The Taylor Housing Authority Crimes - Chapter One: Foxes Guarding the henhouse?
Chapter 1: Foxes guarding the henhouse?
By Tom Mowdy
March 12, 2019, Taylor, TX. -- The theft of $ millions in assets and a continuing cash flow from the Taylor Housing Authority (THA) was documented by the U.S. Department of Housing and Urban Development (HUD) Office of the Inspector General (OIG) in an audit memorandum dated October 2, 2014.
The audit was prompted by an anonymous tip to the HUD OIG.
The financial theft was not a surprise. More than 18 months before the OIG audit, the THA Commissioners Board Chairman notified the Taylor City Attorney that money was missing.
The Taylor City Attorney was contacted by the THA Chairman to “look into” that missing money. That communication, to the City Attorney, was documented by the THA Board meeting minutes, dated March 12, 2013. The Taylor City Attorney knew the money was missing and crimes were in progress, at least eighteen months before the HUD Inspector General audit.
However, an open records request revealed there is no record indicating the Taylor City Attorney responded to that documented THA request for legal help. No record of the Taylor City Attorney notifying the Taylor Mayor or law enforcement, and no record of the Taylor City Attorney providing any guidance to THA concerning the missing money and assets.
The absence of any documented response to the THA Board Chairman’s notice of a crime indicates the Taylor City Attorney, a contracted City employee, simply ignored major felony crimes reported to his office. Crimes that appear to have been committed by people he knew. Crimes committed against a public corporation created by the City to ensure safe, sanitary, and affordable housing for the disabled, the elderly, the homeless, and individuals and families in financial difficulty.
By Texas law, Texas Local Government Code (TLGC) 392.040, the Taylor City Attorney had an assigned responsibility to provide legal services to THA upon request. But, after being informed there was a major financial theft at THA, the Taylor City Attorney took no action and did not inform the Mayor and did not initiate any investigation, inquiry, or audit. That failure to respond is suspect and may have prompted the anonymous tip to HUD.
Sec. 392.040. LEGAL SERVICES. (a) A municipal housing authority may request needed legal services from the municipal attorney or it may employ its own counsel and legal staff.
The “anonymous tip” to the HUD Inspector General suggests the tipster had inside knowledge and determined that THA management, the THA Commissioners Board, the Taylor Mayor, the Taylor City Attorney, and Williamson County District Attorney could not be trusted to honor their oaths and do their duty.
The tipster obviously knew the crimes could not be reported to City or County law enforcement with confidence, and without fear of retaliation. Judging from the Taylor City Attorney’s behavior and the absence of any criminal investigation, the tipster’s caution was justified.
Was there reason for mistrust? Reading the complete OIG audit report, one must ask the question: How could the THA Commissioners Board not know these things happened and that THA was missing $ millions for so many years?
The THA Commissioners Board is appointed by the Taylor Mayor. Surprisingly, the THA Board now has some of the same individuals who were on the Board when the discovered crimes were in progress. Or, maybe that is not so surprising?
One current member was “Chairman” of the Board when the crimes were being committed. Another current THA Commissioner was also a Commissioner when the crimes were committed. A third current member was Mayor when the crimes were being committed. That same former Mayor hired the Taylor City Attorney in 1998.
There are only five Board positions, so three individuals who were involved when the crimes were happening, now control the THA Commissioners Board. Their votes now control the actions and decisions about how to handle the crimes that were committed under their supervision. Again, the THA Commissioners are appointed and can be removed by the Taylor Mayor.
The OIG audit report gives substantial reason to suspect any individual having responsibility for THA during those years of crime was either extremely neglectful, grossly incompetent, or involved in a criminal conspiracy. Why are some of those same individuals, appointed as Commissioners, still overseeing and controlling THA today?
The October 2, 2014, OIG report concluded that since 2008, more than $2.5 million in assets and a continuing $700,000 annual cash flow has been illegally taken from THA, by a contracted Executive Director. The audit reported THA’s well paid contract Executive Director illegally transferred property, made blatant unauthorized expenditures, and diverted rent money from THA assets to organizations under his control. The theft amount totaled in the $ millions and was never reported as a crime by any official.
