Hud Ends Contract With Security Firm Tied To Nation Of Islam

WASHINGTON - The Department of Housing and Urban Development this week gave the first sign that it is moving on months-old demands from Capitol Hill and elsewhere to end government subsidies for private security companies run by members of the Nation of Islam.

On Thursday, HUD ordered the Baltimore Housing Authority to end a security contract with the Nation of Islam Security Agency (NOISA), saying it was in violation of federal procurement regulations.

HUD has oversight of security contracts in federally subsidized housing projects and was under intensifying congressional pressure to either prove that the companies complied with federal regulations or promptly terminate them.

Housing authorities in Baltimore, Washington, Chicago and seven other cities have paid an estimated $20 million over the past five years to the firms, whose unarmed, bow-tied patrols now guard some of the nation's bleakest public housing projects.

The companies have argued that they have no corporate ties to the Nation of Islam or its leader, Louis Farrakhan, and have performed well in bringing security to drug-infested projects once considered too dangerous to enter. They say they are being unfairly singled out for criticism and threatened with the loss of business on technicalities of federal law.

HUD did not contend Thursday that the Nation of Islam Security Agency, which formerly patrolled projects in the District of Columbia, was doing a bad job. It focused instead on contract bidding irregularities that were first highlighted during a congressional hearing last March, when critics attacked HUD for providing what Rep. Peter King, R-N.Y., called a "federal hate subsidy" for the firms.

Concern over anti-Semitism

King and major Jewish organizations have charged that the companies' employment practices violate federal anti-discrimination laws and openly spread Farrakhan's message in their contacts with public housing residents.

Jewish groups say that by subsidizing the security companies, the government is condoning what the groups say are outrageous anti-Semitic statements by Farrakhan and his messengers.

But the security firms have won praise from some public housing residents for vastly improving conditions in drug-infested buildings, some so threatening that HUD officials admitted last spring that they had interviewed residents about security services by telephone rather than send employees inside.

Elizabeth Wright, president of the Baltimore resident advisory board, said in an interview Thursday: "I just feel terrible. Since (NOISA) has been in place, everything has changed and everyone in Baltimore knows that. The buildings are safe, and they're clean. The NOI people are decent, respectable people. They are role models for the children. They show you don't need no weapons to do a job; it's all in the way you talk and approach people."

Wright said she had not heard the guards making remarks that could be considered anti-Semitic. She said a few of them were white.

HUD spokesman Alex Sachs said Thursday, "Price alone was not the basis on which we made this decision. Our concerns were fairness to the bidders."

Not the lowest bid

The NOISA contract generated controversy because its $4.6 million bid was not the lowest bid to patrol four high-crime Baltimore public housing developments. City officials contended they made the decision - with the knowledge of HUD regional officials - to factor in other qualifications in awarding the contract, such as a company's approach to the job. NOISA, owned by William Muhammad, had won favorable reviews in Washington for dramatically improving conditions at housing developments.

HUD ordered Thursday that Baltimore authorities award the one-year contract to Wells Fargo, which made a lower bid at $3.5 million. The Baltimore Housing Authority must also refund to HUD the difference in the contract price.

A formal contract was awarded in January. Baltimore Housing Commissioner Daniel Henson said crime at the housing projects had dropped by about 40 percent since then.

King and others, including Senate Majority Leader Bob Dole, R-Kan., have questioned bidding irregularities, allegations of hiring discrimination and improper proselytizing by the guards. They are demanding that HUD enforce anti-discrimination and procurement regulations.

This week, King introduced an amendment to the U.S. Housing Act of 1995 that calls for full investigation of any Nation of Islam affiliated contracts with public housing authorities.

"King is opposed to Farrakhan getting any support because he believes he's a hatemonger and the Nation is a hate group," said King's press secretary, Dan Michaelis.

A Farrakhan representative declined to comment.