Jerome Van Gorkom, who was appointed managing director of the financially troubled Chicago Housing Authority 4 1/2 months ago to stave off a federal takeover, abruptly submitted his resignation this week, CHA and federal housing officials said Wednesday.
The retired business executive, who as chairman of the Chicago School Finance Authority helped bail out Chicago`s debt-ridden public-school system eight years ago, was expected to work similar magic at the CHA.
But in the resignation letter he submitted to Rev. B. Herbert Martin, the CHA board chairman, Van Gorkom cited ”irreconcilable differences” with the board as his reason for resigning, according to CHA sources who have seen a copy of the letter. The resignation is effective April 1, the sources said.
Van Gorkom declined to comment on his resignation. Martin, according to CHA officials, was out of the country. But Mayor Eugene Sawyer, CHA board member Patricia Crowley and James Baugh, the acting assistant HUD secretary for public housing who last year led HUD`s attempt to take over the CHA, confirmed that Van Gorkom had resigned.
Sawyer said he learned of Van Gorkom`s resignation Wednesday afternoon.
Crowley said she did not know why Van Gorkom, who had agreed to be CHA managing director for up to two years, chose to resign at this time.
But sources who have worked closely with Van Gorkom at the CHA said he has become frustrated with some board members` refusal to deal with the agency`s mounting debts.
Though the CHA owes $36 million to suppliers, contractors, local utilities and HUD, some board members have been pressuring Van Gorkom to spend what little money the authority has on questionable programs designed to appease CHA residents, some sources said.
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Others said Van Gorkom also has become frustrated because HUD has not provided funding so the CHA can get out of debt and get on with the job of upgrading its housing and providing a decent level of services to residents.
”The CHA`s financial plight is worse than it`s ever been, and yet he hasn`t been able to get five cents from HUD,” said one source close to Van Gorkom. ”What you have here is a multimillionaire, Republican heavyweight who can`t get to first base with his (Republican) administration.
”In addition, he`s frustrated because he finds himself surrrounded by underlings at the CHA who have little talent and are more concerned about protecting the bureaucracy they`ve created than with improving the agency,”
the source added.
Observers in the Chicago regional HUD office added that the ”final straw” for Van Gorkom was the decision last week by Gertrude Jordan, the regional HUD administrator, to release $3 million for emergency repairs at CHA developments. Jordan agreed to provide the funding after two days of around-the-clock demonstrations outside of her offices by CHA residents, led by Martin.
”He (Van Gorkom) felt that Jordan had undermined him,” said one local HUD source. ”Not only had she bypassed him in granting the funding, but she gave the board the impression that it could spend money without first getting the CHA`s debts cleared up.
”Van Gorkom just doesn`t want to spend any money-award any contracts or buy any supplies-until he gets the (CHA`s) finances straigthened out. But running the CHA is not like running a large corporation.”
Van Gorkom, a fiscal conservative, was appointed to the $84,000-a-year CHA post by the late Mayor Harold Washington and the CHA board on Sept. 10, in the height of the worst financial crisis in the CHA`s 50-year history.
His appointment was viewed by HUD officials as proof that the city and CHA finally were serious about ending years of mismanagement, political meddling and financial irregularities at the authority.
Within days of his appointment, HUD officials backed off of their attempt to take over the agency and instead agreed to a compromise with the city and authority that gave HUD greater oversight but allowed the CHA to remain under local control.
As a result of Van Gorkom`s resignation, the CHA might again be in danger of a takeover. But CHA board members and local political leaders contacted Wednesday said that another takeover attempt is unlikely.
”I believe the issue is behind us,” said Odell Hicks Jr., a CHA board member who occasionally has disagreed with Van Gorkom`s policies. ”I don`t see his (Van Gorkom`s) resignation as being a problem with HUD. I`m sure HUD is comfortable with the (CHA) board.”
Mayor Sawyer said he did not believe the CHA`s relationship with HUD would be hurt.
”I have all the faith in Rev. Martin and the other members of the CHA board. I`m confident their relationship (with HUD) is fine.”
Sawyer indicated Wednesday night that he planned to reappoint Martin, whose term on the CHA board expired July 14, as chairman and said Martin would head the search team to find Van Gorkom`s replacement.
Ald. Timothy Evans (4th), who is expected to challenge Sawyer for mayor in the next election, said he also didn`t think HUD`s compromise with the CHA would be altered by Van Gorkom`s resignation.
”It remains to be seen how HUD reacts,” Evans said. ”Van Gorkom was part of the agreement that was entered into between HUD and Mayor Washington when they decided to permit CHA to remain autonomous. It may be that HUD is satisfied with the board itself now.”
In a statement issued from HUD headquarters in Washington, D.C., Baugh skirted the issue of what might happen if the CHA board appoints someone unacceptable to HUD to succeed Van Gorkom. For the present, however, he said the HUD agreement with the city and the CHA still stands.
”We regret Mr. Van Gorkom`s decision to resign . . . but we will continue to work with the Chicago Housing Authority to improve management techniques and the quality of life for its 140,000 residents,” Baugh said.
”Our memorandum of agreement with the CHA is still in place.
”We hope that the CHA board of commissioners will move quickly to hire another capable manager. We remain committed to continue working closely with both the City of Chicago and the CHA to achieve our common goal of having the housing authority operate in an efficient and effective manner.”