Outgoing public housing chief named as target victim in federal whistleblower complaint

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INDIANAPOLIS – The man Indianapolis Mayor Joe Hogsett hired three years to fix the city’s troubled public housing agency is out.

Indianapolis Housing Agency Executive Director John Hall turned in his resignation Friday, two months before the end of his contract, at head of the $80 million a year city agency entrusted with meeting the low-income housing needs of approximately 24 thousand people in Marion County and partnering in alternative shelter options for homeless persons.

“I want to thank John for his leadership of IHA during an especially critical time period,” read a statement issued by the mayor which praised Hall for his performance during the COVID-19 pandemic.

Five days before he cleaned out his office, Hall was listed as, “the target victim of (a criminal) Enterprise; subjected to continuous harm, fear, threat and/or intimidation to obstruct him from lawfully performing his duties as a public official, most particularly protecting federal funds from further risk of waste, fraud and abuse,” according to a Whistleblower’s Complaint sent to the Office of Inspector General at the U.S. Department of Housing and Urban Development and obtained by Fox 59 News.

“I have not read a two-thousand page complaint,” said Hall who did not author the report. “I see some of the things that are being alleged. I lived it.”

The complaint details an alleged web of insider dealing, conflicts of interest and fraud in the purchase, sale and development of typically distressed properties in Indianapolis supposedly in pursuit of the goal of providing affordable housing for low-income residents but often to the benefit of well-connected industry insiders, public employees, elected officials, developers and lenders.

The mayor’s office told Fox 59 News that it was aware of the whistleblower’s complaint last week.

Much of the complaint traces the history of such financial transactions since the FBI raids of the Indianapolis Land Bank in 2013 that resulted in arrests of several employees of the city agency that was tasked with disposing of surplus distressed real estate.

The Indianapolis Land Bank was dissolved and succeeded by Renew Indianapolis which performs the same function.

The complaint documents real estate sales to buyers who either failed to make appreciable improvements to the properties in economically disadvantaged neighborhoods or flipped the purchases back to public or private buyers for greater profit.

“I think you have lots of documentation of some of the things that I encountered that were out of the norm from my first three months here,” said Hall. “If there was some sort of strategic assault against me, I wouldn’t be surprised, but I stayed focused on the work at hand.”

Hall said he encountered pushback from agency employees, stakeholders, IHA board members, not-for-profit entities, lenders and developers during his attempts to turn around the agency.

“I was excited about the opportunity to come clean up and reform an agency,” he said, recalling that his first weeks on the job included a failed HUD inspection, more than 100 audit and programming deficiency findings and a subpoena from the State Board of Accounts regarding a failure to file annual financial statements.

“Out the gate that first month was a huge wake-up call and I think we later found out we had a lot of vacant units that had gone unreported and relationships with our tax credit investors weren’t the best and our program participants weren’t receiving the benefits of why the programs were designed to help them.”

In less than three years Hall said he enhanced financial controls and contracting, increased revenue, raised occupancy rates and improved maintenance and property security, all while reducing staff and stepping up training of the remaining employees.

“One of the comments I had from the HUD program leadership is, ‘How are we finding all this stuff wrong with the agency and nothing’s coming back on your audits?’” he said. “Most definitely IHA is in a better position today than it was 34-36 months ago.

“It was really about showing progress, knocking off the list of items that were on this recovery plan and I think that’s what they were hungry for, they actually wanted to see IHA move forward and I think that’s what we accomplished.”

Hall said he admittedly ran into some headwinds during his efforts to reform the agency.

“Oh, absolutely. Changing management, that’s expected,” he said. “Most people who want change, they want the results, but to get to get to the actual change, all of that in-between, it can be a bumpy road.”

Eight months into his tenure in the summer of 2019, Hall was given a vote of confidence by Mayor Hogsett.

“Well, he’s a reformer and I’m sure that decisions he is making are changing things at IHA and, human nature being what it is, perhaps he’s engaged some people who are trying to push back,” Hogsett told Fox 59 News on August 8, 2019. “John has been brought in to remedy whatever wrongs have been occurring, whether its at IHA or whether its involved in any subsidiary of IHA. That’s John’s primary responsibility to reform and change.

“To the extent that there are people who are not supportive of John’s reformation, that needs to change because the agency is an important agency to the city and John has been brought in to reform it.”

Hall said one of his toughest challenges was to reign in Insight Development Corporation, IHA’s subsidiary entity charged with property development.

“Throughout the time I was executive director, the Insight Development Corporation, in my opinion, the entity had gone on a path that is away from IHA’s core mission and was kind of doing its own thing in my opinion, so, I know that that entity had a lot of community partners.”

Hall said he was baffled by Insight’s $116,000 payment toward the purchase of a decrepit auto repair garage at West 30th Street and Dr. Martin Luther King, Jr. Boulevard that began the year before he arrived and has yet to yield any residential or business development in the northwest side community.

“I’m aware of the Mustang Ranch,” Hall said. “I got hit with that I think in 2019, and really tried to say, ‘How did this come to be?’ in the Northwest Quality of Life Initiative, so, I’m aware of it but I’m not fully in depth with it over the last three years, especially the last year, the Northwest Quality of Life Initiative, the members actually asked me to remove myself from membership because I did not agree on a couple of the transactions that they were gonna do.”

Even though Hall praised some Insight projects, such as the “Rock n’ Riverside” development on the northwest side, as an attempt to halt gentrification of challenged neighborhoods while providing housing for moderate income buyers, the whistleblower’s complaint details economic failures of that specific program such as the sale of properties at a loss to Insight once renovation costs are figured in.

The complaint also details extensive substandard land holdings by city-county councilors and IHA board members in distressed neighborhoods that have not been improved.

“I am not aware of any conflicts of interest or ethic violations,” Hogsett said in 2019, “but if they do exist, I’m sure they’ll be uncovered and we’ll take appropriate action. This administration…has tried to be as open and transparent in our dealings and that applies to IHA.”

Chief Deputy Executive Director Marcia Lewis has been named interim IHA executive director.

There’s no word on whether the mayor will conduct a national search, such as the one that landed Hall, to find an outsider to continue the reform momentum of the last three years.

“There’s gonna be some politics or external factors that may prohibit IHA from becoming the best agency that it can be,” said Hall. “I think the next phase for the agency to move in is sustaining the work that has been done. Not everything is cleaned up. I’m not gonna tell you that. I think it’s the perfect relay race to hand off the baton and say, ‘Now that we’ve got a lot of the fires simmering, we’ve got the relationships satisfactory with our tax credit investors, now its time for somebody to come in with a fresh and renewed spirit and can lead the agency over the next three to four years.’”

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