Conflict of Interest Issue Soon to be in HUD’s Hands

Local News

A controversy surrounding a conflict of interest will soon be in the hands of the U.S. Department of Housing and Urban Development (HUD). That federal agency will determine whether to grant an exception to the conflict of interest, which involves the son of a developer living at a home built by the developer using federal tax dollars.

On Thursday afternoon, the Evansville Board of Public works read into the public record a conflict of interest disclosure statement, which notifies the federal government that a conflict of interest exists concerning the home built by the Memorial Community Development Corp. using federal HOME Investment Partnership funds. However, Evansville city officials say and public records suggest this step in the process should have been completed more than four months months ago, long before the son of the developer moved into the home.  

As Eyewitness News has previously reported, the home located in the 800-block of Washington Avenue was built using $182,000 from a federal grant program intended to help low income individuals obtain or retain affordable housing. Another federal grant totaling $36,440 helped connect the three-bedroom home to the city’s sewer system, bringing a total investment of more than $222,000. The federal grant money was provided to the non-profit Memorial CDC.

On February 1st, Austin Brooks, the son of Rev. Adrian Brooks, signed an agreement with Memorial CDC to lease the newly-constructed home, according to the lease agreement. 

Rev. Brooks is the president and chief executive officer of Memorial CDC. While these types of conflicts of interest are generally illegal, the federal government routinely grants exceptions and requires disclosure of any conflicts of interest that are real or apparent.

According to federal guidelines, there’s a process that must be followed in order to be granted an exception to a conflict of interest. The conflict of interest disclosure statement must be filled out and submitted to a governmental entity. In this case, the governmental entity would be the City of Evansville. Once the form is submitted, the city must present the document to a public body like the City Council or Board of Public Works. That public body will then read the conflict of interest into the public record and submit all applicable documentation to the federal government for approval. Only the federal government — or HUD in this case — can approve the exception.

“I have no doubt that HUD will see we followed the protocol and that everything is in order,” Rev. Brooks said after the BPW meeting on Thursday afternoon. “We followed the policies and procedures that we have always followed.”

Kelley Coures, the executive director of the Department of Metropolitan Development, declined to comment following Thursday’s meeting, saying the city is following HUD guidelines. Coures has previously stated that it appears Memorial CDC did not follow the process. Coures stated the presence of the conflict of interest statement wasn’t discovered until after the city conducted a federally-required audit in mid-April. 

“To date, Memorial CDC has done a good job of filling their homes with income-qualified people. This is just one of those exceptions that we’ve never had before. We’re trying to work through it as fast as possible,” Coures said. “The city can’t approve an exception to policy. That exception has to be approved by [the U.S. Department of Housing and Urban Development].

“This process was not followed but I think it was probably an oversight [by Memorial CDC]. But we’re trying as best we can to get this thing resolved as best we can and as quickly as we can.”

Rev. Brooks repeatedly stated Thursday that the non-profit organization, which has been in partnership with the city for more than two decades, followed the guidelines by the book. Rev. Brooks, however, would not explicitly state whether he believed the city dropped the ball on this issue.

“We gave [the city] the whole file as requested,” Rev. Brooks stated. “We follow the protocol. We’ve always followed the protocol. We’ve been developing homes, extending services to this community for 24 years; not 24 days, not 24 months but 24 years.”

Rev. Brooks also alluded to previous allegations that he made that the increased scrutiny from the city was politically-motivated. Rev. Brooks and other community leaders have recently raised concerns about gentrification and whether it is happening in Evansville. Rev. Brooks and other community leaders also brought to light concerns about a change in ownership at Lincoln Estates and the uncertain futures for the dozens of tenants there, many of whom are low income. 

“I think the general public has come to their own conclusions if they look at the sequence of events,” Rev. Brooks said.

Rev. Brooks also mentioned how the conflict of interest issue was previously on the City Council agenda instead of the Board of Public Works. In at least five prior cases, Brooks said, the Board of Public Works has taken up the conflicts of interest — not the City Council. However, Coures maintains that the decision to put the issue on the City Council’s agenda on Monday night was due to it being the first public meeting available.

Once the entire file is sent, federal officials at HUD will review and later decide whether to grant the exception to the conflict of interest. The federal agency can make any number of decisions ranging from permitting Brooks’ son to live at the house to clawing back the grant money given to Memorial CDC for the project. 

When asked if he still stands by the decision whether to allow his son to move into the house, Brooks said, “We’ve followed the protocol. That’s what we did. We’ve always followed the protocol and precedents. We did what we were supposed to do. We did what we were supposed to do.”

 

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