The Business of Government Hour


About the show

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. The executives discuss their careers and the management challenges facing their organizations. Past government executives include Administrators, Chief Financial Officers, Chief Information Officers, Chief Operating Officers, Commissioners, Controllers, Directors, and Undersecretaries.

The interviews

Join the IBM Center for a weekly conversation about management with a government executive who is changing the way government does business.

Alphonso Jackson interview

Friday, August 29th, 2003 - 20:00
Mr. Jackson is the Deputy Secretary for Department of Housing and Urban Development
Radio show date: 
Sat, 08/30/2003
Intro text: 
Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership; ...

Missions and Programs; Collaboration: Networks and Partnerships; Strategic Thinking; Leadership;

Complete transcript: 

Arlington, Virginia

Monday, May 19, 2003

Mr. Lawrence: Good morning, and welcome to The Business of Government Hour. I'm Paul Lawrence, the co-chairman of The IBM Endowment for The Business of Government. We created the endowment in 1998 to encourage discussion in research into new approaches to improving government effectiveness. Find out more about the endowment by visiting us on the web at

The Business of Government Hour features a conversation about management with a government executive who is changing the way government does business. Our conversation this morning is with Alphonso Jackson, Deputy Secretary of the Department of Housing and Urban Development.

Good morning, Alphonso.

Mr. Jackson: Good morning, Paul.

Mr. Lawrence: Perhaps you could start by giving us some context. Could you tell us about the missions and the programs of HUD?

Mr. Jackson: HUD's mission is to provide decency and sanitary housing for low and moderate income people in this country. And the goal of this secretary and myself is first to increase home ownership, to promote affordable housing, and to strengthen the communities in which we deal with.

And in that sense, there are a number of issues that confronts us today. And one is the Real Estate Settlement Act, where we are trying to look at how, in closing a home, we can make it very, very simple.

One other problem that we are faced with today is, when you go to closing -- and it happened to me, Paul -- when you go to closing, you start that morning with one closing cost. By afternoon you have another closing cost, then by that evening you have another closing cost.

So the Real Estate Settlement Act says that once you contract to buy a house or to build a house, the closing cost is stated right up front. And that has been one of the largest problems that has been faced by low and moderate income people in this country, even some of us who are very well educated.

Mr. Lawrence: Give us a sense of the number of employees, the size of HUD, and the types of skills the employees have.

Mr. Jackson: HUD is a little over 9,000 employees, with a budget of about $32 billion. The skills range in HUD from clerical all the way up to Ph.D.s in research.

HUD is very, very unique in the sense that I believe that when you look at HUD as we know it by Housing and Urban Development, you think that all we do is address housing. It's somewhat of an oxymoron in the sense that we deal with mortgage bankers; we deal with commercial bankers; we deal with foreign countries in providing a number if issues. So, even though we have the title, Housing and Urban Development, we have a large array of people who work for us.

In fact, if we just take as an example, of planning development and research, most of the persons in that division are Ph.D.s, and they do in-depth research as to how we can provide better, safe, decent housing, how we can look at housing and make it better, that is insulation, et cetera, and so on. So we also have the technical side, which are architects and engineers. Then we have economists. So, HUD has a wide range of employees.

Mr. Lawrence: Now you're the Deputy Secretary. Could you tell us a little bit about the rolls and responsibility of your job?

Mr. Jackson: The way our President has set up -- President George W. Bush, in this administration, the Deputy Secretary serves as the Chief Operating Officer. I am responsible for the day-to-day operation of the agency. So, all of the Assistant Secretaries report to me on a daily basis. That is, plus the Chief Financial Officer, and the President of the Government Mortgage Backed Agency, which we call Ginnie Mae. So, I have the responsibility of making sure that HUD functions and runs well.

Mr. Lawrence: I'm curious: could you tell me what a typical day of the Deputy Secretary is like?

Mr. Jackson: I wish I could really tell you that. You know, there is not a typical day. I have a schedule that usually starts about 8:30, and usually ends about 7:30 or 8:00. But between that schedule, you have a number of crises, always, almost every day.

