Is Martinez’s HUD record germane to Senate race?

As Mel Martinez campaigns for the U.S. Senate, he passionately tells audiences a personal story that can be summed up like this: A Cuban refugee arrives in Florida at 15 without his parents or a home. Nearly 40 years later, Martinez is standing in the Oval Office being sworn in as a member of President Bush’s Cabinet.

It is a compelling success story, but critics say Martinez was less successful as the nation’s housing secretary, that he accomplished little, didn’t understand how Congress worked and failed to improve the lives of the homeless poor.
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Martinez and his supporters disagree. They argue that, during his nearly three years as secretary of housing and urban development, Martinez zealously cracked down on waste and abuse, pushed to make it easier for the poor to buy homes and fought the mortgage industry to reduce the cost of home loans.

“I think he is a good and decent man who means well,” said Sheila Crowley, president of the National Low Income Housing Coalition. “I think his instincts were good. But he was part of an administration that did not care about low-income housing. He learned quite quickly to be a good soldier.”

It’s not that simple, says Dan Murphy, a Washington lobbyist who was Martinez’s chief of staff during his first year at HUD. Murphy says Martinez arrived at an agency where morale was low, direction was scant and change was feared.

“He took what has been historically a very difficult agency, surrounded himself with some very sharp people and ran it like a chief executive who gives his people the power to get things done,” Murphy said.

Low profile at HUD

In January 2001, Martinez had been plucked from his job as Orange County manager and propelled into the 10th-floor, Potomac River-view office of HUD secretary. It is a Cabinet position normally 13th in the line of presidential succession.

But Martinez is not a native-born citizen, so he was ineligible to become president. As a result, he never had to be the “just-in-case” Cabinet officer who sits in an undisclosed location during the president’s State of the Union address.

Martinez arrived at an agency with 10,000 employees, a $30 billion budget, critics in Congress, a legacy of abuse and mismanagement and a history of politically ambitious, high-profile secretaries: Andrew Cuomo, Henry Cisneros and Jack Kemp.

“My first priority will be for HUD to continue to put its own house in order,” Martinez said soon after taking office. “There are a great many areas of institutional weakness that must be addressed.”

The tone suggested Martinez would have modest goals. And although he would frequently campaign for Republican candidates, travel to Russia and make appearances for the White House, Martinez kept a relatively low profile.

More than a year after Martinez took office, Washington Post columnist David Broder described him as “the mystery man of the Bush Cabinet.” Broder added that “his goals are commendable but modest — and appear to have come straight from the Bush campaign or the White House Domestic Policy Council.”

Six months later, Government Executive Magazine, in an in-depth look at HUD about 20 months after Martinez took office, said, “Little more is known about him. He gives few press interviews, and when he meets with official visitors or addresses industry groups, he sticks to such safe themes as the importance of home ownership or the need to simplify mortgage applications and procedures. However, the consensus among HUD watchers is that Martinez is a well-meaning man who might well have what it takes to keep the department on the right track.”

Three months after taking office, Martinez created two new programs: a $1.7 billion tax credit for investors who build affordable housing and The American Dream Fund, which included $1 billion over five years to help with down payments for 650,000 low-income families.

He also increased spending on HUD’s voucher program, from less than $12 billion to more than $18 billion. The money is used to help low-income families and individuals rent moderately priced apartments.

Of the voucher system, also known as Section 8, Martinez said, “Some believe that the answer to meeting our social needs is to rely solely on the federal government. Others say that government only has a limited role in solving these complex problems and would totally rely on the private sector. I think the president has outlined a third way, a better way.”

Martinez, who joins President Bush as an advocate of public-private partnerships, fervently believes that the way to fight poverty is to help the poor buy homes. He campaigned for it at HUD and talks about it frequently in the Senate race. Those who know him say he has never forgotten arriving in this country without a home and that the experience still moves him.

“This is the way to the future, this is the way to wealth,” Martinez says repeatedly of homeownership.

But he was less friendly to public housing projects. Martinez’s first budget proposed cutting $300 million meant to help public housing authorities pay for police and security devices.

“It’s a huge mistake to terminate this program,” said Timothy Kaiser, executive director of the Public Housing Authorities Directors Association. Martinez countered that policing was a local responsibility, not HUD’s.

And HUD was roundly criticized for efforts to end the HOPE VI program, which provides money to rehabilitate public housing.

Martinez told the Conference of Mayors in 2002 that “the solution to meeting this nation’s affordable housing needs will not come out of Washington.” Martinez, who led the Orange County Housing Authority in the 1980s, said solutions will be found at the local level.

His biggest fight was over a plan to make it easier and less expensive for people to buy a home, by streamlining closing costs and reducing the chance of buyers being surprised by unexpected fees.

Murphy, his former chief of staff, says Martinez fought hard to win reform of the Real Estate Settlement Procedures Act, but the mortgage industry fought back “fiercely” and the legislation was scuttled after he left office in December last year.

Still, Murphy says, it put the industry on notice that HUD would be looking out for consumers. Martinez beefed up investigative and enforcement efforts and took action against more than 50 companies, collecting more than $2.5 million in fines for various violations of the procedures act.

Blocked tax-paid mortgage study

One of Martinez’s most controversial moves was a decision to block the release of a study, paid for by taxpayers, that looked into whether the nation’s two biggest mortgage lenders — Fannie Mae and Freddie Mac — discriminated against minorities.

Martinez said he stopped release of the study on the advice of HUD lawyers. He also said the study used outdated data, was skewed and “would have resulted in real disruption in the marketplace.”

Martinez also has denied repeatedly that he had any contact with Fannie Mae lobbyist Al Cardenas, a former chairman of the Florida GOP and a friend of Martinez’s. Cardenas, in turn, insists he never had contact with Martinez on this issue.

But the issue puts a cloud over Martinez’s insistence that he is a champion for minorities and the poor, his opponents say.

“Mel Martinez’s main goal was to be a good guy in the Bush administration, which resulted in decisions I’m not sure he always believed in,” said the Low Income Housing Coalition’s Crowley.

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