(3) War between HUD's IG Susan Gaffney and Boss Cuomo
Updated June 2001

HUD Secretary Andrew M. Cuomo Punishes Inspector General
Charges of Pornography, Racism, and Harassment Abound

(1)  HUD Fraud by Black Mayors?           Perhaps one of the most controversial skirmishes between Cuomo and his Inspector General occurred in 1998.  Cuomo ordered IG Susan Gaffney to investigate fraudulent use of HUD funds only in cities which had black mayors.            It is possible that Cuomo deliberately set Gaffney up for charges of racism.  When news was leaked that only cities with black mayors had been selected for investigation, Cuomo publicly and loudly denied that he had authorized such an obviously racist endeavor.  Gaffney took the political heat, and Cuomo claimed he was innocent.

HUD Secretary Andrew Cuomo

          The Department of Housing and Urban Development has repeatedly been investigated by Gaffney's Inspector General office for lax management, poor accounting controls, and corruption and racism in its distribution of public housing funds.  That is the job description for Inspectors General.

(2)   Escalating Conflict:

          Now, Cuomo’s office has escalated the conflict by allegedly harassing Gaffney. Cuomo is also accused of fabricating and distributing negative information about Gaffney in order to discredit her.

          Among other things, Gaffney alleges she has been subjected to verbal abuse from Cuomo delivered via weekend telephone calls in which he berated her performance.  This is an odd tactic for the Secretary of a Cabinet-level agency to take since the Inspector General's office is legally chartered to operate completely independently of the head of the agency.  In other words, Cuomo has no authority over his inspector general.  And that, according to Gaffney, has always been the major bone of contention between Cuomo and herself.  Cuomo hasn't been able to accept that Gaffney is not subject to his authority.

          Additionally, Gaffney has charged that Cuomo and his minions deliberately planted uncomplimentary information about her with the news media.

(3)   Cuomo Returns Fire

          Boss Cuomo’s spokesperson, Lisa MacSpadden, was quick to refute IG Gaffney’s allegations: "[IG Susan Gaffney] had previously threatened to retaliate if [Cuomo] investigated her staff's use of pornography," said MacSpadden. "This is nothing more than a diversion from her misconduct regarding the downloading of pornography in her office and retaliation for our efforts to get to the bottom of it."

          Democratic Congressman Thomas Paul Lantos (D-Calif.) has taken Cuomo’s side in the dispute. Cuomo spokesperson MacSpadden claims that it was Rep. Lantos who ordered Cuomo to obtain information about the IG staff’s use of office computers to download pornography.

          So far, Cuomo has managed to get several of Gaffney’s staff suspended in the pornography investigation.

          Gaffney has exchanged several angry memos with HUD Deputy Secretary Saul N. Ramirez, Jr. in which she accused Boss Cuomo of deliberately leaking wildly inaccurate statements to the media about the investigation.   Gaffney has further enraged Boss Cuomo and his minions by refusing to provide confidential, protected, privileged information about her probes into HUD corruption to Boss Cuomo and his staff.

(4)  Sources and Background Stories:

(5)  ENDGAME:  HUD Cuomo Critic Gaffney Forced to Retire over Trumped Up Discrimination Charge (05/06/01)

[Washington Post 05/06/01] Inspector General At HUD to Retire; Gaffney Says Racism Allegations Hurt

          Washington Post:  "Susan Gaffney, inspector general at the Department of Housing and Urban Development, will retire next month, just weeks after the government reached a $490,000 settlement with a black employee who had accused her of racial discrimination in passing him over for a promotion."  According to the Washington Post, the black employee, Mr. Philip Newsome, will receive $300,000 of that amount in compensatory damages and his attorneys will receive the balance of $190,000.

          Washington Post:  "The settlement gives [black HUD employee] Philip X. Newsome ... the freedom to teach at a Maryland university while still drawing his government salary, his attorneys said."

