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The watchdog of the Department of Housing and Urban Development is itself facing the harsh light of government scrutiny. For years, the Office of Inspector General for HUD has been a stern judge of the Cabinet-level agency. Its investigations and audits have caught criminals skimming money from the department’s coffers, found accounting problems, and criticized the agency’s management and internal reforms. Now the inspector general is facing similar criticism from Congress’ investigatory arm, the General Accounting Office, over its seven-year effort to fight crime and drugs in public and assisted housing. A report issued last week questions whether Congress should continue to allow the inspector general’s office to run the program, Operation Safe Home. Among other things, the GAO asserts that the program could not easily provide detailed information on how its money was spent and that data on arrests and convictions are “unreliable.” The GAO goes on to say that the program might have overreported as many as 600 arrests, and it questions whether the program interfered with the inspector general’s primary duty of auditing HUD’s books. “We believe that the Congress should consider whether the long-term involvement of the [inspector general's office] in Operation Safe Home is worth the actual or perceived impairment of the [IG's] independence in performing audits and investigations of HUD’s programs to reduce violent and drug-related crime in public and assisted housing,” the report reads. The IG’s office is criticizing the July 2 report, disputing both the methodology of the investigation and its conclusions. “I don’t think the GAO report was a fair report,” says Robert Groves, assistant inspector general for investigations. “I truly believe it was very unmethodical and unobjectively reported.” The report comes at a particularly heated time in the housing community. The Bush administration wants to end the Public Housing Drug Elimination Program, a block grant that allows local housing agencies to design their own anti-drug programs. Yet the administration has agreed to keep Operation Safe Home. Those decisions are drawing fire. And critics of Operation Safe Home are hoping the GAO report will encourage Congress to heavily scrutinize the program and, potentially, move it out from under the IG’s control. “We have long been raising with Congress the issue of the propriety of an audit entity basically being involved in part of a police operation,” says Gordon Cavanaugh, a partner at Washington, D.C.’s Reno & Cavanaugh who has criticized the program on behalf of one of its major clients, the Council of Large Public Housing Authorities. “There is nothing analogous to that in the normal audit world.” NO PLACE LIKE HOME Nearly every agency in the federal government has an inspector general’s office charged with auditing the books and ferreting out fraud, waste, and abuse. Many times that takes the inspector general into criminal investigations. But Operation Safe Home is unique. It was rolled out in early 1994. Then-Vice President Al Gore hailed the “absolutely extraordinary” cooperation between HUD’s inspector general and various law enforcement bodies. The program allowed the inspector general to go after traditional targets — white collar criminals skimming public funds — as well as newer ones, drug dealers and gang members operating out of public housing. According to the inspector general’s office, the effort has resulted in 25,000 arrests and 500 convictions since 1994. “HUD has a huge investment in public and assisted housing, and those properties are deteriorating because in many of them there is a huge crime problem,” says Groves. “We have a vested interest in helping those residents reduce the level of crime.” Last week, the IG’s regular weekly report listed these successful Operation Safe Home activities: A housing director was sentenced to a halfway house for channeling money into a gym in which he had an ownership stake; a federal jury found a Richmond, Va., woman guilty of murder and various drug charges; and five Richmond men pleaded guilty to distribution and conspiracy to distribute heroin and crack. All were caught thanks to task forces that included the inspector general’s office and numerous other law enforcement agencies, including the Drug Enforcement Administration, the Federal Bureau of Investigation, and the New York City and Richmond police departments. Many of the housing authorities that have worked with the program are pleased. “It certainly was one of the best things that this housing authority could have been involved in,” says Michael Murphy, deputy director of administration for the Worcester Housing Authority in Massachusetts. But not everyone lavishes the same level of praise on the effort. Some public housing associations have bristled at the program, saying the task force overlaps with other crime-fighting efforts. Rep. Barney Frank, D-Mass., requested the report last year, questioning the appropriateness of the inspector general running the program. Frank has not yet commented on the report. A HOUSE DIVIDED As with most things that involve HUD and the inspector general, there is always politics in the background. For years, Clinton HUD Secretary Andrew Cuomo and Inspector General Susan Gaffney battled each other. A rumor surfaced several years ago that Cuomo wanted to take Operation Safe Home away from the Inspector General. Although both Gaffney and Cuomo are gone, Operation Safe Home is now enmeshed in the political battle over HUD funding. Funding for Operation Safe Home comes out of the budget for the Public Housing Drug Elimination Program. In last year’s budget, Operation Safe Home received $20 million of the $310 million granted to the program. But now the Drug Elimination Program is slated to be scrapped, while Operation Safe Home remains. “This is money that is supposed to go to public housing authorities to go to local efforts,” says Sharon Wilson Geno, an associate at Reno & Cavanaugh. “The irony is that even though the Drug Elimination Program is being terminated there is still an earmarking to fund this program.” But such criticisms have yet to gain any traction. And while public housing authorities are worried about the impact of losing their local drug elimination programs, they haven’t completely turned against Operation Safe Home. “We consider Operation Safe Home a component of the drug elimination program,” says Melvin Braziel, president of the San Antonio Housing Authority in Texas. Braziel says the program has been working in his area for 3-1/2 years and has resulted in four or five major busts. “They have broken what I considered to be an infestation of drug dealers in public housing.” The inspector general’s office is promising to work to solve any problems raised by Congress. “It’s always a concern when criticism is leveled in a formal report by the GAO,” says Groves. “It does cause us concern. But I would welcome any interest from any congressman or senator. I think we can satisfy them.”

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