Mayor Harold Washington vigorously denied responsibility for pervasive mismanagement at the Chicago Housing Authority or for its financial crisis, in a press conference Wednesday after city council approval of a CHA bailout.
”I can`t accept any responsibility for perceived mismanagement at the CHA,” he told reporters. ”Why should I feel responsible? I didn`t create that mess.”
Washington blamed federal housing officials for failing to give the CHA enough money. He blamed his Chicago City Council opponents for holding up his appointments to the CHA board. And he blamed former CHA executive director Zirl Smith.
But earlier, at the council meeting, opposition aldermen laid the responsibility at the mayor`s door, noting he gave free rein to former CHA chairman Renault Robinson, Washington`s friend and former campaign manager, in running the authority for nearly four years.
”Renault Robinson, he was wheeling and dealing; our mayor, he was silent,” said Ald. Michael Sheahan (19th). ”He didn`t say one word about Renault Robinson.”
Nevertheless, the council approved a $25 million loan and $5.6 million grant to bail out the CHA.
Robinson, appointed to the CHA board in 1979 by Mayor Jane Byrne, was named CHA chairman by Washington in August, 1983. Dogged by controversy throughout his tenure, Robinson resigned under fire Jan. 16, after the CHA lost $7 million in federal funds because of a missed deadline.
The CHA`s management and financial problems, which pre-date Washington`s election as mayor in 1983, continued during his first term and, in many areas, grew worse.
A just-completed review by the U.S. Department of Housing and Urban Development (HUD) found ”gross mismanagement” throughout the authority, and a report recently issued by the CHA indicated that the agency is in the midst of the worst financial distress in its 50-year history.
The financial report, issued 16 days after Washington`s re-election, indicated that the agency`s fiscal problems were due mainly to a spending binge last year during which the CHA`s reserves were depleted by $43 million. Now, the financial outlook is so bleak that the CHA has asked HUD for nearly $68 million in emergency funding to go along with the city bailout.
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On Wednesday, the council, dominated by the mayor`s allies, voted 30-16 to approve the $25 million loan and 30-15 to approve the $5.6 million grant.
Afterward, Washington, who has consistently side-stepped blame for the CHA`s problems, said he will soon be nominating new members to the agency`s board to replace Robinson and to fill three expired terms.
Washington said he wished he could have taken the action sooner. But during his first three years as mayor, he said, the anti-administration majority bloc in the council blocked his appointments.
”I`d like to have my own board,” he said. ”It`s simply a question of having your own people in.
”We inherited the board we got. We were unable to change the membership of the board. We were stuck with what we had, good or bad. We were satisfied that Mr. Robinson was the best person available on that board.”
But aides to the mayor acknowledged that the council opposition blocked only one appointment, John P. Ahern, an attorney and real estate consultant, who was appointed by Washington on Sept. 6, 1984. Ahern asked that his name be removed from consideration on March 25, 1986, for personal reasons, a Washington aide said.
During the mayor`s first term, those on the seven-member CHA board who took an active role were Robinson, Leon Finney Jr. and Earl Neal, all supporters of the mayor. The other members contended that they were frozen out of major decisions by Robinson.
For his first five months as chairman, Robinson also tried to act as de facto executive director. But after he made a series of questionable and controversial decisions, including the firing of elevator repair workers and the hiring of his brother-in-law and friends, control over day-to-day affairs were taken out of his hands.
That control eventually was given to Smith, a housing professional who was hired in April, 1984.
But by the end of 1985, Robinson had successfully regained much of that control at the expense of Smith, including power over the financial and legal departments and responsibility for communicating with federal housing officials.
CHA sources have indicated that the HUD management review, to be made public soon, is highly critical of Smith`s activities as executive director.
Washington, who approved Smith`s appointment, referred Wednesday to the review, and said of Smith, ”He resigned. I didn`t ask him to resign.”
Sources close to Smith have said he resigned because Washington refused to back him in his struggle with Robinson.
Washington argued Wednesday that the federal government had failed to give the housing authority enough money, and he contended that the problems are far from unique to the CHA.
”The Chicago Housing Authority`s in the same position as just about every housing authority in the country,” he said.
Nonetheless, few if any other authorities are facing as severe a financial crisis as the CHA is. And local HUD officials argue that the CHA has gotten its ”fair share” of federal money.
The city loan approved Wednesday is to be used to pay back debts and keep in operation the court-ordered scattered-site housing program, which has long been controversial, particularly in middle-class and predominantly white city wards. But the loan won`t be made until Washington determines the collateral that the CHA must post and until HUD approves the arrangement.
Even with collateral, some aldermen wondered whether the CHA would pay back the loan. ”I don`t know if any of you believe that they`re going to be able to repay what we`re about to give them. We could let them go belly up. Maybe we should,” said Ald. Richard Mell (33d), who nonetheless voted for the bailout.
After the vote, Washington said he is ”reasonably” sure that the loan will be repaid. But he added, ”If we get the cooperation of HUD, it`ll be no problem at all. I can`t imagine HUD not cooperating with this venture.”
Except for $200,000 for a janitorial-training program for residents, the grant won`t be made unless the CHA gets a matching amount from HUD for a program to renovate heavily damaged and vandalized public housing apartments. Federal housing officials have promised to give the agency some money, but have indicated that it could be a month or more before such funding comes through.
Because of the agency`s money problems, CHA officials have reduced spending for security, maintenance and elevator repairs.
In addition, more than 100 scattered-site housing units in 21 buildings now under rehabilitation throughout the city will be boarded up Friday because the CHA does not have money to keep the work going.
In the face of that temporary shutdown, Alexander Polikoff, the public interest lawyer responsible for the creation of the scattered-site public housing program, said Wednesday that he will seek to have the program put into receivership.