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DAVID KARPJust 10 years ago, Tampa's housing program was lauded by the vice president. Now it lies in shameful ruins.
TAMPA - The vice president of the United States walked through the pink-and-white house, amazed at the work that had been done.
Decked in blue jeans and cowboy boots, he praised Tampa's housing program as a model for the nation.
A decade ago, the city's housing program drew the attention of Vice President Al Gore and was a source of great civic pride.
Today, that program has become a symbol of shame.
On Thursday, a federal grand jury unsealed a 60-count indictment that alleges that the former city housing chief used the program as a slush fund to enrich himself.
The indictment charges Steve LaBrake and four others with fraud, conspiracy and bribery.
"The saddest part of all of this is it set back our housing program for probably a decade," said former City Council member Bob Buckhorn, who worked to create the program's national reputation.
Instead of expanding the program, Mayor Pam Iorio now must spend months scrutinizing the staff and rebuilding ties with federal housing officials. She pledged this week to restructure the department and re-evaluate how the city works with private nonprofit corporations to provide housing to the poor.
"What bothers me the most is that rather than spend our time and money to develop affordable housing for residents who badly need it, we are spending time looking at files and preparing spreadsheets," said Mark Huey, the mayor's new economic development administrator, who will oversee changes. "It's the loss of momentum that is most disturbing."
Former Mayor Sandy Freedman made housing her top priority and took a personal interest in it. Her focus was on restoring modest homes one by one.
As a means to that end, Freedman believed in part of the program that became its Achilles heel: the partnership with nonprofits.
"You have to have a relationship with nonprofits," Freedman said Friday. "You just have to have an arms-length relationship with them."
Here's how it worked: The city used its financial credit to get banks to make loans to nonprofits. The nonprofits used the loans to build and repair homes for the poor.
The city supervised the work and helped the nonprofits with staff for such tasks as screening loan applicants.
The system, though, required a balance: The city had to police the nonprofits with which it struck partnerships.
Then Dick Greco took office in 1995. Freedman saw the first red flag when the city gave the nonprofits office space.
"The problem is they got too close to each other, and they all got in bed together," she said.
Greco, a developer of shopping malls, did not share Freedman's passion for low-income housing. His interest lay in developing commercial districts in Ybor City and Tampa Heights. He focused on projects such as luxury condos by the Tampa Museum of Art and a new upscale convention center hotel. He poured dollars into office buildings such as the German-American Club in Ybor City.
Big projects like those raised property tax values and lured in smaller developments.
Banker Joe Voskerchian noticed the changes. As a banker, he had worked with Freedman to get loans for the low-cost homes.
"It became a different type of program," he said. "Greco's focus was not so much affordable housing as it was getting into more of the glitzy areas."
Bob Harrell, the housing chief under Freedman, lost his post. Harrell had been the force at City Hall that kept things from getting out of hand, said Steve LaBour, a top Freedman aide.
"You need someone to say, "We can't go that way. It would not be appropriate,"' LaBour said. "Bob provided that."
LaBrake took over and was known as the good soldier, someone who would get the mayor's work done, LaBour said. When LaBour would asked him about a project, LaBrake's first response would be: "Does the mayor want to do this?"
Federal auditors said LaBrake bent the rules to accomplish Greco's goals. In 1999, a federal audit by HUD found that the city used federal dollars that were designated for the poor to assemble land for luxury townhomes.
Appearing before the City Council, LaBrake called the audit wrong. Except for Buckhorn, the council seemed appeased. Few at City Hall could challenge LaBrake's knowledge of complex housing rules.
In 1996, an internal audit reported that the affordable housing program had loaned money to the wealthy.
Voskerchian chaired a committee to review the audit, and it recommended that an outside group examine every questionable loan. Greco promised it would be done, Voskerchian said.
"We never heard anything more," he said.
No outside group was formed. Instead, the task was given to a nonprofit funded by the city, internal auditor Cynthia Miller said. Miller said Friday that she doesn't know of any review done by that group.
Meanwhile, the wall separating the city and nonprofits had been shattered.
The city was supposed to audit nonprofits such as THAP, Tampa-Hillsborough Action Plan, but audits were not regularly done. When they were ordered, THAP would not turn over complete financial records to auditors, but LaBrake continued to funnel millions to THAP anyway.
- David Karp can be reached at 813 226-3376 or karp@sptimes.com