1997Investigative Reporting

How a wealthy tribe got federal aid it didn't need

By: 
Eric Nadler, Deborah Nelson
and Alex Tizon
December 4, 1996
Index | DAY 1 | DAY 2 | DAY 3 | DAY 4 | DAY 5

Leon Jacobs

Leon Jacobs, regional administrator of HUD's Office of Native American Programs in Chicago.


Day Four:
Wednesday, December 4, 1996

Federal aid for the wealthy

The largest tribe has the greatest need

How a wealthy tribe got federal aid it didn't need

HUD missed signs of waste, then gave the tribe more money

August 1991: The U.S. Department of Housing and Urban Development awards the Mashantucket Pequot housing authority a $1.4 million grant to build 15 houses under a program for low-income Native Americans.

February 1992: The Foxwoods Resort Casino opens and quickly becomes a huge success for the tribe's members, who share in its profits.

June 1993: HUD increases the grant by $100,000 to cover some site work.

February 1994: The tribe, by now wealthy with casino proceeds, has not submitted basic documentation required before HUD releases the money. At this point, HUD has an opportunity to cancel the grant but doesn't.

June 1994: Paperwork authorizing the tribe to begin spending the money is signed by Leon Jacobs, regional administrator of HUD's Office of Native American Programs in Chicago.

September 1994: An audit of the housing authority for the year ending this month notes that most development records - including those verifying homebuyers' income - can't be found.

October 1994: Jacobs leaves HUD to join the Pequot management team. He starts as housing-authority director, then moves to tribal manager several months later.

November 1994: The housing authority withdraws its total allotment of $1.5 million from the U.S. Treasury. The project is 95 percent complete and the tribe hasn't needed a cent of HUD money to build it. Jacobs said the Pequots considered declining the grant but decided to keep it after learning it would go back to the government rather than to a needier tribe.