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Rubio: Global Ministries Foundation Is Stealing Taxpayer Money In More States Than Just Florida

May 18, 2016 | Press Releases

Washington, D.C. – In a Senate floor speech today, U.S. Senator Marco Rubio (R-FL) discussed the ongoing problems at the Eureka Garden federal housing complex in Jacksonville, Florida, and highlighted the many problems associated with other Global Ministries Foundation (GMF) properties around the country. He called on his colleagues to look into GMF operations in their own states and to consider his legislation that will reform the U.S. Department of Housing and Urban Development’s (HUD) oversight of housing projects.

“These are the conditions in Eureka Garden, and we got involved last October to get those remedied,” said Rubio. “So there was a thinking, ‘Well, maybe this is just one property. Maybe Global Ministries only has one property that’s run this way, but generally they are a good actor.’

“Well, here’s what we found. They have two properties, Warren and Tulane apartments in Memphis, Tennessee, that have such poor living conditions as well, that HUD pulled their federal funding from the housing,” Rubio continued.

“In Atlanta, we found that their Forest Cove property has been plagued by rodents and sewage. Here’s what news crews reported about their property in Atlanta. It said, ‘Building, siding and ceiling tiles were peeling from many of the buildings. Garbage and stagnant green water were feet from playing children.’ At the Forest Cove, here is what tenants said to news reporters. He said, ‘I’m homeless right now. I have moved out to be homeless.’ In essence, the conditions were so bad, the guy moved out of the property. In other words, they would rather be homeless than live in a Global Ministries Foundation property,” Rubio added.

“So here we have two properties in Memphis, Tennessee, we have a property in Atlanta, then there is another property in Jacksonville that they own. It’s called the Washington Heights property. It’s also been noted for violation, and HUD’s most recent review resulted in the property barely passing federal inspections,” Rubio concluded.

A transcript of Rubio’s full remarks is available below. A video is available here, and a broadcast quality video is available for download here.

U.S. Senator Marco Rubio
Senate Floor Speech
May 18, 2016
https://youtu.be/3yqLbTX_sMw

Senator Marco Rubio: “I want to talk about the housing issues contained here in the bill that we’re debating, and I want to talk specifically about a project in Florida that we became aware of back in October. Its name is Eureka Garden. It is a low-income, affordable housing project that uses Section 8 funds to house people of lower income, as you’re all aware of that program. 

“It’s run by an organization that owns it. It’s called Global Ministries Foundation. It’s run by Reverend Richard Hamlet. It’s organized as a 501(c)(3), the organization that owns this building. And Mr. Hamlet, as I’ve said, Reverend Hamlet, is the head of the organization.

“You look at their website for Global Ministries, there is a link that says ‘What We Do.’ And if you go on that section of Global Ministries, here’s what it says that they do. It says, ‘Providing affordable housing across the United States and ministering to the physical, spiritual and emotional needs of our residents.’ That’s what they state as their business purpose, and I imagine, that’s what they needed to state because of their 501(c)(3) not-for-profit status.

“However, we have a quote here from Reverend Hamlet, who has said that his involvement in housing is purely business related. He said, ‘This is a business. This isn’t a church mission. These are business corporations that we set up, but we’re no different from a real estate investment trust or a private equity group.’

“That’s how he described his 501(c)(3) not-for-profit Global Ministries Foundation. Now Global Ministries Foundation has over 40 properties in multiple states, in Alabama, in Florida, in Indiana, in Louisiana, North Carolina, New York, Tennessee, and Georgia. In all of these states and all of these properties, they have over 5,000 units that qualify as assisted. In 19 locations across Florida, they have over 2,000 assisted units. This particular project in Jacksonville, Florida, Eureka Garden, has 396 assisted units.

“Now, here’s the problem that we found with some of these properties. For example, in Eureka Garden, in the last year, property was found to be in horrifying condition. I have spoken about it on the floor before. I’m talking about people living in a place where there was mold on the walls, where the appliances were 15 years old, where the apartments hadn’t been painted in 13 years, where windows didn’t open, where staircases were literally falling down, where the city had to come in and evacuate people and condemn the property.

