim of governmental immunity. The judge denied them. The judge also proposed a limit on the amount George Beam could receive in damages from Mentor's approved contractor, who was also named in George's suit. The amount was 15 thousand dollars. George's attorneys advised him it was a reasonable arrangement and even generously waived the remaining part of their fee. They'd already collected thousands from George, who'd paid them with money from a home loan.

In the late Autumn of 2003 at the actual trial, the same judge ruled in Mentor's favor regarding governmental immunity as a defense. Though the contractor had to pay up the 15 thousand. George appealed the ruling as it related to Mentor, with legal assistance from Jamie Callender's co-council. In January 2004 the appeal was denied. Back on February 6th of 2003, in its coverage of George's situation, the Cleveland Plain Dealer had referenced a report an outside contractor had given the city of Mentor, estimating "that proper repair of Beam's home would now cost about $64,000 dollars." George Beam's home is still in the same condition described in that report. With a few exceptions: under threat of prosecution by the City of Mentor, George hauled away the 6 dumpster loads of rehab debris and filled in the front yard trench left behind by Mentor's approved contractor.

George Beam was naive. Maybe stubborn. Perhaps he even hoped too hard for a large settlement and should have cut his losses earlier in the game. But it wasn't just cash that kept George pushing-- he really wanted justice. Home is where the heart is, and the botched rehab of his house and the problems correcting it via the political system, were eroding his belief in that very same system. His disillusionment was compounded when he knocked on official door after door seeking help and got a big ho hum in response. Cynics may sneer and say so what. Or feel some glee over another sucker having to wake up and smell the coffee. But even those who care nothing about George's loss of belief, might acknowledge that lots of Georges would cost taxpayers plenty.

Ohio has a history of HUD funded, home repair fiascos. The city of Cleveland is 30 minutes west of Mentor, on Interstate 90. In April of this year, the Cleveland Plain Dealer ran a series of articles detailing extensive fraud and mismanagement in Cleveland's Repair-a-Home (RAH) and Senior Housing Assistance programs. To the tune of $21.2 million dollars. Both RAH and Senior Housing Assistance are low interest, home repair loan programs subsidized by HUD. Both programs are meant to benefit low and moderate income homeowners. While under the apparently out-to-lunch oversight of the regional HUD office and the Cleveland Department of Community Development, crooked contractors working in concert with some city building inspectors, ripped off scores of homeowners. Some were hustled into taking out loans for repairs that weren't needed, others received rehabs that made the George Beam job look like a dream makeover. When homeowners complained to various city agencies, including the Cleveland Office of Community Development, their complaints were allegedly ignored. Perhaps officials at Community Development were too busy doing the peoples' work elsewhere.

During the same period that the RAH and Senior Housing Assistance programs were developing cracks, the 33 million dollar, tax exempt bond financed redevelopment of Cleveland's West Tech High School was going great guns: transforming into a luxury apartment complex called West Tech Lofts. The March, 2004 issue of "Properties" quotes a Cleveland company that manages real estate development funds: "...the City's community development office did a tremendous job keeping this project on track and keeping all the lenders and stakeholders at the table. The lenders and various stake holders met at least weekly to assure the project moved forward."

Imagine how homeowners' problems with the RAH and Senior Housing Assistance home repair program could have been nipped in the bud if officials at the Cleveland Department of Community Development had been meeting weekly with those stakeholders! Maybe the city approved contractors who hustled loans and ruined homes could even have been vetted more carefully.

Ohio HUD, according to its website, "strives to provide excellent customer service". Yet in its coverage of the Cleveland home rehab scams, the Plain Dealer reported that "...HUD sometimes didn't even require the city to order the contractors to redo their projects"." And in an April 13th editorial, the Plain Dealer characterized HUD's "profile in courage in these matters" as being "below sea level".

In the late 90's several thousand low and moderate income homeowners in Southern Ohio, plus the nation's taxpayers, were ripped off mightily by home repair con artists working a HUD Title I, FHA insured, home loan program. In June of 2000, HUD's Midwest Office of Audit in Chicago, audited the State of Ohio's Community Housing Improvement Program and found oversight of sub- recipients decidedly lacking. Working off cases in Fairfield County, the audit concluded that Ohio HUD "did not ensure that units met its standards after housing assistance" and "the state's controls over its sub-recipients contracting processes need to be improved" and that "the state lacked adequate controls to ensure corrective action was taken".

