The members of the scandal-plagued Region VII Housing Authority board voted today to cease operations.
The housing authority’s records will be sent to
“What’s taking place today is very devastating, in my opinion,” Board member Bennie Barreras of Socorro said at today’s meeting, before the board voted to shut down the operation.
The state’s housing authorities have been plagued by scandal in recent months that has included the resignations of the directors in
The move by Region VII comes after the Region III board voted Friday to inform other housing authorities it had been funding that it could no longer do so. Without funds, Region VII had little choice.
For years, Region III was run by former state Rep. Vincent “Smiley” Gallegos. He was tasked with helping restart other authorities around the state, and did so by loaning them money, and he essentially ran the entire operation.
Following damning reports from the governor’s office and State Investment Council, Gallegos was replaced earlier this month by Mid-Region Council of Governments Director Lawrence Rael, who told Region VII board members today that the money Gallegos loaned them was to be used only to rehabilitate homes.
Region VII built up almost $800,000 in debt to Region III. That money was spent primarily on salaries and office space, violating the terms of the bonds.
The bonds should also not have been used to purchase land for new developments, Rael said. That includes a 33-lot development Region III and Region VII planned to build on
“The State Investment Council’s opinion is that property should not have been purchased with these bonds,” Rael said.
The investment council has hired a lawyer to investigate and try to piece together the mess. The review by the governor’s office found that problems were so great the authorities would have trouble surviving.
In
In addition to the investment council investigation, I’m told federal agencies are examining the situation, but those agencies do not confirm investigations. Region VII Board Member Frances Williams said at today’s meeting that there is cause for investigation.
“I think we’re in big trouble. We have not been serving the people of this community,” she said. “… We haven’t put a nail on the wall. We haven’t put a house on the ground and yet we’ve spent almost $800,000. That, to me, is pretty criminal.”
It was Williams who first made public the allegations that have led to the current situation.
Rael said he believes the housing authority law, first created in
That doesn’t account for startup costs, Rael said, adding that he doesn’t believe such a system can work.
The Region VII board members seemed to agree. At least one indicated he believed the board was placed in a difficult position by being charged with providing affordable housing without being given the funding to do it.
Rael said he expects that the housing authorities will be restructured and resurrected, and said proposed legislation is being drafted.
For now, the state is still in the process of figuring out what happened and whether there is any way to recover any of the $5 million the authorities still owe the state.
“We’re trying, sort of, to put the pieces together,” Rael said.
There was much he wouldn’t discuss publicly, which might be a further indicator that other investigations are taking place.
This scandal isn’t over. The final report from the investment council isn’t yet complete, and sources tell me the findings will be much worse than what is currently known publicly. Expect some fallout for Speaker of the House Ben Lujan, a close friend of Gallegos who has privately defended him during this scandal.