The housing authority's board of commissioners had been trying to force Lingner's resignation for weeks. In exchange for his quitting, and promising not to sue, they agreed to give Lingner three months' severance pay.
That's three months fewer than he demanded in a letter to the board just a few weeks ago. But Lingner was clearly wise to fold when he did.
That's because the truth is now coming out — the truth about operations at the housing authority, and the truth about Lingner.
It isn't good.
Indeed, at the very meeting in which the commissioners signed off on Lingner's severance agreement, they were treated to a report from Barbara Gallegos, the program center coordinator for the U.S. Department of Housing and Urban Development's field office in Phoenix. And after Gallegos' evisceration of his operation, Lingner was lucky the commissioners didn't come after him with pitchforks.
HUD's review of the housing authority — which was also triggered by my February cover story — isn't finished yet. Gallegos told the board she wanted to speak because of the magnitude of the problems her staff has already identified, including an overall lack of documentation, internal controls, and checks and balances. Employee evaluation has been nonexistent and disciplinary action inconsistent, she told the commissioners. There's no policy for use of the agency's vehicles or credit card.
And, as Gallegos' report made clear, my story was correct in identifying Lingner's credit card use as a problem. HUD policy says that meals should be paid for by the agency only if they're "tied to a specific training session or meeting where technical information is displayed." Yet Lingner had been treating himself to several meals each week on the housing authority's dime — averaging roughly $500 a month in dining expenses.
"Based on the receipts we're seeing, the receipts don't tell us that they're eligible," Gallegos said. "In many cases, there are no receipts."
Gallegos also pointed to numerous problems with the agency's contracts. Staffers seemed to believe that they didn't need to get three bids, so long as contracts were below $25,000. But Gallegos says that federal laws are far stricter: The housing authority should have obtained quotes from at least three vendors for any contract larger than $2,000.
And, in some cases, the agency seemed to be trying to get around even the $25,000 threshold.
"It appeared that contracts were arbitrarily divided into smaller amounts so as not to go over the $25,000 limit," Gallegos told the commissioners. In other cases, she said, HUD investigators simply couldn't find any documentation whatsoever.
In her presentation, Gallegos didn't identify specific contracts. But a lack of supporting documentation has led to the cancellation of an entire set of contracts, as I confirmed last week.
I reported in February that the housing authority had been awarded $6.2 million in federal stimulus funds via a county grant to buy and rehabilitate foreclosed homes. The housing authority had asked firms to submit their qualifications — for construction work, real estate brokerage, and appraisals — rather than make a bid for a specific job. Firms found to be qualified were then selected for work as it arose.
But there were some odd coincidences in the list of "qualified" firms: Almost all their owners had been donors to Lingner's campaigns during his tenure on the Phoenix city council. Another "qualified" firm operates out of the same North Phoenix office suite as Rick Cole, the longtime chairman of the housing authority's board of commissioners.
In a public records request, I asked to see any score sheets or other documents used by the evaluation panel. But Lingner refused to even tell me who served on the selection panel, saying the matter was under investigation. And though such documents are clearly public record under the law, my requests were ignored for two months.
It took a strongly worded letter from New Times' attorney to get to the truth last week: The agency can't find any such documents. It has no score sheets, no explanations of how firms were selected, no minutes from the panel that chose them. (I did get a list of three panelists, apparently from Lingner's memory.)
Ben Chao, director of the agency's Neighborhood Stabilization Program, tells me that the firms had already been selected by the time of his hiring last June.
Indeed, it appears Lingner inked the contracts just one week before Chao started work. Chao says he learned recently that no evaluation sheets or other documents exist. The agency also failed to save the shipping boxes that firms used to submit their qualifications.
In light of that, the housing authority canceled the contracts earlier this month, Chao says. For the remaining $2 million or so left on the grant, it's been soliciting new firms for work.
This time, instead of having a brief period for firms to submit their qualifications or miss out entirely, the housing authority will leave the process open.
"Whoever is interested, as long as they have a business license, they'll be included on every solicitation for bids," Chao says. Already, a half-dozen new firms have applied.
At their meeting last week, housing authority commissioners were clearly blindsided by the scope of problems identified by HUD.
Rick Cole has been chair of the housing authority ever since it was spun off from county government in 2004. He's recently come under scrutiny for his ties to the developers and contractors chosen for stimulus work during Lingner's tenure, and he announced to the board Tuesday that he won't be reapplying for his seat when his term expires in June.
He seemed shaken by the blistering report from HUD.
"We've been having all these audits," he pleaded to the commissioners. "They're telling us we're compliant." In a brief break during the four-hour meeting, he approached HUD's Gallegos to reiterate that point. (The housing authority's last audit from HUD's Office of Inspector General was in 2005, records show.)
