Lawmakers want criminal investigation into Affordable Housing

March 24, 2006

By Pat Litowitz
New Castle News

Two lawmakers are calling for additional investigations of a failed nonprofit organization and Lawrence County’s housing authority.

The authority’s chairman, Robert Heath, said he is supporting the efforts of state Rep. Frank LaGrotta and U.S. Rep. Melissa Hart.

In a letter to the state Attorney General’s office dated yesterday, LaGrotta asked for an immediate criminal investigation of Affordable Housing of Lawrence County and the housing authority. He wants the state police and county District Attorney John Bongivengo to spearhead the probe.

While the local legislator has been a longtime critic of the authority, Hart entered the controversy for the first time. In a statement released yesterday, the 4th District congresswoman said the U.S. Department of Housing and Urban Development must continue its examination of Affordable Housing.

On Wednesday, the nonprofit housing group declared itself insolvent and notified First Commonwealth Bank of its intention to default on two mortgages, which total approximately $290,000. The action also cripples the housing authority’s ability to recoup the $200,500 it furnished to Affordable Housing in the form of a loan.

“The unavoidable conclusion ... is that a major conspiracy involving the misuse of public funds may have occurred in Lawrence County,” LaGrotta wrote to Attorney General Thomas W. Corbett Jr.

Although the funds involved are federal dollars, LaGrotta said that because Affordable Housing was licensed in the state as a corporation, the matter demands state involvement.

On the federal level, Hart said she “will press HUD to continue its investigation into the practices of everyone who managed Affordable Housing until taxpayers have all the answers they deserve.

“If there was criminal activity involved, those responsible should be held accountable. It is my hope that the investigation can ultimately restore some of the trust that the actions of Affordable Housing may have eroded in the community.”

Earlier this month, HUD’s Pittsburgh office released the results of a limited financial review of housing authority operations.

In the first finding, HUD said the authority made ineligible transfers of Section 8 reserves totaling $200,500 to Affordable Housing. A violation involving the transfer of coin laundry equipment to Affordable Housing was the basis of the second finding.

HUD gave the housing authority until April 10 to get back its money.

“I, myself, have no problem with a criminal investigation of the housing authority,” Heath said. “I don’t think the housing authority did anything wrong.”

Attempts to reach housing authority executive director Robert Evanick for comment were unsuccessful.