          Susan Gaffney is (was) the Inspector General for HUD, and her statutory responsibility was to ferret out corruption and mismanagement at HUD, which she did with a vengeance.  She was appointed by Bill Clinton in 1993, and she has waged a 4-year war against the corrupt, racist, favoritist practices of her former boss, HUD secretary Andrew M. Cuomo.  Cuomo, who at this writing is preening himself as a liberal candidate for Governor of the State of New York, did NOT appreciate Gaffney's uncovering his allegedly corrupt and racially-favoritist practices. 

          Regarding Ms. Gaffney's retirement from government service, the Washington Post reports "The charges of racism, Gaffney said last week, are what "hurt" the most, whether they came from black employees or Cuomo.  She had testified in 1998 that Cuomo and his aides tried to smear her as a racist. Cuomo's accusations against her grew only more pronounced as Gaffney produced management audits critical of [HUD]."

          [Readers are asked to recall the earlier reports that Cuomo had directed IG Susan Gaffney to investigate fraudulent use of HUD funds only in cities which had black mayors.  When the predictable cries of "racism" were raised about the investigation, Cuomo reportedly back-pedaled and denied that he had directed Gaffney to conduct any such "racist" investigation.   That has all the earmarks of a deliberate set-up wherein Cuomo engineered a "bad press" situation for the embattled IG, Susan Gaffney.]

          A federal judge had issued a temporary restraining order prohibiting Susan Gaffney from re-assigning the allegedly under-performing black employee, Mr. Newsome, to a non-investigative position under a lower-ranking employee.  Newsome had applied for the job of deputy inspector general for investigations at HUD in 1997, but Gaffney gave the job to a white man whom she felt was more qualified.  [Note:  The judge who issued the restraining order, U.S. District Judge Royce C. Lamberth, was appointed to the federal bench by President Ronald Reagan on the recommendation of Attorney General Edwin Meese.  In March, 2002 Judge Lamberth also issued a controversial opinion that the U.S. Army's use of racial-preferences in Army promotions was unconstitutional.]

          According to the Washington Post Ms. Gaffney contended throughout the case that [black employee] Newsome was in league with Cuomo and that this was yet another effort by Cuomo to get her.  Ms. Gaffney said last week that the settlement [reportedly $300,000 to Newsome and $190,000 to his attorneys] has allowed her to resolve a difficult situation, with black employee Philip Newsome now working elsewhere. The Post quotes Gaffney: "It is a win-win," she said. "Hopefully, he's happy in what he's doing."

          Washington Post:  "[George W. Bush's new] Housing Secretary Mel R. Martinez had no comment on the settlement, as the case predated his arrival.  He said Gaffney's decision to retire was hers alone (only the president can force an inspector general to resign).  Ms. Gaffney informed HUD Secretary Martinez of her resignation on Monday, and on Wednesday she e-mailed the news to 700 IG employees around the country.

          Washington Post:  "...Sen. Christopher S. Bond (R-Mo.) said Gaffney has earned the right to retire. He praised her efforts to crack down on fraud at the Federal Housing Administration, in the Puerto Rico Housing Authority and in two Cuomo programs that helped teachers and police officers buy homes, which Martinez recently suspended.  He also decried "Andy Cuomo's relentless personal vendetta against Susan Gaffney."  When Gaffney, who is 57 and has 22 years of government service, wanted to retire in 1998, [Sen. Christopher] Bond persuaded her to stay, saying that to leave would amount to "vindication" for Cuomo.  "I will miss her courage and her willingness to take on the powers that be whenever they are clearly wrong," he said.

          The Washington Post reports that black HUD employee Philip Newsome joined the inspector general's office in 1995, 2 years after President Bill Clinton appointed Susan Gaffney as Inspector General. 

          Given the racial overtones with which former HUD Secretary Andrew Cuomo has apparently infused this conflict (specifically, Cuomo's allegedly directing Gaffney to investigate only cities with black mayors) one might also logically question the circumstances surrounding the hiring of black HUD employee Mr. Newsome in 1995. 

          Mr. Philip Newsome reportedly occupied the highest ranking position within HUD of any black person ever (according to sources) at that time.  One Adversity.Net source maintains that Newsome was very well-qualified, with over 20 years of experience as a criminal investigator, with a strong background in law enforcement (earned at the IRS).  BUT, Adversity.Net believes that HUD Secretary Andrew Cuomo's vindictive "racial sting" against Gaffney calls into question whether or not the highly-placed HUD employee Mr. Philip Newsome had achieved his position within HUD without any regard to his skin color.

