|HUD No. 00-214|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Wednesday|
|Or contact your local HUD office||August 9, 2000|
STATEMENT BY HUD SPOKESMAN ANDREW L. LLUBERES ON PUERTO RICO PUBLIC HOUSING ADMINISTRATION
HUD is following the criminal investigations into alleged fraud in Puerto Rico closely. Each indicted individual has been referred to HUD's Enforcement Center for suspension from further HUD contracts. The Department will also seek to debar any individual who is found to have engaged in fraud.
HUD continues to believe that a takeover of the Puerto Rico Public Housing Administration (PRPHA) is a remedy of last resort that is not yet warranted. PRPHA is no longer a "troubled" housing agency, has earned unqualified financial opinions from its independent auditors and has made important internal management changes designed to strengthen its financial controls, including establishing an independent Bid Board and using an independent accounting firm to help run PRPHA's finance department.
HUD is, however, concerned about the management and conditions of PRPHA. HUD has dispatched a team from the Troubled Agency Recovery Center (TARC) team to inspect the physical condition of PRPHA housing and to ensure that needed repairs are made. Deputy Secretary Ramirez has also directed the Real Estate Assessment Center (REAC) to expedite its regular annual inspection of PRPHA. HUD will assess whether PRPHA's changes have produced measurable progress before considering whether additional corrective actions, including a receivership, are warranted.
HUD's agreement to settle PRPHA's $500 million-plus legal claim was a reasonable decision that was approved by the United States Department of Justice. The settlement agreement continues to enjoy HUD's full support.
The settlement of PRPHA's claims of unfair treatment is a separate issue from the question of whether a receiver should be appointed. HUD believes it is important to keep its roles as a litigant and federal monitor separate in order to preserve HUD's ability to demand greater accountability.