December 18, 2019 at 11:45 am EST | by Lou Chibbaro Jr.
D.C. Auditor’s report questions funding decision for Mary’s House
Mary's House, gay news, Washington Blade
Polly Donaldson, director of the D.C. Department of Housing and Community Development, is one of Mayor Muriel Bowser’s LGBT cabinet members.

In a little-noticed development, a report released earlier this year by the Office of the D.C. Auditor named Mary’s House for Older Adults, a planned home for LGBT seniors, as one of five affordable housing projects that received millions of dollars in city housing funds that were “ranked in the bottom half” of 20 applicants.

The May 30 report says the lower ranking projects, including Mary’s House, were selected against the recommendations of expert staff evaluators by Polly Donaldson, the director of the D.C. Department of Housing and Community Development who as an out lesbian is one of Mayor Muriel Bowser’s LGBT cabinet members.

“I write to share concerns and recommendations pertaining to the procurement process that resulted in the award of $78 million for Housing Production Trust Fund (HPTF) projects in June 2018,” said D.C. Auditor Kathy Patterson, the author of the report, in a letter to the D.C. Council at the time the report was released.

“In brief, five of the nine proposals selected by leadership had been ranked in the bottom half of applications by staff evaluators and the final selection meant 353 fewer affordable housing units,” Patterson said.

She noted that the city-funded Housing Production Trust Fund was created with the full support of the mayor and Council to help relieve the city’s affordable housing crisis that experts say has forced thousands of residents to leave the city and has swelled the ranks of homeless residents.

The Trust Fund provides funds to both private development companies and nonprofit organizations like Mary’s House that enter into a partnership with a developer to build new and to preserve existing housing projects that are affordable to low and moderate income people.

Patterson has acknowledged that her office’s investigation into the D.C. housing department’s selection process for the affordable housing projects was triggered in part by an ethics complaint filed with the city’s Board of Ethics and Government Accountability in June 2018 by a whistleblower believed to have been an employee with the housing department.

Patterson declined to release the whistleblower’s report to the Blade, but the whistleblower him or herself appears to have given a copy of the report to the Washington City Paper, which describes it as “explosive” in its criticism of the way the lower ranking housing projects were selected by Donaldson for funding. Among other things the City Paper’s Loose Lips columnist reported earlier this month that the city’s former Deputy Mayor for Planning and Economic Development Brian Kenner and the former D.C. Director of Real Estate Sarosh Olpadwala “leaned on” Donaldson and her deputy, Allison Ladd, to steer city funding to at least one developer “politically connected” to the mayor. 

The Washington Post reported at the time the Auditor’s report was released that all five of the projects that received the lower rankings, including Mary’s House, were either developers themselves or in partnership with a developer that either directly or their executives have given campaign contributions to Mayor Bowser.

In statements submitted to Patterson that are included in the Auditor’s report, Donaldson disputes any claims that her decisions to select the housing projects were politically motivated, saying they were based solely on her overall assessment that the projects would benefit the city and those in need of affordable housing.

Bowser, meanwhile, announced in a June 2018 statement that the Department of Housing and Community Development had awarded Mary’s House $1.19 million from the Housing Production Trust Fund as part of a $103 million city funding allocation aimed at preserving or producing affordable housing for more than 1,700 residents, including seniors and people experiencing homelessness.

Imani Woody, founder and CEO of Mary’s House, has said plans for the facility call for replacing a single family house currently on the site of the facility at 401 Anacostia Road, S.E. with a new structure that will accommodate 15 LGBT seniors in 15 individual suites.

When contacted by the Washington Blade this week Woody declined to comment on the findings of the D.C. Auditor’s report

“Mary’s House for Older Adults applied for and was approved for D.C. funding,” she said. “We are not a part of the approval process and have nothing to say or add to this discussion.”

In a separate statement at the time the funding was announced, Donaldson said Mary’s House and the other projects approved for funding each met a series of criteria indicating they were viable projects that would boost the city’s and the mayor’s goal of increasing and preserving affordable housing.

“This is really a way to say we can help,” Donaldson said in her statement. “This is a nonprofit development,” she said. “Mary’s House is a nonprofit organization and we think it’s important to support some big projects and smaller projects like this one.”

In her Auditor’s report released on May 30, Patterson did not disclose why the staff evaluators at the Department of Housing and Community Development gave Mary’s House and the other four applicants for housing funds a low ranking. The report says the department’s Development Finance Division is responsible for conducting a staff review of the proposed projects and for presenting recommendations to the director, who has the authority to make the final decision on all projects.

“The May 30 report lists the Mary’s House project as one that got funded but hadn’t been ranked as high as a few that did not get funded in the announcements in spring 2018,” Patterson told the Blade in an email. “And the Development Finance Division did not recommend NOT funding Mary’s House – it was just given a lower rating in their scoring,” Patterson said in her email.

She also noted that the projects that were higher ranked that didn’t get funding in 2018 were funded a year later in 2019.

When contacted by the Blade for comment about the Auditor’s report and the issue of the lower ranking for the Mary’s House project, Donaldson sent a short email statement reiterating the more detailed response she sent to Patterson at the time the Auditor’s report was being prepared earlier this year.

“Mayor Bowser has made support for the production and preservation of affordable housing her top priority,” Donald said in her statement to the Blade. “She has made more investments and delivered more results than any Mayor previously,” she said.

“My agency followed all laws in making decisions in the best interest of the District,” she continued. “Further, the Council Auditor herself lauds the Development Finance Division controls that I put in place. D.C. must be inclusive and we must take into account developments across the city in making decisions with each RFP round.”

