Tuesday, May 21, 2013
AUGUSTA — Allegations that the Maine State Housing Authority has misspent money and invested in high-priced projects fueled arguments Tuesday over a plan to reform the agency.
Under a bill sponsored by the Senate majority leader, the director of the quasi-state agency would no longer be appointed to four-year terms, and could be fired by the governor-appointed Board of Commissioners at any time.
Speakers at a public hearing on the bill clashed over whether the change would fix problems with the housing authority, or just make matters worse.
"With each passing day, it appears the scandal plaguing the Maine State Housing Authority grows in scope and severity," said Les Gibson of Sabattus, a supporter of the bill. "The current director is accountable to no one."
Carol Kontos, a former housing authority commissioner who opposes the change, said the politically charged accusations show why the agency needs its independence.
"After just four months, (new Republican members of the board) have determined that they should have the authority to hire and fire the executive director. ... They have decided they know best," said Kontos, a former Democratic legislator. "There is no evidence of wrongdoing, and I do not believe any will be found."
L.D. 1778 is a response to the accusations that have swirled around the $1.6 billion-a-year housing authority for months.
Republican state Treasurer Bruce Poliquin and other commissioners appointed by Republican Gov. Paul LePage have harshly criticized Executive Director Dale McCormick, a Democratic appointee from the Baldacci administration.
Critics initially focused on the agency's investments in affordable housing units costing well over $200,000 each. More recently, the criticism has focused on money spent on massage services, at hotels and for donations to special interest groups.
McCormick and others in the housing authority have responded that the accusations of mismanagement are purely political and false.
The Legislature's Government Oversight Committee agreed last week to take up the spending questions as quickly as possible.
Senate Majority Leader Jonathan Courtney, R-Springvale, sponsored L.D. 1778 to make the housing authority's director more accountable to the Board of Commissioners.
"This issue has to be dealt with as soon as possible," he said Tuesday during the hearing held by the Legislature's Labor, Commerce, Research and Economic Development Committee.
Michael Doyle of Falmouth was one of several citizens who said the agency, and McCormick, need to be held accountable.
"This thing is an organization out of control, and it's out of control because nobody can fire someone who needs to be fired," Doyle said.
Carol Weston, state director of Americans for Prosperity, said the housing authority is Maine's only quasi-governmental agency that gives its director a term in office.
"Only one has no direct link of accountability to the people paying the bill, and that is the Maine State Housing Authority," said Weston, a former Republican state senator.
Opponents of the change argued that the agency has been successful in attracting private investment and developing housing because it is known for stable, consistent leadership.
Rick McCarthy, a lobbyist for the Maine Affordable Housing Coalition and the Maine Real Estate Managers Association, said the director's four-year term insulates the agency from political swings in state government.
"We ... think you should retain the four-year term, which is good for the organization," McCarthy said.
Officials in the housing authority have been fending off the accusations in recent months, and did again at Tuesday's hearing.
"We are confident that when an independent review is completed, it will be clear that none of our expenditures were illegal, unethical or inappropriate," said Peter Merrill, the authority's director of planning and communication.
Merrill, however, did not testify against the bill. He offered some amendments, including one to give the Board of Commissioners the right to hire, as well as fire, future executive directors.
But, Merrill said, the Legislature shouldn't eliminate the four-year terms until after McCormick's term ends in two years. "Taking people at their word that this is not about the current director, then it makes sense to have these changes take place at the end of the current term," he said.
Firing McCormick before her term is up also would raise concerns about a breach of contract, he said.
Courtney, the bill's sponsor, said he is willing to work with the committee to shape the final bill. But increased accountability is needed sooner than later, and he's not inclined to wait until 2014, Courtney said.
"I think this needs to go forward," he said.
MaineToday Media State House Writer John Richardson can be contacted at 620-7016 or at: email@example.com