April 2004
You recently retired from the U.S. Air Force and go to work for a non-profit agency that works with the city’s low income housing program which is funded by a federal grant. On four separate occasions over the next few months you are told by the city program administrator to use money from one federal grant to pay for a project that wasn’t covered by the grant. At first you follow orders and then begin to realize that if anyone objected you would be vulnerable to charges of misusing federal funds. So what do you do?
You put your objections into writing and call the regional headquarters of the U.S. Department of Housing & Urban Development identifying yourself as a whistle-blower. In the meantime, you are asked to approve the expenditure of $87,150 on a private residence that would sell for $70,000. You resist, asserting that federal guidelines prohibit the city from spending that much money on any low-income housing. The program administrator complains to your boss that you are not attentive, productive, or responsive to city staff. Your boss removes you from the project. Frustrated but convinced that you did the right thing, you quit your job and write a letter to the mayor detailing your concerns about the misuse of federal funds. The mayor never responds.
A few months later, HUD officials admonish city officials about using low-income housing funds to help residents who did not qualify. Fast forward two more years–the city’s internal auditing staff reports to the mayor that the housing administrator has issued questionable loans, kept poor records, and awarded non-competitive bids. HUD officials also warn the mayor that the administrator may have misused $1.4 million in federal funds. The mayor dismisses the criticism by HUD officials, saying that he has made changes in response to the internal audit report.
Federal auditors are still not satisfied and warn that the city may have to repay the $1.4 million. The administrator claims that the feds are applying ridiculous rules. The mayor backs him. The administrator appears before city council and asserts that “we do not intend to follow HUD’s direction at this point.” All but one member of city council praises the administrator.
Fast forward two more years . . . a federal indictment charges that the city housing administrator used government jobs to reap thousands of dollars in gratuities for seven years. The city is required to wire transfer the U.S. Treasury a total of $1,402,650.
What’s a whistle-blower to do?
Source: based on a story reported in St. Petersburg Times, March 8, 2004:B1