“These are the conditions in Eureka Garden, and we got involved last October to get those remedied. So there was a thinking, ‘Well, maybe this is just one property. Maybe Global Ministries only has one property that’s run this way, but generally they are a good actor.’

“Well, here’s what we found. They have two properties, Warren and Tulane apartments in Memphis, Tennessee, that have such poor living conditions as well, that HUD pulled their federal funding from the housing.

“In Atlanta, we found that their Forest Cove property has been plagued by rodents and sewage. Here’s what news crews reported about their property in Atlanta. It said, ‘Building, siding and ceiling tiles were peeling from many of the buildings. Garbage and stagnant green water were feet from playing children.’ At the Forest Cove, here is what tenants said to news reporters. He said, ‘I’m homeless right now. I have moved out to be homeless.’ In essence, the conditions were so bad, the guy moved out of the property. In other words, they would rather be homeless than live in a Global Ministries Foundation property.

“So here we have two properties in Memphis, Tennessee, we have a property in Atlanta, then there is another property in Jacksonville that they own. It’s called the Washington Heights property. It’s also been noted for violation, and HUD’s most recent review resulted in the property barely passing federal inspections. I’ll  have more to say about federal inspections in a moment.

“By the way, at that Goodwill Village property in Memphis, one resident said that he thought the issue was snakes on the property. Snakes on the property. He thought they were being caused because they were coming to ‘Eat the rats.’ In Goodwill Village, the same property, a resident had an issue with a gas leak. The resident’s home had the sink torn out, her stove and hot water disconnected, and a hole put into her wall. Two months after all of that, no one had come by yet to fix it.

“In Orlando, at the Windsor Cove apartments owned by Global Ministries Foundation, reporters saw holes in the wall where roaches and rodents came into the apartment. The same woman has a gap between her bathtub and the wall that lets water leak into the apartment below. After issues with his properties were exposed, here’s what Reverend Hamlett said: ‘No one should live under these conditions.’

“These are your properties, and it’s not just one property, these are multiple properties across multiple states. I want to focus specifically on the one I visited last week in Jacksonville. By the way, it was an amazing experience.

“So 48 hours before we announced we were coming, nothing, literally nothing is happening at this property. When we announced that we were coming to visit the property, suddenly a bunch of contractors show up. They put up a banner welcoming the residents to all the great stuff that they do there. Suddenly work crews are walking all over fixing the place up. All of a sudden, because we’re coming to visit, all these work crews mysteriously show up.

“Eureka Garden’s problems have been going on for a long time, but they only became known in October of last year when a local television station and other local media began to highlight it. My Jacksonville office, my staff there, toured Eureka Garden in October of 2015. I want to report what they found in that one building. And as I said, we now have reports about other buildings with similar conditions run by this Global Ministries 501(c)(3), but I want to share with you what my staff found when they visited Eureka Garden.

“They saw crumbling stairs disguised with duct tape and covered with apparent black mold. So what I’m talking about with the stairs is, the stairs that connect the first floor of the building with the second floor of the building, these metal stairs, they would just put duct tape over the areas where the stairs and the wall were cracking and almost falling. They would just put duct tape on it. There was mold on these stairs – they spray painted over it. They found faulty electrical wiring, and you know what they did with the faulty electrical wiring? They covered it up with a garbage bag so no one could see it. They could smell the natural gas odor being sucked from an outdoor piping system into the air conditioning units of residents. And they found all sorts of other health and safety issues.

“At Eureka Garden, one resident said dogs live better than this when they were asked about the housing. In fact, there is a 4-year-old living in Eureka Garden who is suffering from lead poisoning, which her mother has a right to believe she got in her Eureka Garden apartment, an apartment, by the way, paid for with your taxpayer money. Section 8 housing is federal taxpayer money going into the hands of these slumlords, and a child now has lead poisoning because of it.