I was asked today at lunch by a friend, they said, "Have you ever had a boring day?" I said, "Not at Housing and Urban Development." And I really have not had a boring day. I try to keep all our appointments timely, but at the same time, issues come up that we didn't anticipate might come up, and we have to address those issues. Plus we have to deal with the Hill, that is, Congress and Senate. They'll call you and you have to get over to see exactly what the Congress person or the Senator wants to discuss. So it's a very, very unique job, but at the same time, it's very, very rewarding. But yet, it keeps you busy.

Mr. Lawrence: Percentage of the total, how much time is in meetings with large groups of people, versus by yourself thinking? How does it bear out?

Mr. Jackson: Paul, too much in meetings. One of the things, coming out of the private sector that at first I had to get adjusted to is how we meet in Government, and how decisions are made at the Federal Government level.

I was used to having a small cadre of people around me when I was in private life. We made the decisions and carried out the decisions. Here, that is not the way it is. I think you have to have input, and people expect to give you input into the decision that you're making.

In the final analysis, it is your decision to make, but it doesn't move as fast as I'd like it to move. But I think the Secretary and I have done a very excellent job of moving this agency forward, because we inherited an agency that had some serious problems. But, in the final analysis, I think we are doing a good job. But, if you want to ask me, as you did directly, I think I spend too much time in meetings.

Mr. Lawrence: Well, speaking of which, tell us about your career. What were your experiences prior to HUD?

Mr. Jackson: Well, probably somebody, if they had seen my resume, would say I couldn't keep a job. After leaving law school, I intentionally said that I never wanted to hold a job more than six years. And I've almost kept that to a "T", in the sense that I wanted a diversified experience in the sense. And I got out of law school; I practiced, and I was a law professor. Then I became Public Safety Director for the City of St. Louis. And from there I became the Housing Director for the City of St. Louis.

Then I went into private life. And then, after that stinking private life with the firm called Leventhal and Harwith, President Reagan and Secretary Pierce asked me to come to Washington to head up housing here. And I did.

And then after that I went back into private life again, and here I'm with the President. So I've had a very vast career. And one of the things I think is so phenomenal about my career is I've had a lot of experiences.

And they've not all been in the same. I mean, I got into the utility business, which I was President and Chief Operating Officer of AEP-Texas. Just by accident, I came in as a negotiator and an attorney to negotiate deals in India, Brazil, China, England, and after two years of negotiating deals, the Chairman of the corporation asked me to become the President and Chef Operating Officer of AEP-Texas. So I've had a vast array of experiences, but they've been absolutely wonderful for me.

Mr. Lawrence: One of the things I've noticed when I was looking at your resume was, you've been involved in housing issues at the local and at the Federal level. Could you contrast the different management styles or perspectives at these two different levels?

Mr. Jackson: I'm pleased you asked that question, because when I was running housing authorities around this country, and I had the good fortune of running a housing authority in St. Louis, and Washington, D.C., and Dallas. And dealing with HUD at that point in time, I always tell this to the employees when I'm speaking with them: I felt that there was not a capable, competent person at HUD. But since I am HUD now, we're all capable and competent. So, it's very different.

Again, even at the local level when I was running housing authorities, decisions were made more rapidly than they are at the Federal level, because we did not have the interference from Congress at the local level that we have here. One of the things that I had to get used to -- and this may shock you, because I think I was very na�ve. When I came here, I thought that the only person that I worked for was the President of the United States. And then I realized that there are 534 other people at the other end of the street. And they have Article 1, Section 7, which says they are the appropriators. They give us the money, so they have a lot of say so. At least, what my father used to say, "He who has the gold makes the rules." So I had to learn, in the final analysis, that the Congress had a lot of say so into what we do in running HUD on a day-to-day basis.

That was clearly, clearly a shock to me. And they do insist that certain things are done in HUD. Me, I think that probably the best two people to make those decisions are the Secretary and myself. But reality says that Congress has input.

Mr. Lawrence: Now, earlier you contrasted a little bit about the private and public sector. I'd be curious to go back there. You talked about the speed at which decisions are being made. But how about some other contrasts in terms of the management styles and cultures between the two sectors, from your observations?

Mr. Jackson: When I was in private sector as President of AEP, your staff understood their responsibility, many of them did. And I'm the kind of manager that doesn't believe that you micro-manage professionals. They should understand their responsibility and carry out those responsibility.

