Snyder appointee got paid on housing contract

Chad Livengood
Detroit News Lansing Bureau

Lansing — A real estate company owned by the former executive director of the Michigan State Housing Development Authority continued to get paid on a $1 million housing redevelopment contract under his watch, a state official confirmed Thursday.

MSHDA spokeswoman Katie Bach said there was a "fire wall" built between former director Scott Woosley and the contract his firm, Labor-Management Fund Advisors, was awarded in January 2010 — "long before" he was hired in November 2012 to run the state agency.

Woosley is the former MSHDA executive director who abruptly resigned last month following revelations of lavish travel expenses that totaled at least $100,000 in less than two years on the job.

An appointee of Gov. Rick Snyder, Woosley previously told The Detroit News he continued to share in the profits of his Troy-based real estate development consulting firm 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 mutually 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.

On Thursday, Michigan Democratic Party chairman Lon Johnson questioned the ethical nature of Woosley's continued ownership of the company while it finished a nine-unit housing redevelopment project in Detroit.

State records show the firm was paid about $1.04 million, with payment of $15,519 continuing into the first quarter of 2013, five months after Woosley took over running the housing agency.

When Woosley was hired, the agency's internal ethics committee "built in several protections, such as creating a fire wall so Mr. Woosley could not access or approve payments on the contract and was excluded from all decisions related to it," Bach said.

"The bottom line is Mr. Woosley had no input, involvement or oversight over this contract," Bach said in an email to The News. "It's clear that detailed action was taken to ensure no conflict of interest."

Woosley did not return phone messages from The News Thursday seeking comment.

Johnson said Woosley's dual roles as head of a state agency charged with administering a U.S. Housing and Urban Development contract with his company "is a classic case of the fox watching the hen house."

Democrats sent a letter to HUD's inspector general on Thursday asking him to investigate.

"Gov. Snyder believes there are one set of rules for him and his cronies and another set of rules for everyone else," Johnson told reporters.

Using the state's Freedom of Information Act, the state Democratic Party unearthed the global travel records — including two $10,000 first-class flights to Beijing and the Middle East to woo foreign investors to Michigan — that led to Woosley's resignation.

Snyder spokeswoman Sara Wurfel said late Thursday the Democrats were leveling "more baseless allegations to distract from the real issues and the real story of Michigan's comeback."

Wurfel added that "Mr. Woosley is no longer a party of the administration."

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