Dallas City Hall Claims HUD Was in on Local Misdeeds. They Were Still Misdeeds.

Yesterday in its first official response to a federal investigation that found Dallas guilty of misappropriating funds and furthering segregation, Dallas City Hall said the feds were in on the whole thing themselves from the beginning:

"It is important to note that HUD has given final approval of all projects assisted by federal housing funds, either on the local level and/or from the Washington, D.C., office," city spokesman Frank Librio said in a prepared statement. "Any proposed projects assisted by federal housing funds must be approved by HUD before they may be implemented. Now the Fort Worth Office of HUD has issued a letter where it contends that the city has violated HUD guidelines and regulations."

See also: The Feds Say Dallas City Hall Has Promoted Racial Segregation in Housing Projects for Years

Westchester County, New York, tried the same argument seven years ago when the same Washington law firm involved in the Dallas complaint brought a compliant to HUD saying Westchester was doing what Dallas is doing now. That defense didn't work. At all.

Westchester ended up making a $62.5 million settlement with HUD. They subsequently balked at other terms of the settlement that involved reducing segregation rather than increasing it. HUD is now in the process of cutting off Westchester's community development block grant (CDBG) funds, a move that would be disastrous here.

There are two reasons why it doesn't work to say the sheriff must have known you were a bootlegger. First, so what? Second, in this case anyway, the sheriff couldn't have known. HUD does not monitor the use of its CDBG money. Instead it relies on local governments to certify -- that is, sign a sworn statement every year -- that they are doing what the law says they must do with the money.

Dallas council member Scott Griggs gets it. He compares the certification process to self-insurance, where the city swears it's got things covered. "The city is self-insured, and HUD, because we're a municipality, has accepted our self-insurance for some period of time." But now, he says, HUD is telling Dallas it was cheating on the self-insurance.

Griggs said what he expects next from HUD is evidence that Dallas has not been doing the things it swore it was doing every year in the certifications -- for example, carrying out serious analyses of segregation in the city and the factors contributing to it, as required by federal law of cities that take this money.

You don't have to take the money. But if you take the money -- and no matter what anybody else is doing or saying or whispering in your ear -- you do have to obey the law. That's why they call it "the law."

Griggs said he is also concerned by references in HUD's 29-page investigative report to multiple warnings HUD says it has given to Dallas officials over the years, expressing its "concerns" that things in Dallas didn't smell quite right. For example, HUD says it warned Dallas not to let developers skate on their obligation to provide affordable housing units when they are still supposed to be providing them by contract and by law. In the report, HUD cites multiple incidents where Dallas went ahead and did it anyway even after being warned.

As of yesterday, the full City Council still had not received copies of the HUD investigation nor had the HUD matter been slated for a briefing by city lawyers to the council. Griggs and new council member Philip Kingston, both of whom are lawyers, asked for and received copies of the report when they received a memo from staff saying something important had come in from HUD but not saying what. They both said, "What?"

If the Dallas response -- "The sheriff knew we was bad" -- resembles the ill-fated strategy of Westchester County, the immediate contrast may be an entity not often suspected of doing anything smart: the state of Texas. In 2010 the state came to a settlement with HUD over a complaint brought by Texas Low Income Housing Information Service and Texas Appleseed. The two nonprofits told HUD Texas had misspent hundreds of millions in CDBG money in the relief effort after Hurricanes Ike and Dolly in 2008.

Texas officials looked at the complaint, saw it was righteous, basically threw up their hands and came quickly to a $1.7 billion settlement. That's a lot of money, but the premise is that it's better than losing way more than that in future federal support, not to mention having a federal judge run your government.

Over all of this loom large and fundamental questions. Does this really mean Dallas is becoming more segregated? Has that been going on for a long time? Did our city officials just not realize it was happening?

We'll work on those questions tomorrow in this space, but just as a preview, the answers are as follows: 1) Yes, we have been becoming more segregated recently. 2) No, we were actually getting less segregated until city officials initiated the housing policies HUD is complaining about. 3) City Hall did realize what was going on, based on their own studies and reports, which confirm the evidence in the HUD complaint.

Talk to you 'bout that tomorrow.

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