CAIRO — There are unlikely to be any criminal charges brought against James Wilson, the former longtime director of the Alexander County Housing Authority and mayor of Cairo.
In September, then-Acting Deputy Housing and Urban Development Inspector General Jeremy Kirkland told a U.S. House oversight panel that his office had forwarded the investigation to the U.S. attorney’s office for its review.
It is the general policy of the U.S. Attorney’s Office to neither confirm nor deny the existence of any criminal investigation. But given the high-profile probe into spending and management practices by past ACHA officials, Steven Weinhoeft, U.S. Attorney for the Southern District recently released a limited statement following numerous inquiries from The Southern.
“We believe the HUD complaint and resulting civil settlements provided a just resolution to the serious allegations of gross mismanagement at the Alexander County Housing Authority,” he said, via a spokesman.
Officials familiar with the months-long investigation into the saga that contributed to the loss of more than 300 public housing apartment units in Cairo and Thebes have told the newspaper that it is coming to an end without any criminal charges expected.
Weeks ago, the newspaper filed public records requests with both the HUD Office of Inspector General and U.S. Attorney’s Office seeking the U.S. attorney’s letter to the inspector general declining to pursue charges following his review of the case. The newspaper has not received any responsive documents to date.
Darryl Madden, spokesman for the HUD Office of Inspector General, has declined several requests for comment on the status of the investigation.
In November, Wilson reached a settlement agreement with HUD’s Office of Hearings and Appeals in which he agreed to pay $500,000 in civil penalties and assessments for fraudulent conduct. A HUD document outlining the agreement stated that he abused a position of trust, and “essentially admitted to engaging in fraud,” which negatively impacts taxpayers, public housing residents, and the government.
The civil claim accused Wilson of using federal funds to pay for numerous boozy junkets to destination cities for himself and select staff members. As The Southern found in a 2015 investigation, Wilson bought alcohol, pricey dinners, gifts and other items with the ACHA’s credit cards that were inappropriately paid off with federal housing funds. He and others also sometimes double-billed the ACHA for travel-related expenses to training conferences. Wilson attended about a dozen such conferences in the year leading up to his retirement, which HUD deemed excessive.
Additionally, Martha Franklin, a longtime employee who served as finance director under Wilson and for a short time as executive director upon his retirement, agreed to pay $30,000 to settle similar, but less extensive claims against her. In a document, HUD said she “failed to direct the income and resources of the ACHA to maintaining the ACHA’s properties or benefiting its residents; instead, Franklin continued the practice of directing ACHA’s income towards personal enjoyment and staff bonuses.”
Wilson served as executive director of the ACHA from 1989 to April 1, 2013. Wilson also served as mayor of Cairo for a dozen of those years, from 1991 to 2003, which HUD allowed by approving a waiver. Franklin served as finance director from 2004 through April 2013, and as executive director from April 2013 to March 2015.
At the September hearing, U.S. Rep. Emanuel Cleaver II, a Missouri Democrat, asked Kirkland, who presently serves as counsel to the HUD inspector general, whether criminal charges would be pursued. Cleaver said he grew up in public housing and was disgusted by the failures at multiple levels of government that led to Cairo’s housing crisis.
“The only time I’ve been more upset is in the aftermath of the 2008 economic crisis,” Cleaver told Kirkland, who appeared before a House Financial Services Oversight and Investigations Subcommittee. Cleaver said that he and his wife took their son to see a movie about the events leading up to The Great Recession.
“We walked out of the movie theater and he wouldn't even speak to me. He’s a young kid; just angry. He said, ‘Nobody’s been charged with anything?’ And that’s how I feel about this issue,” Cleaver said at the hearing last fall.
“If some of the kids who lived in public housing had broken into the (housing authority) office and stolen a computer, they'd be in jail — you know, a $500 computer, they’d be in jail," continued Cleaver, who opened saying he had to work hard to contain his emotion at the hearing because he was so upset by what he'd read about public housing in Cairo. "These greedy people. I, I … is your report going to be sent to the Justice Department?”
To his question, Kirkland responded: “I can confirm that we have referred this matter to the U.S. Attorney for the Southern District of Illinois and that matter has been accepted for criminal and civil prosecution.”
“OK, I feel better,” Cleaver told him. “Though not a lot, because people are still hurting.” Two months later, HUD announced the settlement agreements with Wilson and Franklin stemming from the civil claims it brought against them the year prior.
