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Audit: Alaska Native dorm improperly approved
APRIL 17, 2001

Former officials appointed by President Clinton to the Department of Housing and Urban Development improperly authorized a $9.2 million dorm for 40 Alaska Native students, an internal audit concluded last month.

Responding to several anonymous complaints, HUD's Inspector General's office investigated the project, the brainchild of Cook Inlet Region, Inc. (CIRI), an Alaska Native corporation. The corporation's housing authority cited high drop-out rates and high costs of living in Anchorage as the reason for needing funds to construct a dorm at Alaska Pacific University.

But the Inspector General on March 30 said political pressure, rather than real or demonstrated need, was responsible for its approval. Former Secretary Andrew Cuomo and Senator Ted Stevens (R-Alaska) pushed for the project.

Under the guises of the Native American Housing Assistance and Self-Determination Act (NAHASDA), CIRI's housing authority in April 1998 submitted a proposal to build the dorm. Soon after, the Office of Native American Programs (ONAP) in July 1998 approved the project even though student dorms aren't considered "standard" activities under the act.

The classification wasn't necessarily a hindrance, though. In a letter, a HUD lawyer told former Deputy Assistant Secretary Saul Ramirez the project needed to be evaluated as a "model" activity under NAHASDA.

But ONAP officials said they didn't receive the letter until after they told CIRI's housing authority the dorm was approved. Nevertheless, ONAP waited until January 1999 to inform CIRI further review was needed by Cuomo or a delegate.

By this time, CIRI had spent almost $75,000 on the project and continued to spend more, seeking help from Cuomo in approving the project. In the spring of 1999, Cuomo met with the president of CIRI. Afterwards, he said he was behind the project completely.

Ramirez then approved the dorm as a "model" activity in May 1999 without addressing any of the concerns of a national review committee who questioned the cost, a proposed computer lab and library, its useful life, and the need.

The approval was followed by CIRI's conclusion that the two-year project would cost more than originally thought. Instead of costing between $3.2 million and $6.2 million, CIRI said it would need $9.2 million.

But HUD staff performed their own analysis and said it would cost only $2.3 million. Yet former Assistant Secretary of Public and Indian House Harold Lucas, improperly approved the larger amount, the audit found, after Senator Stevens reportedly directed HUD to ignore requirements for such a costly project.

Up until he left office, Ramirez continued to defend the project. In December, Ramirez responded to a draft of the audit and asked that it not be submitted.

"We conclude that all findings are wrong," wrote Ramirez.

The Inspector General's office eventually submitted the report to a Bush transition team member, who didn't respond to requests for comments or changes.

In total, CIRI expended $1.2 million in pre-development costs for the project. The project is currently on hold pending response from the Bush administration.

Get the Report:
HUD Approval of a Student Housing Project for Cook Inlet Housing Authority (No 2001-SE-107-0001 March 30, 2001)

Relevant Links:
Cook Inlet Regional Inc. -
Alaska Office of Native American Programs -
Office of Public and Indian Housing -