That Executive Director took control of assets and cash flow by illegally transferring $ millions of THA property assets to the control of two non-profits he organized. It appears he was receiving compensation from the non-profits in addition to receiving his THA Executive Director salary.
The OIG audit found the Executive Director did all those things for years, directly under the noses of the THA Commissioners appointed by the Taylor City Mayor. The evidence shows the crimes had been in progress for at least five years and went unreported by any official having responsibility for THA.
Why did the THA Commissioners Board not report felony crimes against THA?
Behavior of the Taylor Housing Authority Commissioners Board
THA’s missing money was reported to the Taylor City Attorney more than eighteen months prior to the OIG report. But, the City Attorney took no action. That “no action” behavior creates suspicion about his involvement, and would explain why the well informed anonymous tipster went to the HUD Inspector General instead of local authorities.
The OIG audit provided extensive, undeniable, and well documented probable cause for law enforcement to suspect multiple felony crimes were committed and continuing, in Taylor Texas. The “victim” was, and is, the Taylor Housing Authority, a public corporation created by the Taylor City Council after a petition demand by Taylor Citizens.
The harm to the community will last for many years and will manifest in worsening housing conditions for mostly elderly and disabled citizens. That population is growing as "boomers" age. The money necessary for investment and improvement has been stolen and mismanaged. It will take a long time to recover.
Incredibly, the major felony crimes were continued against THA by the act of diverted monthly rent collections for years, and nobody said anything. The crimes continued with knowledge of the Mayor, City Attorney, and the entire THA Board of Commissioners. The crimes were documented by the OIG report. Yet, the crimes were not reported, by any THA or City official, to any law enforcement authority. Why?
By all these official failures, it is reasonable to conclude that if the tipster had not informed the HUD Inspector General, Taylor citizens would not know about the crimes today.
Texas Local Government Code (TLGC) 392.041 specifically assigns responsibility for a municipal housing authority’s efficient operation to the City Mayor. The OIG report provides evidence the crimes continued for at least five years directly under the noses of the THA Board of Commissioners who are all appointed by the Mayor.
Certainly, the October 2, 2014, OIG report was evidence of inefficiency, neglect of duty, and misconduct. The Mayor had a duty to remove Commissioners for such behavior. Texas Local Government Code Section 392.041 gives the Mayor the authority to remove a municipal housing authority commissioner for those reasons:
Sec. 392.041. REMOVAL OF A COMMISSIONER. (a) The mayor may remove a commissioner of a municipal housing authority for inefficiency, neglect of duty, or misconduct in office.
However, when the HUD OIG briefed their findings, the Taylor Texas Mayor refused to attend the presentation. Although he was responsible for THA’s efficient operation, Taylor’s Mayor clearly did not want to know the results of the OIG audit, or about crimes committed in Taylor Texas against a public corporation created by the demand of Taylor citizens to prevent slum housing crime and disease problems.
At different times after the OIG presentation, the Mayor falsely claimed THA was not part of the City of Taylor. Through that twisted logic, two Mayors have somehow concluded the City had no responsibility to pursue felony fraud and financial crimes committed in Taylor. Specifically, crimes committed against a public corporation that was created by the City Council and operating under the Mayor’s supervision.
Those two Mayors never inquired to determine what effect the crimes against THA have, or would have, on the community.
Under Texas law, a municipal housing authority is created by a petition from city citizens to their city council, or the city council may determine the same need. The petition must have the signatures of 100 qualified city voters. A housing authority can only be created when there is “unsanitary or unsafe inhabited housing” in the municipality, or when there is a “shortage of safe or sanitary housing in the municipality available to persons of low income at rentals that they can afford.”
HOW MUNICIPAL HOUSING AUTHORITIES ARE CREATED
Sec. 392.011. CREATION OF A MUNICIPAL HOUSING AUTHORITY. (a) A housing authority is created in each municipality in the state.
(b) A municipal housing authority is a public body corporate and politic.
(c) A municipal housing authority may not transact business or exercise its powers until the governing body of the municipality declares by resolution that there is a need for the authority.
(d) The governing body of a municipality may determine on its own motion if there is a need for an authority.
