Multnomah County auditors say a former county commissioner who's now running for Congress pressured the Joint Office of Homeless Services (JOHS) to skirt contracting rules and create loopholes to benefit a housing services organization that wasn’t qualified to bid on county contracts.

According to a memo released last week from the county auditor’s office, a Seattle-based nonprofit called Housing Connector applied for funding through JOHS’s landlord recruitment and engagement contract cycle last spring. The tech-based nonprofit came in sixth out of eight applicants that were scored and reviewed. Despite its score being too low for consideration, JOHS was reportedly directed to change the application process midway, in an effort to give Housing Connector an advantage.

While the commissioner in question wasn’t named in the memo, The Oregonian reported and the county later confirmed to the Mercury it was former Multnomah County Commissioner Susheela Jayapal named in the complaint. Jayapal resigned from the county board last year to run for Oregon’s 3rd congressional district, currently represented by Earl Blumenauer. Blumenauer plans to retire this year and won’t seek reelection. 

“After discussions with an elected official’s office, which was expecting the county to contract with Housing Connector, the Joint Office changed its allocation process, adding another round of questions,” Multnomah County Auditor Jennifer McGuirk’s memo states. The auditor’s office concluded the additional round of questions changed the scope of the work under the initial bid process and raised questions about whether the county was favoring one company over others.

Prior to Housing Connector winning the contract, the corporation showed up on a board of commissioners agenda for funding in March. At the time, the group hadn't been certified with the county and wasn't eligible to win bids. The corporation later became eligible and applied for a county contract.

Marc Rose, a certified fraud investigator and director of the county's Good Government Hotline, said providers must go through a qualification process to be eligible contractors.

"The process can vary and is generally covered by Oregon public contracting law and county Public Contract Review Board rules," Rose told the Mercury.

Investigators said the initial contract award allocation process used by JOHS “appeared well designed to ensure impartial and open competition,” but noted allegations that JOHS staff “felt pressure to change the process so that Housing Connector would receive a contract.”

Ultimately, investigators determined the Multnomah County commissioners approved a contract worth up to $779,000 for Housing Connector in September, using a process that didn’t conform to county contracting rules. 

The auditor’s office said the incident, which was initially reported to the Good Government Hotline, didn’t meet the definitions of fraud, waste, or abuse of position, but McGuirk noted the memo was released to the board and the public “to provide transparency” about what investigators found.

“Because the scope of work changed, we believe that in the interests of impartial and open competition, the allocation process should have been canceled.” Alternatively, the county could have restarted the application process, or gone with a sole source procurement, the memo noted.

Jayapal concurs with the auditor's conclusion that the process was flawed, and should have been a sole source procurement, but defends her efforts to make sure county funds were going toward a streamlined model.

“The auditor’s memo confirms what we already knew - there was no wrongdoing here," Jayapal said in a statement released to media. "The Housing Connector program is a proven model for moving people from the streets, and one that I believe will make our system far more effective and efficient. I have no regrets about advocating for it."

The former county commissioner says when the initial funding discussion came up, she envisioned the money going toward a particular concept, similar to what Housing Connector offers. The organization uses a Zillow database to connect landlords with organizations and tenants.

“I wasn’t under the (impression) that it had to be a particular provider, but I had envisioned a centralized model," Jayapal said Tuesday. “Smaller organizations in particular were having a hard time finding landlords and finding units.”

Jayapal noted a disconnect between what she and Chair Jessica Vega Pederson had in mind, and the way JOHS carried out the contract solicitation. She clarified that neither she nor any of the other board members steered the evaluation process, or even took part in it.

Auditors said they aren't aware of any prior relationship or personal connection between county commissioners and Housing Connector. Jayapal said she and her staff stumbled on the nonprofit while researching affordable housing organizations.

The auditor's office noted the incident doesn't meet "abuse of position" standards because none of the county board members or their relatives benefitted financially from the contract.