The inspector general’s office for the U.S. Department of Housing and Urban Affairs released an investigative report Tuesday that found no evidence that HUD Secretary Ben Carson used his position to benefit his son’s business interests in Baltimore, but he “could have done more to avoid the appearance that he was not complying with federal ethics regulations.”
The investigation stems largely from a 2017 “listening tour” in the city by Carson, a former neurosurgeon at the Johns Hopkins Hospital in Baltimore.
The report said the inspector general’s office received “multiple complaints” that the HUD secretary allowed his son to invite companies and individuals to participate in the tour to advance his own financial interests. Ben Carson Jr. is chairman of a Columbia-based investment firm called Interprise Partners.
The investigation by the HUD watchdog specifically focuses on a stop on the tour in the Poppleton neighborhood, a hardscrabble part of West Baltimore that had been promised revitalization for decades.
HUD already had backed a $56 million loan for a massive redevelopment project in Poppleton called Center 1/41/4 West, the second-largest loan ever backed by the department in Baltimore.
Carson Jr. was not involved in the project, a luxury housing complex and other amenities near the University of Maryland professional schools. But Poppleton was on a list that a city housing official and Carson Jr. discussed as possible investment opportunities for Carson’s company.
The report said Carson Jr., at the direction of his father, invited several people or companies to join him on the two-day tour.
One was Seema Verma, administrator of the Centers for Medicare and Medicaid Services, based in Woodlawn. Three months after the Baltimore visit, the federal agency awarded a $485,000 contract to the Columbia-based consulting company Myriddian, where Carson Jr. was listed as a board member and his wife, Merlynn, was listed as CEO.
The HUD report found that the person responsible for that contract did not know of the relationship between Merlynn Carson and Ben Carson Sr.
The list of tour invitees from Carson Jr. also included representatives of La Cite, the New York developer of Center 1/41/4 West.
“A particular focus on this investigation stemmed from allegations Carson Jr. may have attempted to advance his business interests in connection with an event La Cite Development hosted on the second day of the listening tour at its Center 1/41/4 West development project,” the report said.
After the visit, the report said, HUD awarded a million-dollar grant for neighborhood improvement. The report, however, said investigators did not find Carson Sr. or Carson Jr. were involved in that decision.
It also found that Carson Jr. has had no financial interest in Poppleton projects, including Center 1/41/4 West or the neighboring public housing project Poe Homes, which was being considered at the time of the tour for a program that allows private developers to take over redevelopment.
Since the tour, The Baltimore Sun has reported that Center 1/41/4 West has been mired in years of delays that persist today and have left the city on the hook for millions of dollars in bonds it sold to support the project. Only two apartment buildings out of 30 proposed have been completed, and the first occupancy permits for only some of the units were issued within the past year.
The inspector general’s report noted that a city official was “disconcerted” about Poppleton’s inclusion because of the way HUD had gone about financing the project years before. The New York-based developer La Cite had sought a HUD-backed loan from HUD’s Baltimore field office in 2009 but the office would not approve it. La Cite ultimately got approval for the loan from the New York field office, which was unusual.
The HUD report did not appear to seek explanation of why the project was approved over the objections of Baltimore officials.
After an introduction by Carson Jr., HUD included the Center 1/41/4 West project as the last stop on the tour.
According to the report, HUD lawyers had expressed concerns about Carson Jr.’s involvement in the tour, reporting to inspectors that they feared he had a financial stake or wanted a stake in projects and that would give the appearance the secretary was using his position to benefit his son. They also feared the involvement could become public through a public records request, it said.
(The Sun had filed such a request for information specific to the Center 1/41/4 West project, but it was rejected by HUD officials after a year of consideration because it sought confidential business information.)
The report said the secretary was told of the lawyers’ concerns and had responded by saying that it would be hard to avoid involving his son in a Baltimore tour because he was “the largest employer in Baltimore.”
Carson Jr. put off some HUD officials, as well as city officials, by personally attending the tour, the report said.
A two-page memo written by a HUD lawyer about the concerns was published in 2018 by The Washington Post. The inspector general launched his investigation the same year.
HUD spokeswoman Caroline Vanvick did not return messages seeking reaction Tuesday afternoon. Carson Jr. also did not respond to a message seeking comment.
(Baltimore Sun reporter Jeff Barker contributed to this article.)
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