The city law office is looking into whether a conflict of interest existed when Augusta Commissioner J.R. Hatney voted Tuesday to repay federal HOME funds spent by a community housing development organization associated with his church.
The money, about $299,000 of a $344,000 reimbursement demanded by the U.S. Department of Housing and Urban Development for failure to complete housing projects within a five-year time frame, was allocated to East Augusta Community Development Corp. before Hatney’s election to his first commission term in 2005.
HUD regulations prohibit a commissioner from voting on a matter in which he has financial interest, Augusta General Counsel Andrew MacKenzie said.
The law office is exploring the potential conflict as it seeks to recover money from the two organizations associated with the city’s latest HUD refund demand.
Because it involves pending or potential litigation, MacKenzie declined to comment further or more specifically about the case. Hatney did not return a message Friday.
Hatney, the senior pastor of Good Hope Missionary Baptist Church, founded East Augusta CDC in 1999 and remained the chief executive listed on its articles of incorporation filed with the Georgia secretary of state’s office through 2007. That year, the group changed CEOs from Hatney to Johnny Hampton, the church’s administrative pastor.
After Hatney’s “yes” vote Tuesday, one of six in favor of reimbursing the federal funds used by East Augusta CDC with money from the city’s general fund, Hatney denied involvement with the organization and said he was “in the clear.”
Authorized under a city contract signed by Hatney before he took office, the money was used to purchase and clear lots in Augusta’s Marion Homes subdivision with the stated intent of creating low- and moderate-income housing, though no housing has resulted.
Before Tuesday’s vote, City Administrator Fred Russell said the economic downturn might have limited East Augusta’s ability to get the work done, while Augusta Housing and Community Development Assistant Housing Director Hawthorne Welcher cited the lack of adequate water and sewer at the Marion Homes sites.
East Augusta CDC has title to a dozen lots in the riverfront neighborhood obtained with federal money that the city is now expected to reimburse.
Since 1995, the city has authorized payment of more than $900,900 in federal housing money to East Augusta CDC, including $139,891 in operating expenses such as staff salaries, according to a Housing and Community Development handout from last year.