“In December of last year, HUD declared Eureka Garden to be in default of the contract, and it set its February 4, 2016 deadline to meet repair requirements. In February, Eureka Garden passed this inspection, but by March, HUD had written to Eureka Garden saying that the department does not believe the property would currently pass another inspection.

“So last Friday, as I said, I visited Eureka Garden and I saw, for example, an apartment where the window did not open. I saw an apartment where the window didn’t open, a room where the window had been cracked, and you know how they fixed it? Somebody came in and put a glob of glue over where the window connects to the pane, and if you tried to open the window, it wouldn’t go up. Meaning, if there was a fire in that house, the person sleeping in that room cannot get out of that window unless they break out of the home. I saw that with my own eyes last week when I was there.

“I saw an apartment that hadn’t been painted in 13 years, 13 years. I saw a stove where the knobs were unrecognizable because they were covered with glue basically and grime. I saw a refrigerator that had to be — it looked like it was from North Korea — It had to be 15 years old, all sorts of rust on the side and they just spray painted over the rust.

“Global Ministries, by the way, as I said earlier, 48 hours before I visited, they started to fix some of these cosmetic issues. By the way, that included putting up a piece of wood with exposed nails and calling it a door.

“So this apartment has two exits, in the front and in the back. This lady gets home from work, she opens up her back door. They have boarded up the door and there are nails sticking through the wood.

“She has little kids, by the way, and the nails, by the way, were the kind that if you ran into that door because you didn’t know it was there, you’re getting a nail to the face, to the heart, to the gut.

“So you would ask yourself, all right, so you have these owners of all these units and they’re getting this federal money under this HUD contract. Where does all the money go? What are they doing with all this money that they make?

“Well, you can look at their 990 tax forms, which are available for all 501(c)(3) organizations. Let me tell you about the 2014 tax year, which is the most recent one that’s available. In the year 2014, the Reverend Richard Hamlet paid himself $495,000 plus $40,000 in non-taxable benefits.

“Also in 2014, the Reverend Hamlet’s family members were paid an additional $218,000. By the way, he had previously failed to disclose his family members’ compensation on tax forms, which is in violation of IRS rules that require CEO’s to disclose the compensation of all family members who work for an organization.

“The IRS reports also show that between 2011 and 2013, Global Ministries Foundation, the landlord that owns all of these units in all of these buildings that your taxpayer money is paying for, they shifted $9 million away from the low-income housing not profit to its religious affiliate.

“And there is no one here who is a more strident proponent of private and public partnerships, of faith-based initiatives, but you have these buildings that are crumbling. You have these people living in these deplorable conditions, and they took, in addition to paying himself half a million dollars and his family another $200,000, they took $9 million, and instead of using it to fix these units, they transferred it to the other entity they had for religious purposes.

“They don’t seem to want to spend the money, including the taxpayer money on making repairs, on making sure places like Eureka Garden are livable.

“Let me tell you what they do spend their money on. They spend their money on public relations specialists. Because last week, when I visited Eureka Garden, they had a public relations firm on the premises counter spinning me with the media, saying things like, ‘Oh, well where has been Rubio all this time?’ Well, this thing became available in October, and since October we have been involved in it.

“So they have the money to hire a law firm, they have the money to hire a lobbying firm, they have the money to hire a public relations firm, they have the money to transfer $9 million from the not-for-profit sector into their religious uses. They have the money to pay themselves half a million dollars a year plus $40,000 in nontaxable benefits, plus $200,000 for his family members, but they don’t have the money to fix these units. And not just in Florida, but all across this country.

“Let me tell you what this behavior is, let me tell you what Global Ministries Foundation is; it is a slumlord. They are slumlords, and there are people that are living in these deplorable conditions while your taxpayer money is going into their bank account, and they are laughing at us.

“By the way, this minister the other day, he’s now put these properties up for sale, and he told the press, ‘This is such a profitable business, we have so many bidders that want these properties.’

