Washington state’s former Speaker of the House, Rep. Frank Chopp, D-Seattle, moved to redirect about $2 million that Seattle governments were going to award to two nonprofits and earmark it for a nonprofit he co-founded, according to emails obtained by The Seattle Times.
The $2,050,000 award in state money was allocated in the 2021 budget session, but went unused. The King County Regional Homelessness Authority announced last week the same funds would be divided between Catholic Community Services and Chief Seattle Club for tiny house shelters for homeless people.
However, Chopp used a “local community project information form,” which allows legislators the ability to essentially earmark funds for a specific recipient, and which would override the Regional Homeless Authority’s direction once the supplemental budget is signed. A spokesperson for the state Department of Commerce confirmed Wednesday the money, if approved by Gov. Jay Inslee, will instead go straight to the Low-Income Housing Institute.
The Regional Homelessness Authority took over strategy and budget decisions for homelessness spending in Seattle and King County at the start of the year. The new government agency controls most of the money the city of Seattle and King County spend on homelessness.
While local politicians, as well as people who have experienced homelessness, sit on its board, the authority was intended to put experts more in charge of spending government money wisely.
“We created a King County Regional Homelessness Authority so we would have experts in charge of designing our homelessness strategy and then be able to hold them accountable,” said Adrienne Quinn, who teaches a class on homelessness at University of Washington and sits on the authority’s implementation board — though she wasn’t speaking on behalf of the authority. “But they can’t be held accountable for strategies that they are not initiating.”
Chopp said he wasn’t playing politics, but was “rededicating” the money to its intended purpose.
“If (the authority) want to have my help in trying to solve or problem-solve this, I’m more than willing to help them,” Chopp said. “I’m about trying to provide more housing — produce more housing — for folks who are suffering or dying on the streets.”
It’s not uncommon for the state to give money straight to a nonprofit, but since the pandemic, the state Department of Commerce has made a habit of giving shelter money to Washington’s counties and city governments, which then choose to fund whatever they deem best: shelters, tiny houses or, as in Walla Walla, huts that resemble pioneer-era Conestoga wagons.
But it is unusual for a legislator to reverse a competitive public bidding process and instead give the money to an organization with which he has close ties. The institute’s executive director, Sharon Lee, is a longtime friend of Chopp and one of the institute’s apartment buildings in Bremerton is named after him.
Lee said she did not ask Chopp to redirect the money.
Chopp said the money was never the authority’s to award, and that he is also friends with the heads of the other two nonprofits that won’t be getting the money. Chopp co-founded the Low-Income Housing Institute with one of them, Michael Reichert, director of Catholic Community Services of Western Washington.
The $2 million was set aside in the 2021 state budget for “tiny houses and cottages.” At the time, the city was still in charge of its homelessness spending and Seattle City Councilmember Andrew Lewis, a leading advocate for tiny houses, had launched a campaign to build more tiny house villages with public funds and more than $1 million from wealthy individuals and developers — money that would be donated directly to the Low-Income Housing Institute.
Chopp said in an interview that Seattle sat on the money for a year, rather than build those tiny houses. While that’s true, the city’s homelessness division was thinning out in preparation to give its contracts over to the Regional Homelessness Authority, which had been delayed in its setup by the arrival of COVID-19.
Seattle Deputy Mayor Tiffany Washington said the city was down to three employees in its homelessness division last year, which slowed things down — and the authority’s director, Marc Dones, has moved very quickly by comparison.
“Marc’s vision — and I share this vision — is to diversify,” Washington said. “And so that is why Marc chose to run a process instead of directly allocating the money to LIHI. We have to have other providers who are opening up non-traditional shelter.”
Chopp conceded he didn’t know if his change will make the process happen faster or slower, now that he has reversed the authority’s decision.
Lee denied there was anything improper about Chopp’s changes, and said it was actually the authority that was biased and has a conflict of interest — though she wouldn’t explain why.
She said that the homelessness authority could use existing funding to fulfill the promises to Catholic Community Services and Chief Seattle Club, and that she would be willing to contribute some of the state funds to the Chief Seattle Club proposal.
“We need a huge scale around resources for ending people’s homelessness,” Lee said. “The mayor — well, when he campaigned, he wanted to add 2,000 tiny house villages, shelter beds or permanent supportive housing in his first year in office. I think we do need a lot of people stepping up.”
In King County, tiny house villages are popular with many lawmakers, but have met criticism from experts and some current residents. Dones has criticized the tiny house village model the Low-Income Housing Institute champions.
Late last year, the authority began a competitive bidding process to use the money. The Low-Income Housing Institute applied, but the authority’s review committee recommended against awarding the money to the nonprofit, according to a memo obtained by The Seattle Times. Executive Director Lee told the news site PubliCola she was planning to appeal the decision.
“The authority ran a community process that involved folks with lived experience and community members, as well as authority staff, in the contemplation of this award,” Dones, the authority’s CEO, said. “And we’ll figure out a way to ensure that our partners that wanted to move forward with good expansions that would’ve benefited the community will be able to as best we can.”
According to an email obtained by The Seattle Times, in January, Chopp called the authority’s intergovernmental relations manager, Nigel Herbig, and told him that if the homelessness authority didn’t use the money for tiny house villages, he was going to “pull the funds.“
“He let me know in no uncertain terms that he was going to reprogram the money to be used specifically for (tiny house villages) in Seattle,” Herbig wrote to his supervisors in the email.
It’s unclear from the email if Chopp was threatening to pull the funds if the money didn’t go to the Low-Income Housing Institute specifically, but an “information form” dated Jan. 28 — two days after this conversation — seems to show Chopp proposing the money go straight to the institute in the supplemental budget the governor is supposed to sign next week.
Chopp said in an interview that he never threatened to pull the funds, but that they were always state funds and he was concerned that the Regional Homelessness Authority had said for-profit developers could apply — something the state can’t spend taxpayer money on.
But Herbig’s email from January said a nonprofit could only purchase materials or accept land or building materials from a for-profit. The nonprofit would have to control the site and run the operations.
While the for-profit Everett company Pallet also submitted a bid that the authority didn’t pick, Catholic Community Services planned on buying Pallet’s “micromodular” shelters that used plastic composite for its proposed village. One such shelter was set up by the county government in Queen Anne in 2020.
On March 18, the homelessness authority announced it would award $1.5 million to Catholic Community Services and nearly $2 million to Indigenous-led nonprofit Chief Seattle Club. Not all of that money came from the state.
The authority is “evaluating the impact” of Chopp’s change, according to another email Herbig sent to Seattle City Council on Wednesday morning, notifying them those funds were now “earmarked exclusively” for the Low-Income Housing Institute. They received no written notice of the change, but the change isn’t final until approved by the Legislature and signed by the governor, Herbig wrote.
Harold Odom, who lives in a tiny house village run by the institute and co-chairs the authority’s implementation board, said this “conflict of interest” looks to him like corruption.
“Why isn’t (Chopp) being called on the carpet? He started LIHI,” Odom said.