(e) The governing body of a municipality shall determine if there is a need for an authority on the filing of a petition signed by at least 100 qualified voters of the municipality.
(f) The governing body of a municipality shall adopt a resolution declaring that there is a need for a housing authority if it finds that there is:
(1) unsanitary or unsafe inhabited housing in the municipality; or
(2) a shortage of safe or sanitary housing in the municipality available to persons of low income at rentals that they can afford.
When a city creates a municipal housing authority, it becomes a unit of municipal government. A municipal housing authority is not part of the State, County, or Federal government. It is created by the City Council and is an essential division of the city, meant to be directly responsive to the needs of the city.
Sec. 392.006. UNIT OF GOVERNMENT; GOVERNMENTAL FUNCTIONS. For all purposes, including the application of the Texas Tort Claims Act (Chapter 101, Civil Practice and Remedies Code), a housing authority is a unit of government and the functions of a housing authority are essential governmental functions and not proprietary functions.
The Taylor City Council cannot create a unit of government for Williamson County, for Texas, or for the Federal government. It can only "create" for the City of Taylor.
The Taylor Housing Authority is required, by Texas law, TLGC Sec. 392.062, to submit an annual report of it’s preceding year activities and provide recommendations to the City Council for ordinances affecting its mission. That annual report is to be filed with the Taylor City Clerk. An open records request revealed there has never been a report, as required by law, filed with the Taylor City Clerk.
Sec. 392.062. REPORTS. (a) At least once a year, each housing authority shall file a report of its activities for the preceding year and make recommendations for additional legislation or other action it considers necessary to carry out the purposes of this chapter.
(b) A municipal housing authority shall file the report with the clerk of the municipality. A county housing authority shall file the report with the county clerk. A regional housing authority shall file the report with the county clerks of the counties in the authority.
The City Mayor, as stated by Texas law, is specifically responsible for the efficient operation of a municipal housing authority. That responsibility inherently includes efficient financial management. A municipal housing authority administers locally generated funds and HUD Federal housing program funds and is therefore subject to Federal audit.
Since the OIG report was published, two Taylor Mayors have refused to demand a competent criminal investigation for the fraudulent theft of $ millions from THA. Why? Because both Mayors falsely claim THA is not part of the City.
But, the law is specific and the Texas Attorney General and Texas Courts have determined, in multiple rulings dating from 1954, that a municipal housing authority created under Texas law is a division of the municipality that created the authority.
"Texas authorities presented with the issue have uniformly held
municipal housing authorities to be “divisions” of municipalities and, as such, subject to the laws applicable to municipalities. Mm v. Ho&g Auth of Dallas, 266 S.W.2d 487 (Tex. Civ. App.--Dallas 1954, writ refd n.r.e.); Aemu Casualty & Surety Co. v. Glidden Co., 283 S.W.2d 440 (Tex. Civ. App.-Eastland 1955), rev’d on other groti, 291 S.W.2d 315 (Tex. 1956); Attorney General Opinions JM-687 (1987); JM-573 (1986); MW-132 (1980)."
For obvious corrupt reason, two Taylor Mayors deny the Attorney General opinions and the cited multiple Texas Court rulings that a municipal housing authority is a division of the City. Neither Mayor making the false claim can provide any credible evidence that THA is not a division of the City.
The current Mayor should explain why his behavior is in conflict with the law he swore to uphold. It is suspicious behavior that demonstrates he has constructed and presented a lie to protect corruption.
Rather than demand a thorough and competent investigation of the HUD OIG findings of major felony crimes in Taylor, two Mayors would rather tell lies to protect corrupt officials.
The Mayor's false claim attempt to make THA’s organizational relationship a reason to ignore felony crimes committed in Taylor is an absurd smokescreen designed to fool the public and to conceal corruption.
So what if THA was not a part of Taylor? Felony crimes were committed against a public corporation. For criminal prosecution, it should not matter if THA is a division of the City or not. The fact remains that major felony crimes were committed against a public corporation in Taylor.
How can the District Attorney not be aware? Why would any District Attorney refuse to investigate and prosecute corrupt public officials taking money from programs supporting the elderly and disabled? That behavior alone is suspicious.
