Criminal investigation appears unlikely in Taylor Housing Authority debacle

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TAYLOR, Texas (KXAN) – A criminal investigation of alleged wrongdoing outlined in a 2014 federal audit of the Taylor Housing Authority appears unlikely, according to records obtained by KXAN.

Taylor Mayor Jesse Ancira said he asked various law enforcement officials in April to consider looking into issues noted in the U.S. Department of Housing and Urban Development audit. But none appear interested.

In Williamson County District Court, THA has sued its own former executive director Steve A. Shorts and several directors of local two nonprofits. THA alleges Shorts inappropriately severed THA’s control of the nonprofits and, subsequently, three low-income apartment complexes valued at more than $2 million.

THA is attempting to regain control of the nonprofits and, by extension, the apartment complexes. According to the HUD audit, THA may have paid $243,442 in “unsupported” salaries and may have to repay that amount to HUD.

THA Board Minutes                            HUD Audit of THA

Attorneys defending Shorts and others associated with the nonprofits told KXAN there has been no criminal wrongdoing, the management of both nonprofits are doing a good job of operating the low-income apartments and THA’s case against them is weak.

“Any allegations of improper conduct made against our clients, especially allegations of any criminal conduct, are likewise demonstrably false,” TJ Turner, a defense attorney, said in a prepared statement.

The defense also noted THA has pared down the allegations it originally made against their clients. In an amended petition, THA dropped the two nonprofits-Taylor Sunset Housing Development and Mallard Run Housing Development-from the lawsuits.

“In February, THA dropped all of its allegations and claims in the suit against Steve Shorts, Mallard Run, and Taylor Sunset concerning the properties. We think this speaks volumes about the veracity of those allegations contained in their previous filings,” the defense said in its statement. “Steve Shorts had full approval of the Taylor Housing Authority board of directors for every action he took with regard to the properties at issue, all of which were legal.”

In addition, the defense got an injunction stopping THA from interfering with the two nonprofits’ activities. THA is appealing that injunction.

Shorts is still included in the plaintiffs second amended petition. THA alleges Shorts made inappropriate Section 8 and “HOME” program payments to his son and a Section 8 housing director at the time, according to the suit.Contacting law enforcement

In an email obtained by KXAN through the Texas Public Information Act, Mayor Ancira contacted Texas Department of Public Safety Director Steve McCraw about the THA’s ongoing “situation” and allegations outlined in the HUD audit. McCraw, in turn, said he would contact the FBI.

Ancira said the FBI is not pursuing a criminal investigation at this time. In addition to DPS, Ancira also said he called the Williamson County District Attorney’s Office, the Williamson County Attorney’s Office and a lead HUD auditor about the issue.

None of those agencies appear likely to conduct a criminal investigation.

THA is a government entity separate from the city. Ancira said that the mayor appoints THA board members, but the city’s authority over THA ends there.

“I think I contacted just about everybody I can think of to get some attention to this matter,” Ancira said. “But as the county and district attorney’s office put it, first because the transaction initially happened in ’08, the statute of limitations have effectively run for misdemeanors and most likely felonies.”

“I think I contacted just about everybody I can think of to get some attention to this matter.” – Taylor Mayor, Jesse Ancira

Mark Dietz, an attorney representing THA, said he did not know Ancira contacted law enforcement, and he could not comment on it.

Dietz said the civil lawsuits have been given to the Texas Attorney General’s Office, which could take over the case. The AG’s office could also simply monitor the lawsuit, he added.

The THA has pared down its allegations, since it first filed suit against the nonprofits, Shorts and several nonprofit directors, including Edmond Komandosky, Betty Hargrove, Doris Corley, Janice Lanning and Kevin Hargrove.

Now, THA has centered its case on allegations Shorts violated the Public Facility Corporations Act. Under the Facility Act, THA is a sponsor of the nonprofits, and the nonprofits’ boards of directors must include three individuals from the sponsor’s governing body, according to THA’s petition for writ of mandamus.

The Facility Act barred Shorts from altering the governing structure of the nonprofits to exclude THA’s board members, Dietz said.

“What happened in 2008 is that there were actions taken that were not following the Facility Act,” Dietz said. “In doing so, the two nonprofits-Taylor Sunset and Mallard Run-became adrift of the law and have been so since.”

THA’s oversight of the nonprofits and the apartment complexes was severed in 2008, the HUD audit states. The defense said that change saved THA thousands of dollars per month that would be lost otherwise, due to a change in certain HUD fees.

From 2008 to 2013, KXAN could find no public record of issues associated with the nonprofits or apartment complexes in question.

KXAN asked Dietz why, for roughly five years, there is no record of THA officials raising concerns about the changes allegedly made by Shorts in 2008 and the loss of THA’s control of the nonprofits and apartment complexes.

“If you look at the HUD audit, it is apparent that Shorts was in control of all three entities,” Dietz answered. “Now, whether or not THA board should have realized the problems associated with it prior to that time, prior to 2013, I can’t comment on.”

Dietz said there is no documentation indicating THA paid an attorney that year, during the time of the change in nonprofit leadership. Shorts also testified in court that he worked on the legal documents himself, Dietz said.

Hejl declined to comment on the record.Local resident calls for investigation

Seeking a renewed investigation into the matter, outspoken Taylor citizen and critic of the THA situation, Tom Mowdy, filed a criminal complaint of his own with the Taylor Police Department. He posted the complaint on his website, which he has also used as a platform to blast city leadership over the THA situation.

Mowdy said he disagrees with Ancira’s point that the THA is a separate entity from the city. Mowdy, among others in Taylor, also expressed a desire for an outside investigation into the THA matter.

Ancira said an independent investigation prompted or paid for by the city may not be possible.

The city might not be allowed to spend public funds to investigate a separate entity like THA, Ancira said, and several law enforcement agencies with jurisdiction have not expressed interest in pursing the matter.

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