Low income housing tax credit developer and star government witness in the Dallas public corruption trial Bill Fisher admitted in testimony in federal court today that he paid $55,000 to a community organization to support his application to the state for low income housing tax credits.
Fisher’s testimony is reported in the Dallas Morning News’ Crime Blog.
I posted in a blog entry here on July 29 the contract between Fisher and the Black State Employees Association of Texas (BSEAT) for $55,000. To earn the money, BSEAT was required to obtain support letters for Fischer’s development from the city council member and state senator for submission to the Texas Department of Housing and Community Affairs (TDHCA) and to speak in favor of the development at TDHCA public hearings.
Rules in the current Qualified Allocation Plan (QAP) appear to prohibit developer’s from paying community organizations to support their housing projects. The QAP in force at the time Fisher paid the community organization is not available on the internet at this time. Here is the current rule…
(L) A certification that the Applicant, Developer, or any employee or agent of the Applicant has not formed a Neighborhood Organization for purposes of subsection (i)(2) of this section, has not given money or a gift to cause the Neighborhood Organization to take its position of support or opposition, nor has provided any assistance to a Neighborhood Organization to meet the requirements under subsection (i)(2) of this section which are not allowed under that subsection, as it relates to the Applicant’s Application or any other Application under consideration in 2009. (QAP page 34)
The Dallas Morning News reported Fisher’s testimony today as…
Fisher said he agreed to pay $55,000 to Allen McGill’s and Darren Reagan’s BSEAT group (which prosecutors allege was a sham organization).
Why? Busch [federal prosecutor] asked.
“At the time they appeared to be an established community group and we needed help,” Fisher said. “Our projects were going south and it would probably have been a blow to our business we would not have recovered from.”
Fisher: “We’re desperate at this point.” He said he his company was basically ready to involve BSEAT in any way to salvage the projects. The company had invested more than $1 million on those two projects based on Hill’s purported support, Fisher said.
Fisher said he signed a contract with BSEAT on Oct. 20, 2004.
Zinger of the afternoon came when Busch asked Fisher, who else did you hire for your projects?
“Who didn’t I hire,” Fisher said, then ticked off some other names, including consultant Carol Reed and a former state senator (David Kane?). “We pretty much involved anybody we could to salvage it.”
Bribing community organizations to support your proposed low income housing development is disgusting.
Fisher does not seem to have been bothered by the ethics of his actions. This is further proof of the “culture of greed” that I have blogged has infected some developers in the housing tax credit development industry in Texas.
This scandal, reported on the front page of the state’s leading newspaper is not going to blow over. These practices have inflicted major damage to public support for housing programs. State sanctions against developers resorting to the type of actions that Fisher engaged in need to be carefully reviewed by TDHCA board and staff. Rules must be put in place and vigorously enforced to permanently remove developers from doing business with the state who resort to bribing community organizations to support their projects.