But it surely wasn't just the report from HUD, or the cancellation of the stimulus contracts, that had the board in a sour mood last week.
In March, the housing authority hired Kate Baker, an attorney with Green & Baker, to look into the allegations in my story. Baker issued her report to the board on April 8.
Baker writes that she made a conscious decision to limit the scope of her review to allegations regarding nepotism.
That proved to be bad enough. Baker's report, which confirms the allegations in my February story, is devastating.
In her report, Baker identified four instances in Lingner's brief tenure where he was directly involved with the hiring of his relatives:
• Lingner hired his son, Brandon, and nephew Joshua Long to clear the agency's parking lot after a storm. At least one employee believed that Lingner didn't bother to get any other bids until after the work had already been done.
• Lingner hired his brother, Dwayne, to repair a carport at the agency's main offices on North Seventh Street.
• Dwayne Lingner was also hired to work on some awnings, even though he didn't have the necessary contractor's license.
• Lingner's son, Brandon, then 17, was hired as an unpaid intern last summer at Lingner's direction. Later, he was put on the payroll as a temporary employee at Lingner's behest.
Baker found Brandon Lingner's hire as a temp particularly problematic. To keep Brandon's employment off the books, Baker found, Lingner's staff schemed to have him hired through a temp agency, even though it cost the housing authority more money.
Indeed, in November 2009, Lingner informed his human resources director, Laura Schreiber, that Brandon should be hired. But Schreiber was concerned that, because he was Lingner's son, the agency's nepotism policy forbade the housing authority from hiring him as a "regular" employee.
Instead of shutting down the idea, however, Schreiber found a way to make it work. The agency sometimes hires temporary workers through Goodwill — why not have them hire Brandon, then assign him to the housing authority? Schreiber e-mailed Goodwill with the plan.
But that proved expensive. Brandon was paid $10 an hour, but Goodwill gets a markup for any employees it supplies, which apparently raised Brandon's cost to $14 an hour. On top of that, Brandon apparently earned overtime, even though that's unusual for agency employees. In some cases, raised his fee, with Goodwill's surcharge, to $21 an hour.
In his last week alone, Brandon Lingner reported working a staggering 36 hours of overtime, on top of his 40-hour workweek, Baker found. Brandon Lingner apparently logged the time while helping move furniture into his father's new office.
Ben Chao, the neighborhood stabilization director, refused to sign off on those hours, since he knew the work wasn't for his program. At that point, Baker writes, Doug Lingner signed for it personally.
The lack of adherence to proper procedure on Lingner's part is staggering — as were his excuses when Baker confronted him.
As Baker writes, Lingner repeatedly tried to blame his subordinates. He claimed that it was Chao who urged him to hire his son. ("This needs to happen," Lingner claims that Chao told him.) Lingner accused the agency's grant writer, Janet Belfield, of suggesting Lingner hire his brother "as a way to set Lingner up." Finally, Lingner claimed he signed his own son's time sheet inadvertently, "in a stack of other documents."
But his excuses make no sense, as Baker writes. Again and again, everyone else in the agency contradicted him, and she found the others more credible.
In his interview with Baker, Chao said he was uncomfortable with Brandon Lingner's volunteer job because so many people were asking questions about it. Chao was even more concerned by the paid position, to the point that he intervened with the county and ultimately got it stopped in January.
Meanwhile, the housing authority's human resources director, Schreiber, said that she took Brandon's time sheet directly, and pointedly, to Lingner. She knew it was unusual because Chao had refused to sign off on it.
Finally, the other person Lingner tried to blame, Belfield, was also uncomfortable with his nepotism, as several employees would attest. In fact, when Schreiber got an anonymous packet containing the agency's conflict-of-interest policy last September, she showed it to Lingner and warned him that it was probably from Belfield.
"In the investigator's reasonable judgment, Doug Lingner was not being completely truthful during his interview," Baker concludes. "Based upon the facts gathered from various witnesses which conflict with Lingner's version of events, the investigator found Lingner to lack credibility."
Baker's report is fascinating, and not just because of its level of damning detail. The sequence of events it describes is also noteworthy.
As Baker makes clear, it's only after Schreiber warned Lingner about the anonymous packet that he arranged for his son's "temp" position. He knew people were talking, yet pushed the hire anyway.
Lingner himself admitted to Baker that the New Times story was "devastating" and something the housing authority should be concerned about. But it's clear from Baker's summary that Lingner never takes responsibility for a single problem that anyone has identified with his management.
He'd rather blame Chao, blame Schreiber, blame Belfield, and blame the media. That's easier than admitting his tenure was disastrous for the housing authority — and easier than admitting he completely screwed up.