Home repair programs haven't been Ohio HUD's only weakness. Public Housing has had its problems. In March of 2000, audits by HUD in Washington DC, detailed financial abuses in Cleveland's housing agency, the Cuyahoga Metropolitan Housing Authority (CMHA). A simultaneous audit, with similar results, was issued about San Francisco's Housing Authority. Its director, Ronnie Davis, was indicted the following Spring by an Ohio federal grand jury. Prior to moving to San Francisco and becoming that city's Housing Authority Director, Davis had worked in Cleveland, as chief operating officer at the CMHA. His former boss at the CMHA, executive director Claire R. Freeman-McCown, was also indicted. The charges against Davis and Freeman-McCown involved diverting funds meant for housing the poor, into feathering their own nests.

Problems with oversight of Ohio HUD programs don't always lie solely on the local level. In 1998, personnel at HUD's centralized Enforcement Center in Washington, whose mission was to pursue civil and regulatory actions against bad landlords, be they public housing authorities or private, multi-family property owners, wanted to file a $15 million civil fraud case against Associated Estates Realty Corporation in Cleveland. Several of Associated's HUD insured, Section 8 subsidized properties had racked up more than 8,600 city health and safety violations. HUD's Office of the Inspector General (OIG) and the U.S. Attorney's Office were interested in the idea of filing suit, but requested more info. Before they could dig into the matter, HUD officials from outside the Enforcement Center disciplined Associated Estates by paying the company $1.78 million in retroactive rent. On the stern condition that Associated sell its 2 worst buildings to new owners. The settlement also released Associated Estates from any civil or administrative claims relating to its HUD insured, subsidized properties. Andrew Cuomo, who was then HUD Secretary, was quoted in March of 1999 by the Plain Dealer: "This settlement agreement sends a strong message to owners and managers of housing subsidized by HUD. If you don't provide safe and decent housing to families in need, your days of getting money from this department are over."

Whenever scandals break, Ohio HUD, like every regional HUD that gets caught with their pants down, swears problems have been corrected. Loopholes have been closed, new layers of oversight have been added, and miscreants have been fired, indicted or knocked off the taxpayer teat. Or at least, temporarily suspended. Judging by the recent HUD home repair mess in Cleveland, my guess is that something is still rotten in the state of Buckeye.

And George Beam? As a lark he emailed an account of his adventures in HUD home repair to President George Bush and presidential candidate John Kerry. Both have been campaigning heavily in Ohio trying to round up votes from the common man. George Beam also invited Bush and Kerry to drop by and see the damage to his home. Then stay for dinner. Though George made it clear that due to costs incurred over the past 4 years, he'd only be serving wieners and beans. Perhaps Bush and Kerry are secret vegans, because all George Beam got back were automatic email responses thanking him for his support. An automatic response also arrived from Bill Clinton. Thanking him for supporting Kerry. Due to the no-shows George had a lot of leftover baked beans. He offered them to the raccoons who come around the back of his house. But the raccoons turned up their noses. "Maybe because they were Bush baked beans" said George.

George also says the problem doesn't lie with political parties, but with people. I tend to agree. But I'd add that sometimes the problem also lies with government agencies. The kind that are bloated and pervasive and become a corrupting influence on people in both parties.

Carola Von Hoffmannstahl-Solomonoff

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Copyright (c) 2004 by Carola Von Hoffmannstahl-Solomonoff. This material may be freely distributed subject to the terms and conditions set forth in the Open Publication License. This license relieves the author of any liability or implication of warranty, grants others permission to use the Content in whole or in part, and insures that the original author will be properly credited when Content is used. It also grants others permission to modify and redistribute the Content if they clearly mark what changes have been made, when they were made, and who made them. Finally, the license insures that if someone else bases a work on this Content, that the resultant work will be made available under the Open Publication License as well.


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