That has been somewhat true in government, not as true as it is in the private sector. Because, in the private sector, if your managers or your supervisors, or your vice president or senior vice presidents don't do their job, you can dismiss them immediately. Here in government, if they don't do their job, it takes anywhere from 18 to 24 months to dismiss a senior executive or a senior employee, because it's very, very difficult.

I guess if I had to denote the real problem that I saw was getting senior executives in this agency, and supervisors and managers, to carry out their responsibility. Now, it's not because they're not intelligent or bright. It's because over the years they have been so micro-managed, and they've been so restricted in what decisions they could make, some are afraid to make decisions. So the largest task to date for the Secretary and I is to infuse into the senior managers the right to make decisions and to be able to make a mistake. And that's quite different than private sector.

Mr. Lawrence: Is the scale of what you're dealing with now a factor in how it's being run, or was that something you were comfortable with coming from, say, AEP?

Mr. Jackson: No. When I left AEP I did not have 9,000 employees. I had about 3,200 employees. So I don't think that's much difference in the scale between 32 and 9.

The difference is, as I said before, it's a matter of responsibility and taking responsibility. HUD, as you know, was on the trouble agency list of all the Federal agency. It was probably at the very bottom. And one of the things that GAO said, and the Inspector General said, is that there was too much micro-management occurring at HUD.

And let me tell you exactly what they were alluding to. When we walked into HUD, the Secretary and I came to a conclusion that we had to have one HUD. That was not the way HUD had been operating in the last 12, 14, 15 years. Each individual entity operated as if it was HUD. Community Development and Planning operated as if it was HUD. Public and Indian Housing operated as if it was HUD. The assistant secretaries really didn't interact with each other. The general deputies didn't interact with each other.

One of the things that I said to the Secretary, and we agreed, is that the Assistant Secretaries must talk to each other so that they can understand how each nexus with each other to make this agency work. So our first priority was to set up weekly meetings with the assistant secretaries so that they could find out exactly what each respective entity did.

Then secondly, we set up what we called the executive management meetings, which occurs every month. And in those meetings the respective entity tells exactly what their problems are for that month. So that the Assistant Secretary for Community Development and Planning understands exactly what the President of Ginnie Mae is facing, or what the Chief Financial Officer is facing this specific week or month, whichever. And what we've found with that is that once they began to talk, the agency began to work a lot better. And we're seeing it work a lot better.

In fact, as I said, it's nothing to brag about, but this is the first time in about 20 years that we have not had a scandal at HUD. And I attribute that to the President and to the Secretary, and to our management style. Because I think that even the career employees appreciate the kind of support that we're giving them.

Mr. Lawrence: That's a good stopping point. We've got to go to a break. Rejoin us in a few minutes so we can continue our conversation with Alphonso Jackson of HUD. Do you know what the home ownership challenge is? We'll ask Alphonso to explain this when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Alphonso Jackson, Deputy Secretary of the Department of Housing and Urban Development. In June 2002 President Bush announced America's home ownership challenge. Could you tell us about this challenge, and HUD's response?

Mr. Jackson: What the President was speaking of is the home ownership gap that exists between Anglo-Americans and minorities. As you know, in this country Anglo-Americans are about 75 to 76 percent home ownership in this country, where Hispanics, African Americans are less than 50 percent. The President denoted that this was a home ownership gap, and that somehow we had to bridge that gap that exists in this country.

He set forth a challenge to both the Federal Government, to Fannie Mae, to Ginnie Mae, to Freddie Mac to find ways of bridging that gap that would increase minority home ownership in this country.

And he felt the way to do that was to look at the barriers that confront minority home owners, especially lower and moderate income. And there are two major barriers: first, the closing cost, and the down payment. So he created the American Dream Down Payment Program, which, if funded this year will be $200 million for the next five years. And it will go toward helping minorities close, and make the down payment on their home.

Now, some have said, "Well, this is a form of socialism." No, I think it's a form of helping a person move up, and making sure that they have the same dream that everyone else has.

What the President, the Secretary, and I have felt, especially about his home ownership initiative, when people own homes, Paul, they take pride in their neighborhood. They take pride in their schools. They begin to participate, where, when they are renters, they don't do that. So what we're doing by this program is strengthening America.

The other step that the President has taken has been the program of asking for $2.2 billion from the Congress as initiative for people doing single family building of homes in this country. And what does that mean? It simply means they will be given a lower income tax credit to build houses.

