RICHMOND -- Police detectives are investigating allegations that a maintenance manager for the city's embattled Public Housing Authority steered $340,000 in work contracts to a company linked to her husband, and hinted that the probe could turn up more.
"Goods and services paid for with taxpayer funds may not have been truly delivered," said Richmond Police Capt. Mark Gagan. "This may be a symptom of the bigger problem (in the housing authority)."
The investigation, which began last week, is of Debra Holter, a Public Housing asset specialist assigned to the Hacienda Housing Project, the city's largest and most troubled. Gagan said that Holter's job included managing maintenance contracts, but one company received a disproportionate share of them.
"It looks like she circumvented the normal process and had no oversight, no one signing off, on these contracts she was allegedly funneling to this company," Gagan said.
The City Council voted earlier this year to explore ways to transition more than 100 residents out of the facility due to ongoing maintenance issues, including a leaky roof and pest infestations.
Holter "is on administrative leave pending the outcome of the investigation, which, at this point, is both a personnel (misconduct) and criminal investigation," according to an email sent by City Manager Bill Lindsay to council members Wednesday. "The allegations involve possible fraudulent contracts for maintenance services at the Housing Authority."
Gagan said the contracts were paid from March 2012 to mid-2013.
Holter's husband, Sidney Holter, has admitted to investigators that he is affiliated with the company that received the contracts, but denied receiving any financial compensation, Gagan said.
"He said he volunteered his time to oversee the work being done," Gagan said.
Gagan identified the company as Strong Built Construction and said it has an address in the city's affluent Point Richmond neighborhood. Calls to a phone number on the company's website were not returned. More interviews were conducted Thursday, and Gagan said investigators suspect the evidence could lead beyond Holter.
"For a middle manager to be able to bypass the appropriate process for spending money, there may be other people not providing the right level of oversight," Gagan said. "How much it financially benefited (Holter and her husband) is yet to be known."
Gagan added that in other instances, it appears that the city was charged replacement costs for appliances and other amenities that may have just been refurbished and reinstalled.
Calls and emails to Housing Director Tim Jones and Holter were not immediately returned.
Such investigations are nothing new to the Richmond Housing Authority. Back in 2008 and 2009, more than $61,000 in work contracts were steered to the brother of a top agency official, according to a September 2009 audit ordered by the U.S. Department of Housing and Urban Development. The audit found that the agency was rife with waste and improper spending.
New troubles at the Hacienda, a 150-unit, six-floor complex, and other structures managed by the agency came to light in February, when The Center for Investigative Reporting characterized the system as among the most troubled in the nation, beset by mounting debt, sloppy procurement practices, misuse of public funds and poor staff performance.
With an annual budget of about $26 million and 550 units spread over five sites, Richmond's housing authority is smaller than many other federally funded housing agencies in the Bay Area.
A 2013 action plan for the housing agency outlined in a letter to city officials by HUD detailed a host of complaints, including that work orders by contractors were filled out and paid with public funds, but that the work was either not done or done shoddily, often after long delays. HUD also labeled Jones "ineffective."
An investigation by this newspaper in April revealed that Jones authorized nearly $80,000 in travel to conferences for volunteer advisers from 2008-11, while the authority groaned under debt and struggled to keep leaks and pests out of residents' units.
Despite the growing controversy, the council and Lindsay declined to remove Jones, and instead authorized him to investigate myriad problems and craft a plan to improve conditions or move residents to better housing.
Councilman Tom Butt, who has been critical of media reports about the Housing Authority, urged caution. During a fact-finding visit to Hacienda earlier this year, Butt was escorted around the facility by Holter, whom he said he only met once and "didn't form an impression of."
"When there is alleged misconduct in the city of Richmond, we deal with it," Butt said. "There is no cover-up."
Butt said Jones' fate is up to Lindsay, who has stood by him in the past.
Councilman Corky Boozé said the situation has reached a tipping point, calling the Housing Authority a "mess" and a "disgrace."
"This department needs to be cleaned out, starting at the top with Jones," Boozé said.
Contact Robert Rogers at 510-262-2726. Follow him at Twitter.com/sfbaynewsrogers.