Liu Targets HPD Financial Shenanigans–UPDATE

City Comptroller John Liu is out today with a new audit that says that the city’s  Department of Housing Preservation and Development kept $9.8 million in unused funds from expired contracts that should have been returned to the City cofferes

“This money could have and should have been used to improve shelters, especially in light of rising homelessness,” Comptroller Liu said.  “If HPD can’t use it right then the money should be put back in the City treasury.”

The irony here of course, is that Mr. Liu has been dogged in recent days by accusations of financial impropriety himself. Earlier this year, The Times reported that Mr. Liu’s supporters were arranging phantom donations to his campaign. Last week, a chief fundraiser of his was arrested, and the man that Mr. Liu brought on to look into the improprieties, former attorney general Robert Abrahm, resigned.

Mr. Liu has remained defiant, even as federal investigators are looking into his campaign finance books. And although Mr. Liu seems determined to plow ahead with his 2013 mayoral plans, the conventional wisdom is that he will be lucky to keep ahold of his current seat.

And today’s audit–the first since the scandal picked up in earnest–shows how hard it will be for Mr. Liu going forward. Most of what the comptroller does involves tracking finances and releasing audits on waste, something that will be hard to take seriously going forward.

 

Update:

Eric Bederman, HPD spokesman, pushes back:

 

“HPD is spending the shelter reserve funds appropriately and will continue to do so. The Comptroller’s office originally approved the language of these contracts which stipulated that the reserve funds in question had to be maintained until the contracts with the shelter providers expired. HPD began spending the reserve funds immediately following the expiration of the contracts in order to continue to fund our Emergency Shelter System which provides emergency housing and support services to New Yorkers who have been displaced from their homes due to disasters. The current spending plan for these shelter reserve funds was voted on and approved by the City Council, of which Comptroller Liu was a member at the time.”

Liu Targets HPD Financial Shenanigans–UPDATE