Why has the Williamson County District Attorney ignored these felony crimes against a public corporation? Does the Wilco District Attorney have some "old boy network" obligation to protect certain individuals from prosecution?
The crimes were committed against a government unit that Texas law placed under the direct control of the Taylor Mayor. The crimes were reported to the City Attorney who is under the direct control of the Mayor.
The crimes were committed in Taylor. The crimes were committed against a public corporation created by Taylor citizens. The crimes were committed against a division of City government that serves the most vulnerable citizens in Taylor. The crimes were committed under the noses of elected and appointed officials responsible for public assets and money, and who still have the same assigned responsibility. The crimes have cost citizens $ millions. The crimes continued for at least five years and were never reported to law enforcement by any official having responsibility for THA.
The multi-million $ THA crimes reek with the smell of brazen corruption and there is clear evidence of a continuing cooperative network of corrupt officials from the Mayor, through the Taylor City Attorney, to the Williamson County District Attorney. How could all these things happen otherwise?
What should matter to our elected leaders, including Taylor City Council members, is law and order enforcement that discourages and prevents government officials from organizing and facilitating a conspiracy to steal public assets and money. Sometimes that means criminal prosecution of their friends and supporters. Sadly, that is a naive expectation when your elected public officials demonstrate they are corrupt by ignoring crimes and taking measures to protect those who are stealing from the public.
When elected and appointed officials ignore, reduce, or attempt to deflect attention from major felony crimes against public assets, citizens should suspect motives driven by power and greed, mostly greed. We cannot trust our taxes and law enforcement to those kinds of officials.
We need quality men and women in public office. Women and men who will stand up for honesty and integrity, who are not afraid to speak out, who will demand justice, who will honor their oaths. As the conflict of interest debacle proved, Taylor's leadership is exceptionally weak in that kind of ethical behavior.
The THA crimes become more suspicious and concerning as the layers and money flow are examined. There was no legal action until after the OIG report was exposed and became public knowledge. There was public pressure, to include a media survey with a large majority of Taylor citizens wanting to know what happened. Finally, a civil suit was filed by the City Attorney who is a “contract” lawyer for the City and also has a private practice.
That “civil lawsuit” is a lawyer’s cash flow dream. It is an excuse and public gimmick to let major felony crimes, committed by the Taylor City Attorney's friends, go unpunished.
So far, the legal expense includes hundreds of thousands of $, public money, paid to the Taylor City Attorney and lawyers chosen by the City Attorney. Tax money spent because the City and District Attorney ignored felony crimes. Tax money that is now going into lawyers’ pockets and not going to the needed public housing programs.
If criminal complaints had been filed and acted upon, the property could have been confiscated as stolen assets and could have been returned to THA immediately. That money, $ millions, is now long gone and will never be recovered.
Who was there to protect the public’s assets? Who was supposed to protect the public’s assets? What was their real strategy, to protect public assets and money, or enrich themselves? Where was the City Attorney, the Mayor, the City Council? Where was the District Attorney and our Courts?
The THA Executive Director, who committed criminal acts according to the City Attorney’s civil lawsuit, paid himself $120,000 one year for working 10 hours a week. That pay came mostly from Federal funds, the HUD programs that support housing. Our Federal tax money. Those HUD housing funds were used to pay the former Executive Director’s civil suit legal bills.
The HUD program money and money generated by the stolen public assets were supposed to be used for safe, sanitary, and affordable housing for those in need and to create a fund to help meet future housing needs. Four lawyers, the Taylor City Attorney, the District Attorney, and two Taylor Mayors, have worked together to ensure that could not happen. Three of those individuals supported conflict of interest violations of the Taylor City Charter and said nothing about the suspicious transactions that preceded the Valero land deal.
In the next chapter, we will take a look at the non-profit corporations created for the illegal property transfer and confiscation. They are “Mallard Run Housing Development” and “Taylor Sunset Housing Development.” We will examine some of the revealing financial reports those non-profits are required to file with the U.S. Internal Revenue Service.
"Corruption in our courts and government will not be stopped by those at the top, they benefit too much. It can only be stopped from the bottom, by each voter becoming informed and holding city and county elected officials responsible.