“Well, if this is such a profitable business, then why are you organized as a 501(c)(3), number one, and number two, where is all the money? Where is all the profits? Why aren’t they being invested?

“I am all in favor of faith-based organizations being involved in the public and civic life of this country, but as an organization who is organized on the principles of caring for others, this is not caring for people. This, my friends, is the stealing of American taxpayer money, subjecting people to slum-like conditions, pocketing the money, living off the money and transferring the money.

“I, for the life of me, don’t know how they passed any inspections because, I’m telling you, I visited and I’m not a building inspector, but you don’t have to be one to visit this building and know there is no inspection that that building should ever pass.

“And I would just say to you that this is the most outrageous behavior I’ve seen in public housing, and now I’m hearing the same conditions exist in Orlando, and in other buildings in Jacksonville. We know they exist in Memphis. In fact, they just lost their HUD contract in Memphis. The judge just issued a ruling against them yesterday on another issue in Memphis, Tennessee.

“So as a result of these conditions and other issues, I have filed four amendments that I briefly want to talk about. The first is amendment 3918, which passed. What it does is it shortens the required response time for contract violations from 30 days to 15 days. Within the 30 days that they found that gas leak at Eureka Garden, four people at Eureka Garden were hospitalized due to gas leaks. So shortening it I’m glad is going to be a part of it.

“Another amendment we passed, is one that basically asks HUD to determine the state of the assessments. Even the secretary himself has told me it’s time to revisit these assessments, because if you look at this property, there’s no way it should ever have passed any inspections. 

“We need to fix the inspection process in HUD, because there’s no reason any property like this should pass any inspection. 

“The third amendment that I have filed, that I hope we can pass, would give state and local governments more say when HUD renews contracts for owners that have violated previous contracts. In essence, the amendment would allow the secretary to refuse to withdraw a notice of default if the governor of the requisite state petitions HUD to do that. 

“Currently the only trigger for the secretary to withdraw a notice is a REAC score of 60 or above. If this amendment became law, if a property passed the inspection, but the governor of the state in which the property is located requests the secretary to overturn the result, the secretary would have the power to do so. And this impacts Eureka Garden and these other places because flawed inspections let HUD re-certify properties that are not up to standard. 

“The Jacksonville City Council has been engaged, and the mayor of Jacksonville, Mayor Curry, is supporting this amendment. It would grant them the ability to seek the governor’s support in having say over the process.

“The last amendment I filed is Rubio amendment 3986, and it is to make temporary relocation assistance available for residents in situations like the ones I’ve just described. This amendment would make tenant protection vouchers available for tenants living in units where the owner has been declared in default of a HUD housing assistance payment contract due to physical deficiencies, allowing the secretary to consider granting relocation vouchers sooner in the process.

“The lack of temporary relocation assistance has kept these tenants trapped in Eureka Garden. The inability to temporarily relocate resulted in tenants being hospitalized because of gas leaks and other difficult conditions. For example, a man had to sleep in his bathtub for a week at Eureka Garden, and tenants could not cook because the heat was shut off for days at a time.

“One of the things you hear from HUD is, ‘Well, we can take away the contract but then what happens to all these people? So we don’t want to do that.’ And slumlords like Reverend Hamlet and his group, they know they can get away with this as a result.

“There’s probably more to be done. I said publicly I think the Justice Department should look into these people. I think the Justice Department should look into places like this. I think the IRS should examine their tax status. I think people like this should never again be allowed to have a single HUD contract anywhere in America.

“This is unacceptable and it’s happening right underneath our nose. Today it’s Eureka Garden, but I already told you all the states. In fact, I encourage my colleagues who live in the states of Alabama, and Indiana, and Louisiana, and North Carolina, and New York and Georgia, you should look into the properties that Global Ministries Foundation operates in your states.

“Because if the trends continue, if the trends hold up, then I almost guarantee you that you are going to find slum-like conditions in your state the way I found in mine and the way they found in Tennessee. And I hope I can earn my colleagues’ support in bringing these reforms as part of the bill that’s before us today.”