Could San Antonio's Alleged Misuse of Fed Funds Supernova Castro's Rising Star?

A Housing and Urban Development (HUD) IG report claims Mayor Julian Castro’s San Antonio may have misused $1.1 million in federal neighborhood stabilization funds. The 2012 HUD report came to light just over twenty-four hours after it was reported that President Obama is considering appointing Castro to head that very agency.

Castro’s political career, considered by many to be a rising star in the Democrat Party, may be about to supernova as the news of the apparent misuse of federal funds comes during the time Castro served as mayor of San Antonio. According to a report in Politico yesterday, the HUD IG studied how $8.6 million in Neighborhood Stabilization Program funds was being spent in San Antonio from 2009 to 2011, the first two years of Castro’s mayoral administration. The purpose of the funds was to help the city buy up and refurbish or resell homes that were left vacant after foreclosure evictions. Additionally, the city was to renovate apartment complexes for rental to lower-income families.

The news of Castro’s appointment being considered by President Obama may be very short lived after this revelation that under his watch as Mayor, his city misspent funds from the very agency he is being tapped to lead. This news could not have come at a worse time for Castro or President Obama.

The HUD IG report claims $1.1 million of the stabilization funds was misused by the city because the renovations of some of the properties were not put toward low-income housing as required by HUD regulations. The IG report alleges the city failed to take certain steps to review contracts with developers. It further claims, according to Politico, the city officials were unaware of the low-income affordability requirement.

The 2012 report from HUD does not mention Julian Castro by name. HUD failures are not the only failures in the San Antonio area. As reported by Breitbart Texas, the San Antonio Independent School District recently rejected Mayor Castro’s Pre-K education program. This article, by Breitbart Texas's Merrill Hope also describes how the school district is also under close scrutiny for his financial dealings. The HUD IG report also claims the city “also paid more than $2.5 million for renovation contracts that it could not show were competitively procured or reasonably priced.” Furthermore, the HUD IG report also claims, “The City entered into contracts totaling more than $5 3 million with the developers of three multiple-unit housing developments. It reviewed support for $2.5 million in construction costs for one of the three properties. However, it did not take steps to monitor the remaining $2.5 million in renovation contracts at the other two housing developments.” Politico failed to mention these more expensive oversights.

Some have questioned Mayor Castro’s actual level of experience. Castro is mayor of a city government which is established as a weak-mayor form of government. In other words, the executive power in the city rests with a city manager who is appointed and hired by the City Council. As a point of illustration, the letter from the City of San Antonio to the HUD IG responding to the IG’s report is signed by the city’s director of the Office of Management and Budget. The city’s letter is copied to the City Manager, Assistant City Manager and the City’s Grants Administrator. The Office of the Mayor was not included in the distribution list. A copy of this letter is included in the 2012 report linked above.

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