          In 1997 Inspector General Susan Gaffney found it necessary to limit Mr. Newsome's authority.   She required that Philip Newsome's subordinates report to his bosses instead of to him (known as "going over your head") apparently because Ms. Gaffney felt that Mr. Newsome could not be trusted to manage his subordinates properly.  But black employee Philip Newsome, unhappy with Ms. Gaffney's lack of confidence in him, apparently played the race card.  He charged Gaffney with racial discrimination -- such a charge is almost always a "sure win" in today's politically-correct climate which assumes that white managers are always guilty of racial discrimination against persons of color.   Mr. Newsome filed his complaint in December 1997, and he maintains that subsequently Susan Gaffney began retaliating against him. 

          Adversity.Net's sources indicate that Susan Gaffney was only guilty of exercising her management prerogative by limiting the damage of an incompetent manager (Mr. Philip Newsome).

          Washington Post:  "Beyond the Newsome case, reformers say Gaffney's efforts to expose HUD's management flaws are laudable. In 1994, HUD became the only federal agency to earn a "high risk" management designation by the General Accounting Office.   In 1999, when the GAO issued an audit detailing HUD's weaknesses, Cuomo responded with a 76-page rebuttal that was twice as long as the report."

          Washington Post:  "Susan [Gaffney] had a very difficult tenure at HUD in recent years because of the conflicts with Secretary Cuomo," said Paul Light, a Brookings Institution government scholar. "She's a terrific IG and she had a very difficult time there."

          By 1998 Gaffney had been at odds with the politically ambitious Andrew Cuomo for several years.  In an obvious set up, in 1998 Cuomo ordered Gaffney to examine fraud in the housing departments in San Francisco, Baltimore and New Orleans -- each of these cities just happened to have a black mayor.  Subsequently, and predictably, the racial special interests, including the NAACP -- as well as Cuomo himself -- were quick to level charges of "anti-minority racial witch hunting" against Susan Gaffney, in spite of the fact that her Inspector General's office DID find incontrovertible evidence of massive corruption in the HUD programs in each of these three cities (San Francisco, Baltimore, and New Orleans).

          [Footnote:  Adversity.Net has documented dozens of cases of corruption and influence peddling in so-called "race-sensitive" government programs.  Therefore, it is no surprise that San Francisco, Baltimore, and New Orleans black leadership were found to be engaged in corruption and racial-favoritism in disbursing HUD funds. -- Editor]

          Washington Post:  "Although one Republican adviser urged the Bush housing transition team to nudge out Gaffney and start with "a clean slate," others say the expectation was that Gaffney would stay on.  [George W. Bush's new Housing Secretary Mel R. Martinez] liked Gaffney.  In a private meeting shortly after [Bush nominee Martinez took over HUD] she [Gaffney, reportedly] broke down and cried about how Cuomo had treated her, according to the GOP adviser."

          Washington Post:  "Gaffney has no plans for her future. She says she is relieved that the department is in good hands under new management. Now, she says, she has outlasted Cuomo and she can rest."

          [FINAL NOTE:  The Washington Post, in it's May 6, 2001 story, as cited above, repeatedly refers to Mr. Philip Newsome as "Philip X. Newsome".  Sources have reported to Adversity.Net that Mr. Newsome does NOT have a middle initial, and that the middle initial "X" was a derogatory moniker applied to Mr. Newsome by his foes within HUD.  According to Adversity.Net's sources, adding the "X" to Mr. Newsome's name was an effort by his enemies within HUD to associate him with the Nation of Islam, for example "Malcolm X".  For the record, therefore, Mr. Newsome's name is simply "Philip Newsome".]

(Based in part on the Washington Post story, page A04, Sun., May 6, 2001, by Ellen Nakashima.  Also based in part on Adversity.Net sources.)

[Last known link to the Washington Post story:
http://www.washingtonpost.com/wp-dyn/articles/A49366-2001May5.html]

END (3) Susan Gaffney v. Andrew Cuomo

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