Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, March 19, 1992 TAG: 9203190150
SECTION: NATIONAL/INTERNATIONAL PAGE: C8 EDITION: METRO
SOURCE: The Washington Post
DATELINE: WASHINGTON LENGTH: Medium
They were all bought with Department of Housing and Urban Development funds that are supposed to benefit low-income Americans and eliminate slums across the United States, Rep. Thomas Lantos, D-Calif., revealed Wednesday.
As chairman of the House Government Operations employment and housing subcommittee, Lantos held a second oversight hearing on HUD's $3 billion Community Block Development Grant anti-poverty program and found many examples of abuse.
Much of the abuse stemmed from mismanagement of block grant funds by local officials, according to the subcommittee's findings. In 1987, for example, the city of Miami used $200,000 in grants to provide a loan that helped finance productions at a theater in a fashionable neighborhood.
"HUD funds should not be used . . . on a performance of `Les Miserables,' " Lantos said, but "for low-income people who are . . . living `Les Miserables' every day."
Miami officials also used the grants to give a $5.4 million loan at a 1 percent interest rate to an investment group headed by Saudi multimillionaire Amin Jamil al Dahlwali. The loan was to renovate a Miami office building al Dahlwali bought for $8.7 million. Intended to be rented, the Miami Freedom Tower, completed last year, still is unoccupied.
Nasim Rahman, a spokesman for Al Dahlwali, told lawmakers at the hearing: "We have done nothing wrong." He said the city of Miami had proposed that the group apply for the loan.
In Delaware County, Pa., Lantos's subcommittee found, the non-profit Partnership for Economic Development agency misused nearly $6 million in community block grant funds - including $4,000 for plastic model airplanes that were given as gifts, $1,700 for mugs with gold trim and expenditures for Broadway theater tickets, lavish banquets and bar tabs.
Mary Arty, chairwoman of the Delaware County Council, acknowledged that many of the abuses had occurred and said the former executive director of the partnership had been dismissed as a result. A local investigation is under way, she added.
by CNB