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 Posted - 04/18/2008 : 08:03:25 AM
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Bush Announces HUD Pick
By THE ASSOCIATED PRESS
Published: April 18, 2008
Filed at 10:15 a.m. ET
WASHINGTON (AP) --President Bush has chosen SBA Administrator Steve Preston to take over as head of the government's housing agency at a time of crisis in the industry, the White House announced on Friday.
If confirmed by the Senate, Preston would replace HUD Secretary Alphonso Jackson, who announced his resignation last month amid allegations of political favoritism and a criminal investigation. Jackson's last day on the job is to be Friday.
Bush was to announce Preston's nomination at midday before going to Camp David.
Jackson leaves behind the wreckage of a national housing crisis and a trail of unanswered questions about whether he tilted the Housing and Urban Development Department toward Republican contractors and cronies.
Preston will take over the agency at a time of chaos in the housing market. Foreclosures have surged to record highs as rising interest rates and the collapse of the once high-flying housing market have made it impossible for some to afford their monthly mortgage payments or sell their homes.
The administration has taken some steps to provide relief to millions of people at risk of losing their homes. However, Democrats on Capitol Hill insist more needs to be done and have been moving ahead on additional rescue plans.
A poll released on Monday said one in seven mortgage holders worry they may soon fail to make their monthly payments, and even more fret that their home's value is shrinking. The Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won't a buy a home in the next two years. That was up from 53 percent who said so in an AP-AOL poll in September 2006. Only 11 percent are certain or very likely to buy soon, down from 15 percent two years ago.
Preston was sworn in as head of the Small Business Administration in July 2006, after his nomination was unanimously confirmed by the Senate. Bush was expected to praise him as an effective manager and problem-solver who can take on complex challenges, officials said. Preston's selection was first reported by National Journal's CongressDaily.
Preston has a background of 25 years in financial and operational leadership positions. Before joining SBA, he was executive vice president of The ServiceMaster Co., where he also served as chief financial officer. Before that, he was a senior vice president and treasurer of First Data Corp. and an investment banker at Lehman Brothers.
The FBI is examining the ties between Jackson and a friend who was paid $392,000 by Jackson's department as a construction manager in New Orleans. Jackson's friend got the job after Jackson asked a staff member to pass along his name to the Housing Authority of New Orleans.
In another instance of alleged favoritism that came to light in February, the Philadelphia housing authority alleges that Jackson retaliated against the agency because it refused to award a vacant lot worth $2 million to soul music producer-turned-community developer Kenny Gamble for redevelopment of a public housing complex. U.S. District Judge Paul S. Diamond ruled on March 31 in Philadelphia that HUD acted legally and did not retaliate against the housing authority.
Jackson's problems began in 2006, when he told a group of commercial real estate executives that he had revoked a contract because the applicant who thanked him said he did not like Bush. Jackson later told investigators ''I lied'' when he made the remark about taking back the contract.
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