She was referring to a section of the Auditor’s report where Patterson points out that Donaldson, who assumed the job of housing director in 2015, put in place the detailed internal controls and processes for approving funding for housing projects. The whistleblower, however, accuses her of violating those procedures by rejecting the recommendations of her staff evaluators

Donaldson defies subpoena, invokes ‘deliberative process privilege’

Among the items Patterson included in an appendix to her Auditor’s report is a dramatic exchange of email messages between she and Donaldson over Patterson’s attempt to obtain internal housing department documents prepared by the evaluators giving their reasons for recommending projects for funding.

After Donaldson declined to turn over those documents on grounds that doing so would be harmful to future internal staff discussions on funding matters, Patterson issued Donaldson a subpoena that her office is authorized to obtain ordering her to turn over the documents.

Citing the D.C. law empowering the D.C. Auditor to obtain a subpoena, Patterson’s subpoena states, “YOU ARE HEREBY COMMANDED to produce and/or otherwise provide…any and all records” pertaining to the housing department’s Development Finance Division evaluation of the 2017 proposed housing projects, including the Mary’s House project.

Among the documents sought by the subpoena were “evaluators rating sheets, written comments, recommendations, and any other documentation indicating the opinion, evaluations, comments and recommendations of the evaluators” relating to the five projects in question.

In a four-page letter responding to the subpoena, Donaldson invoked what she called “deliberative process privilege,” which she said protects agency documents that are “both pre-decisional and deliberative” from being released to someone outside of the agency in which they were made.

“The Department objects to the production of evaluator rating sheets, written comments, recommendations, and any other documentation indicating the opinions, evaluations, comments, and recommendations of the evaluators related to any Development Finance Division project as they fall squarely under the deliberative process privilege,” Donaldson said in her April 29 letter to Patterson.

“Disclosure of these types of information would render the Request for Proposal and decision making processes ineffective and unable to achieve results in the best interests of the District,” she said in her letter.

In a May 3 letter responding to Donaldson’s letter, Patterson called Donaldson’s assertions “meritless.” She said regardless of whether the housing department has the authority to invoke deliberative process privilege, Congress through the D.C. Home Rule Act has provided her office with full authority to issue subpoenas and to petition the D.C. Superior Court to enforce those subpoenas.

“Despite your noncompliance with the Subpoena and prior information request, however, I have now obtained all the information on the DHCD Housing Production Trust Fund that I need for present purposes,” Patterson said in her letter. “While I am not withdrawing the Subpoena, I do not perceive a current need to involve the courts,” she said.

Had Patterson taken steps to enforce the subpoena, a D.C. Superior Court judge could have found Donaldson in contempt of court if she continued to refuse to obey the subpoena and possibly ordered her held in jail.

Donaldson didn’t respond to a question from the Blade asking if she felt so strongly about her belief that the documents in question should not be released that she would risk going to jail by defying the subpoena.

Patterson told the Blade that although the whistleblower had provided her office with many of the internal housing department documents she needed, she confirmed the authenticity of the documents by obtaining them by invoking another source of authority her office has. She arranged for the city’s IT office that oversees the D.C. employee email system to turn over internal email between housing department employees and managers, which contained copies of the internal documents Patterson needed. 

“If we had not had that option and we were not able to enlist the Executive Office of the Mayor in securing the documents (we go up the chain of command on such things) we would have gone to court to enforce the subpoena,” Patterson said.

Although Donaldson refused to turn over the internal evaluation documents, she submitted a detailed written explanation to Patterson of her reasons for selecting the five projects for funding that received a lower ranking. Among other things, she said shortly after the evaluation process was completed she learned that the D.C. Council had approved additional funding for the city’s Local Rent Supplement Program (LRSP) housing vouchers, which provide rent supplements to people in need of affordable housing.

“This new information allowed the prioritization and categorization of the projects based upon the amount of requested LRSP vouchers and was a primary driver of my decision to modify the recommendations made by the staff,” Donaldson said in one of her responses to the Auditor’s report.
“At all times I exercise my discretion in an impartial manner, without favoritism based on any impermissible grounds,” she said.

At the time the Auditor’s report was released, John Falcicchio, the mayor’s chief of staff, told the Washington Post Donaldson “has the authority and the responsibility to make decisions about how best to create and preserve affordable housing. We have full confidence in her ability to do so.”

Bowser nominated Donaldson to become director of the housing department in December 2014 in her role as mayor-elect. The D.C. Council approved her nomination a short time later. Housing activists have credited Donaldson, 62, as one of the city’s foremost experts on affordable housing issues and programs to address homelessness. Prior to assuming the job as housing department director Donaldson served since 2004 as executive director of Transitional Housing Corporation, a widely acclaimed nonprofit organization that provides services to homeless people and develops programs to transition them into permanent homes.

Lou Chibbaro Jr. has reported on the LGBT civil rights movement and the LGBT community for more than 30 years, beginning as a freelance writer and later as a staff reporter and currently as Senior News Reporter for the Washington Blade. He has chronicled LGBT-related developments as they have touched on a wide range of social, religious, and governmental institutions, including the White House, Congress, the U.S. Supreme Court, the military, local and national law enforcement agencies and the Catholic Church. Chibbaro has reported on LGBT issues and LGBT participation in local and national elections since 1976. He has covered the AIDS epidemic since it first surfaced in the early 1980s. Follow Lou

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