Feds probe complaint against ex-Michigan housing chief
Lansing — Federal authorities are investigating a conflict of interest complaint Michigan Democrats filed over a real estate company continuing to get paid by the state housing authority while one of its owners served as Gov. Rick Snyder's agency director.
Michigan State Housing Development Authority spokeswoman Katie Bach confirmed Sunday that the U.S. Department of Housing and Urban Development's inspector general has launched an investigation into the complaint against former Executive Director Scott Woosley.
"I can neither characterize the investigation nor comment (further) until the process is complete," Bach said in an email to The Detroit News.
Woosley abruptly resigned in early August after the Michigan Democratic Party exposed documents showing he was racking up lavish travel expenses that totaled at least $100,000 in less than two years on the job.
Bach said MSHDA officials recently met with federal investigators from HUD's Office of Inspector General over the Democrats' complaint.
Woosley previously told The News he continued to share in the profits of his Troy-based company, Labor-Management Fund Advisors, while collecting a $135,000-a-year paycheck. Gubernatorial appointees typically sever financial ties with their businesses to work in state government to avoid any appearance of impropriety.
A day before agreeing with Snyder to step down, Woosley told The News that his firm had no business with the state. "Most of our activities are in other areas of the country," Woosley said in an Aug. 7 interview.
But state records indicate the firm was paid $15,519 on a $1 million nine-unit housing redevelopment project in the first quarter of 2013, five months after Woosley took over running the housing agency.
Snyder administration officials have said a "fire wall" was erected to block Woosley from making any decisions on his firm's contract, including payments.
The Democratic Party requested the federal probe on Sept. 18.
"The fact that Snyder's administration is now under federal investigation for conflicts of interest and massive travel expense abuses at their housing authority speaks volumes about the way he is running state government," Lon Johnson, chairman of the Michigan Democratic Party, said Sunday in a statement.
Snyder spokeswoman Sara Wurfel said late Sunday the administration welcomes "the review."
"As we've shared before, numerous steps were taken to ensure no conflict of interest," Wurfel said in an email.
Woosley could not be reached Sunday night for comment.
In September, Wurfel emphasized Woosley was no longer part of the administration and called the Democrats' pursuit of a federal probe "more baseless allegations to distract from the real issues and the real story of Michigan's comeback."
Woosley's reimbursed expenses included $10,000 first-class flights to the Middle East and Beijing to woo foreign investors to Michigan, $500-a-night hotel rooms, expensive meals including such delicacies as foie gras and escargot, and more than $23,000 in travel on state-owned planes.
State records show some of Woosley expenses weren't approved for reimbursement, including bar tabs for alcohol and a $180 massage at the Ritz Carlton in Riyadh, Saudi Arabia. Woosley has denied trying to get the state agency to reimburse him for a back rub.
Before resigning, Woosley had asked the state Treasury Department to review his travel expenses "to determine if there was anything at all that was inadvertently reimbursed."