Rep. Sean Duffy, a Republican from Wisconsin, who chaired the committee, also said he thought that more should be done to hold housing authority officials accountable when mismanagement and misuse of funds is detected. He called the OIG’s report detailing dysfunction within the ACHA and HUD “disgusting, at a minimum, and possibly criminal, with those who were involved in the ACHA.”
“What’s even more frightening is this could be just the tip of the iceberg around the country,” Duffy said. Kirkland said he agreed with that assessment. Asked with whom the buck stops when public housing presents an immediate health and safety risk to families, Kirkland said that governmental bodies at all levels play a role, but that the ultimate responsibility rests with the HUD secretary to take action.
Late last year, as an extension of the inspector general’s work in Cairo, the HUD Office of Inspector General announced that it intended to conduct a nationwide review of “troubled” housing authorities. The Joint Housing Authority Review Team comprised of auditors, investigators and evaluators is reviewing poorly performing housing authorities in select cities across the country, according to Madden, the inspector general’s spokesman.
“The goal of the assessment is to identify and recommend paths to address emergency abatement conditions along with obtaining a comprehensive understanding of any systemic problems facing these (housing authorities),” he said. The initiative began with top-to-bottom reviews of public housing in four small Midwestern communities: Gary, Indiana; Adams County, Ohio; Highland Park, Michigan; and Jeffersonville, Indiana.
Wilson did not return a message seeking comment this week. In 2015, he blamed the bulk of the ACHA’s problems of congressional cuts to public housing programs that challenged upkeep and maintenance, especially at the two 1940s-era buildings that HUD decided to tear down rather than repair. In 2013, in response to one of HUD’s critical reviews of the housing authority’s practices and the condition of its properties, Wilson told HUD that he agreed that Elmwood and McBride were obsolete, and asked HUD what funding options ACHA had to fix or replace them. It does not appear that HUD responded to Wilson’s specific question, according to a review of documents by the newspaper.
Architectural assessments conducted on the ACHA’s behalf in late 2015 found that it would take about $7 million to immediately bring the properties up to standard, and $40 million over two decades. Instead, HUD announced in early 2017 that it intended to provide families moving expenses and vouchers, which subsidizes rent in privately owned rentals that accept them and can pass inspection.
Because of the shortage of affordable housing in Cairo, some families that had hoped to remain had to move more than hour away to find suitable housing. About 70 of 185 families were able to remain in Cairo. Carbondale was the next-most popular city, where residents found openings in some apartments that had vacancies because of declining enrollment at Southern Illinois University Carbondale, according to an official who assisted with the relocation effort. Some families welcomed the opportunity to move with vouchers to communities with more job options and activities for children, but it was still a difficult process.
Last month, a general contractor began the process of tearing down Elmwood and McBride, drawing emotional responses from former tenants on social media. Early work has focused on asbestos abatement and removal of sidewalks and basketball courts. The buildings start coming down in about two weeks, said Earth Services’ co-owner Josh Appleton. As for the Thebes properties, HUD spokesman Brian Sullivan said Friday that an application to approve the demolition of Mary Alice Meadows and Sunset Terrace apartments is under review at the agency. HUD announced plans to also tear down these buildings in early 2018.
Across the country, thousands of public housing units are lost every year to age and neglect. In recent years, most new affordable housing development comes about through so-called public-private partnerships involving low-income housing tax credits and other HUD grants and subsidies. But such deals are difficult to patch together in rural towns and distressed small cities.
HUD spokesman Jereon Brown has said that the agency made efforts to find a private developer interested in partnering on a development or renovation deal in Cairo, and none were interested. At a public forum in March, citizens expressed continued frustration over the loss of nearly all of Cairo’s family public housing units. The remaining high rise towers and scattered site developments consist mostly of one-bedroom units. There are only about a dozen two-bedroom units remaining, and four three-bedroom units.
Community activist Phillip Matthews asked Brown at the meeting why HUD wasn’t doing more to rebuild housing here, given that its oversight failure contributed to the loss of housing. Brown said the redevelopment could have taken place in Cairo if the federal dollars had been invested appropriately by past ACHA managers.
"Or if they had proper oversight from HUD to make sure it was being invested correctly," Matthews responded.
“Of if you didn't have a mayor or an executive director who was spending it the way they were spending it,” Brown retorted. “Who was overseeing that?”