FBI Investigators Seize Guam Housing and Urban Renewal Authority’s Records

Agency decision on tax credits under investigation

By Gaynor Dumat-ol Daleno

HAGÅTÑA, Guam (Pacific Daily News, June 13, 2016) – Federal and local authorities seized paper and electronic records after a weekend-long search of the Guam Housing and Urban Renewal Authority building.

Investigators from the FBI, the U.S. Housing and Urban Development’s Office of Inspector General, and the local attorney general’s office served a search warrant at GHURA’s Sinajana office Friday.

The authorities left GHURA around 4 a.m. Monday, said GHURA Executive Director Mike Duenas.

“We have an inventory of the items that were taken. For the most part, they are paper records,” he said. “They also made an image of our servers and storage drives and that’s a lengthy process, and we’re talking terabytes of information.”

Duenas couldn’t say what the search warrant was specifically for, but noted that federal authorities in 2011 started asking questions about the agency’s decision to award federal tax credits for low-income housing programs.

The agency had announced that $3.6 million in tax credits were to be made available, including unused tax credits from 2010.

The agency awarded the tax credits, which are used by developers as an incentive to build affordable housing, to the lowest-rated proposals submitted by applicants.

“It’s no secret that in the 2011 cycle, we received applications from four different developers. One developer submitted two proposals. And the proposals were ranked and the board made the awards, and based on their review, they awarded the credits to the developers ranked fourth and fifth. And that’s where the controversy stems forward.”

Duenas was officially named GHURA executive director in January 2013.

Marcel Camacho was GHURA’s executive director at the time the tax credits were awarded. Camacho resigned in March 2012 and stated in his resignation letter “the proper authorities have already been notified by others of some of the irregularities in the handling (of) the Low Income Housing Tax Credit allocation (in 2011).”

Camacho also wrote in his resignation letter he refused to sign the final tax credit agreement as GHURA’s executive director “because I believed it was in my best interest based on my moral and ethical standards.”

GHURA ignored its evaluation committee’s ranking and awarded the tax credits to Great Homes LLC and Tumon Heights Tower, whose applications were ranked fourth and fifth by the agency’s evaluation committee, according to a bid protest filed by Medallion Guam LLC, the company whose proposal ranked first.

Medallion proposed to build 170 standalone housing units that would be located in central Guam.

GHURA rejected Medallion’s proposal and chose “denser, urban style housing projects that provide fewer units to Guam residents,” according to the Medallion protest letter.

GHURA’s decision “strains credulity” and ignores GHURA’s stated goal to act “in the best interests” of meeting the island’s housing needs, states Medallion’s protest.

GHURA eventually dismissed Medallion Guam’s procurement challenge.

Although federal agents took the lead in the weekend search, they went to the local Superior Court of Guam to obtain a search warrant. It’s not uncommon for the Office of the Attorney General and federal authorities to collaborate in cases, or search warrants, according to AG’s office spokeswoman Carlina Charfauros.

U.S. Attorney for Guam Alicia Limtiaco was unable to respond as of press time when the Pacific Daily News asked why her office didn’t obtain the search warrant.

GHURA reopened for its normal workday Monday morning, and services to clients weren’t disrupted by the execution of the search warrant, Duenas said.

Executive Director Mike Duenas said documents and digital files were seized in the nearly 3-day raid, but operations continue as usual. Gaynor Dumat-ol Daleno/PDN

GHURA administers about $42 million in HUD-funded housing assistance programs each year, including programs for island families who need help with rent payments, and shelter programs for military veterans and homeless Guamanians.

Without HUD’s funding, most of GHURA’s housing assistance, including the Section 8 rent voucher program, which helps thousands of families, would be without cash.

Pacific Daily News
Copyright © 2016 Guam Pacific Daily News. All Rights Reserved

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