I set out in a blog entry on August 7 ways to objectify the letters of support from community groups and local officials. If those reforms are put in place they would go a long way toward curtailing these abuses.

I would also add the reform I suggested in my post of August 13 — cutting back on the excessive levels of developer profit in the LIHTC program. A large part of this behavior is fueled by the excessive money sloshing around in developer’s pockets through the tax credit program.

The price to play only elevated to a level that the developer did not want to pay because of the system that requires the support of state and local elected official support (local support if the development is in a high LIHTC concentration area) and neighborhood groups. I’ve never known a developer to willingly part with money in the form of a direct bribe to sway a community group to support their development without being asked. I have seen many instances where developers were encouraged to hire certain consultants/lobbyist to gain the support of elected officials and neighborhood groups for their developments. And from where do these consultants gain the political influence? A cynic would say from campaign contributions. What’s the difference you may ask? Contributions filed with the Texas Ethics Commission are legal.

You mention that the courts will also take care of the sham community groups and corrupt officials, but you fail to mention that at least one developer and his wife have cut deals and will serve some jail time. It seems as if the courts are working to purge the system on both sides of application process.

Based on your analysis, it would seem as if the only thing to do is to purge the overly proscriptive statue governing the QAP and eliminate the support letter from state and local officials and community groups. That seems easy enough to do, except when you consider that many legislators benefit directly from this system and they are the ones that would have to make the change. Perhaps Rep. Hodge will carry that piece of legislation for you in the next session.

The developer has sought to portray himself in the press as courageous for standing up to a corrupt process. But the testimony shows he was only too willing to play the game until the price became too high. (See my August 12 blog for details).

The community shakedown artists and corrupt officials in this case will be punished by the court. That is as it should be.

The policy question is whether will we continue to allow a tax credit system in Texas to operate in a way that sends board members of TDHCA (several years ago) to prison for taking bribes from developers and sends elected officials and pseudo community organization people to jail every few years for taking bribes from developers whenever the competition for tax credits makes one developer angry enough to turn on another developer and blow the whistle. The government’s own witness admits he was playing this payoff game himself until the price got too high (half of his $1.5 million developer fee).

This trial has taught us what we all knew — corruption is endemic in the Texas LIHTC program. There is too much money on the table. It allows developers to use it to pay off people and all that extra money attracts shakedown artists.

As I said, the courts will deal with the extortionists. But shame on us for trying to put all the blame on them. We must clean our own house of those whose personal ethics are so low that they play these games.