Ex-HUD official wants local agencies to pay him to study his idea

By Timothy Pratt (contact)

Saturday, Aug. 26, 2006 | 7:28 a.m.

In early 2005 Michael Liu, then assistant secretary of the federal Housing and Urban Development department, initiated conversations with local officials about the possibility of merging the valley's three housing authorities - or at least some of their services.

The idea was to save costs and deliver more help to the area's low- and middle-income residents.

That April, Liu followed up with a letter saying the department "approves the merging of all three agencies and stands ready to assist you."

In that letter, he promised to seek help on the legal aspects of merging, waive requirements for federal inspection of local affordable housing under the new agency for one year, and forgive any negative findings from previous reviews.

The three local authorities and other officials are now ready to evaluate bids for a study to determine whether the agencies should merge and how to do it.

And guess who is back?

None other than Michael Liu, now senior vice president of the Washington, D.C., consulting firm Dutko Worldwide, which says it can do the study for a mere $110,000.

Some local officials are not impressed.

Carl Rowe, hired this month as a consultant to direct the Las Vegas Housing Authority, called the move "pretty cheeky."

He says he will direct members of his staff on the evaluation committee to "absolutely not vote for that proposal," and that he will protest if Liu's firm wins.

Nancy Wesoff, executive director of the Clark County Housing Authority, says she would find it hard to support Liu's proposal "with such a blatant conflict of interest."

North Las Vegas Housing Authority Chief Executive Don England could not be reached for comment.

Liu, reached in Washington, calls his background in housing an advantage: "If they think that total lack of knowledge of the issue is something they would prefer, then that's their right."

The idea of consolidating the authorities has not been without controversy. Last spring, the housing authority boards balked at being left out of the discussions between the federal government and executives of the three authorities. Some Clark County board members said they were afraid they would inherit the problems of North Las Vegas and Las Vegas, both of which have experienced administrative and financial flaws.

Letters between Liu and the local agencies followed, and a coalition of city and county governments issued a request for proposals in June to study the idea.

Liu stepped down from the federal agency in May 2005, one month after his enthusiastic letter supporting a merger.

Wesoff recalls that Liu was unusually prompt in his correspondence on the issue, and that he was "behind the idea" of merging.

"Whoever the evaluators will be will have the right to take into account the background of the proposers, and make that part of their recommendation," Liu says.

He notes that while he thought a merger was a good idea when he was a federal official, the policy was just one of many he supported.

In fact, documents accompanying his company's proposal indicate that 33 mergers were being discussed while he was in office.

"I don't think that (supporting policies) should necessarily mean that rises to a conflict," Liu says.

"There are many people in federal government who study policies, go into the private sector and work on those policies."

Rowe is not so sure: "When you're dealing with a public agency, you've got to say, 'Can this appear to be a conflict of interest?' And if it does, you've got to say, 'No.' "

Wesoff says her agency is "not objecting to the study. We just want the process to be right."

In any case, the process has stalled for now. On Friday afternoon, a meeting scheduled for Monday to evaluate the bids for the study was canceled until further notice.