אין נאמען פון די עסקנים ווערט יעדער איינער געבעטן צו שיקן בריוו צום האד סעקרעטאר איבער די אומבארעכטיגטע רענט העכערונג פון קראוס מענעדזשמענט, ביי די בעדפארד גארדן דירות. פאלגנד איז א סעמפל פון א בריוו וואס מען קען שיקן.
Bedford gardens Tenants council
C/O Joseph Green
100 Ross St.
Brooklyn, NY 11211
Apt. 2-B
03/20/07
Housing and Urban Development
451 7th St. S.W.
Washington, D.C. 20410
Honorable Alphonso Jackson, Secretary
Inspector General, Kenneth M. Donohue
Re; Bedford Gardens-Kraus Management
Mitch-Lama Rent Increase
This is an open letter to the HUD Secretary and the Inspector general
It was with great pleasure to see you when you came to New York to address and stop the sale of Starrett City and your concern that AFFORDABLE HOUSING might be jeopardized once vacancies will no longer be occupied by applicants with Section 8 or other HUD subsidized programs.
Mr. Secretary, your responsibility to uphold and save the affordable housing in Mitch-Lama developments in the City of New York does not stop by rejecting and stopping them from being sold.
While your focus that Starrett City 6,000 families were in jeopardy of being priced out of the subsidized programs, there is a much larger issue that you and your office should address and act that could jeopardize all of 172 Mitch-Lama developments in the city as well as 600,00 families. All supervised by Housing Preservation and Development.
We would like to bring to your attention Bedford Gardens, a Mitch-Lama development in Williamsburg Brooklyn, managed by Kraus Management
Kraus, has submitted a rent increase application for 16% for the year 2008 an additional 10% for 2009, a total of 26% for the next 2 years.
To give you a little background of Kraus, in 1997 Kraus applied for a 23% rent increase, only for the tenants council to respond with a 97 page rebuttal of double billing, overcharges and unauthorized payments by Kraus Management to his own inter-locking self-dealing companies in the millions of dollars, HPD totally ignored our findings and response, HPD blindfolded approved the increase, it was only after presenting our response and findings to then HUD Secretary Andrew Cuomo and NY Regional Director Bill de Blasio, that the increase was rescinded by HUD with the same findings and reports that was submitted to HPD which they totally ignored.
Additional background on Kraus reports for the last 25 years made by NYC Comptroller Harrison J. Goldin, in 1982-audit report.
''The audit found that most of Mr. Kraus's excessive, overpriced purchases of Bedford Gardens were not only unauthorized, but were specifically disapproved by HPD. The city agency made many requests to Mr. Kraus to sever his related-party contracts. Reimburse certain payments and obtain HPD approval before making similar future purchases'' the audit was referring to millions of dollars of overcharges made by Kraus self-dealing companies.
HPD's hearing Officer Ira Berstein, at a Bedford Gardens rent increase-hearing report on January 6, 1986 he writes in his report.
''Self-dealing is not, per se, illegal or inappropriate, yet the law has consistently viewed self-dealing with a jaundiced eye. This jaundiced view is also not in appropriate: the law's lingering distrust of self-dealing is based on long-standing
Recognition that self-dealing combines, in one unfortunate locus, both a compelling motivation to commit malfeasance, and temptingly enhanced opportunity to escape detection'' ''in light of the above consideration, a number of expenses items projected by the petitioners, must be deleted from the projection, by reason of improper accounting techniques, misallocation of expense, unrealistic projection techniques, insufficient documentation or other objectionable methodology''.
Again 5 years later at a rent increase hearing, HPD hearing officer Ira Bernstein in his report April 2, 1991 displayed a much stronger posture vis-à-vis Kraus et al. We quote directly.
''At Bedford Gardens any overpayment by Kraus management would only serve to enrich some other Kraus entity'' ''the owners of Bedford gardens have created a situation in which it is difficult if not impossible, for a hearing officer to accurately determine whether what portion of the money that changed hands at Bedford was reasonably and necessarily expended for the operation of the development''. Mr. Bernstein followed.
HPD Hearing officer Ira Bernstein again in his recommendation December 4, 1995 issued an abbreviated report in which he ''recommended that the Assistant commissioner for housing supervision carefully scrutinize the entire record…. To determine the amount if any, of increase in monthly charges under the current circumstances''.
We urge you to continue your obligation and responsibility to save AFFORDABLE HOUSING in Mitch-Lama developments by stopping HPD from continuing the hearing processes and have your office do a full audit on Kraus as well as on HPD for ignoring their own hearing officer's reports and findings for the last 10 years.
Mr. Secretary, at the same time we are asking that your office appoint an independent accounting firm and or an independent auditor to review past and present transactions and to define overpayments and other monies improperly distributed to the Kraus network.
Mitch-Lama's can not only be saved by stopping the sales, these horrendous amounts of rent increase applications by Kraus etc; will have the working class and the poor on the run, we look forward for HUD to save the ENTIRE program citywide.