One of the biggest problems we have faced in this country is the affordability process. Can we afford to build homes here? Most people don't realize that before a home ever comes out of the ground in California, it's about $112,000 that you have spent on permits and regulatory barriers. So a person of a family of four making $50,000, it's almost prohibited for that person to buy a home on California.

So, we're saying, if we can give developers and builders incentives to cut down on the regulatory barriers that are faced in this country, then we might be able to address the needs of affordable housing. And even though the initiative is zeroing in on minority homeowners, we at HUD are looking for low and moderate income homeowners to help finance their home, no matter what color they are, or what race they are.

Mr. Lawrence: Another major initiative is to eliminate chronic homelessness. Could you tell us about the issues involved in it, and what's HUD doing to address these?

Mr. Jackson: First of all, I have to applaud to Secretary Martinez for bringing back the Inner-Agency Council on Homelessness. That council had been dormant for almost 12 years. He realized that 10 percent of the homeless population in this country is chronical. But they use about 50 percent of all the resources, whether it's from Health and Human Services, Agriculture, or HUD.

Unless we look at that from a holistic perspective, we are never going to resolve this problem. So what the Secretary did under the guise of the President is we configurated the Inner-Council on Homelessness, and brought in the Secretary of Human Services, the Secretary of Agriculture and said, "We must address this from a holistic perspective. You have a portion; I have a portion, but let's all together come together and address it."

Then the Secretaries set forth with the President's blessing to end chronic homelessness in 10 years. I think it can be done. But we can't do it in a piecemeal basis as we have done in the past.

So with recreating the Inner-Council on Homelessness, we set up an office, and that office is addressing all the problems that we face in this area of homelessness. And I think the stride we have made over the last year is just phenomenal since all three of these agencies have been working together.

Mr. Lawrence: Earlier you talked about the challenges of going to settlement, and you talked about the Real Estate Settlement Procedures Act. You described the problem, but I'm curious, can you tell us more about this effort?

Mr. Jackson: One of the problems that we are confronted with is, when we decide to buy or build a home, we don't get a clear picture of what closing costs will be of that home. And let me give you an example. I just finished building a townhouse. The Thursday before the Friday that I closed, I got a call from the closing mortgage banker, and he said that my closing costs, everything would be about $82,000. That afternoon I got a call about 3:30 or 4:00, and he says, "Well no, I was wrong. It's going to be about $86,000." Well, that morning at 7:30 I get a call and he says, "No, the closing cost is going to be $91,000."

What the Real Estate Settlement Procedure Act says is this: Let's tell the homebuyer, the home builder, exactly what his or her closing cost is going to be from day one, and let's not change it. And if we change it, then we've got to give that homeowner or the homebuyer a significant reason for changing that.

And so, we believe that once we set it up front, it's going to be very, very difficult. And I'm sure, Paul, if you bought a home, or anyone's bought a home, they've faced the same contingency problem that I face when closing my house. So even though it's been very difficult to get it to this point, and I will tell you this, that we had 240,000 comments on this one act, because I think you have some brokers and mortgage bankers who feel threatened by it. But it's not. It's only to be fair to protect those persons, so that once they buy the home, they know exactly what their closing cost is going to be. So we believe that this is the fairest way, and it will be a revolutionary act, if passed.

Mr. Lawrence: What else is HUD doing to promote affordable housing?

Mr. Jackson: Well, HUD has an array of programs, and those programs are the Community Development Block Grant program, which is the largest. And in that program, that is sent to cities to help them provide infrastructure, and also to leverage money to build both commercial, manufacturing; and we have what we call the Enterprise Zones; we have the Economic Development Zones. And we believe that if the money is spent right by the cities, they can leverage.

Then we have the Home Proms, which is basically helping people helping the states facilitate persons building and buying homes within their state. And I think that those programs in themselves will do a lot.

But the other program, as I talked about just a few minutes ago, is the low income tax credit which the President has asked for $2.2 billion to help developers build low and moderate income houses, homes in urban areas. We believe that making affordable housing attainable is the goal of this agency. And if we don't do that, we're not doing what we should be doing.

So with programs like Home, programs like the low income tax credit, programs like the Community Development Block Grant agency, it enables us to both allocate grants to the state, as well as to the local governments.

Mr. Lawrence: You've described important programs with noteworthy goals. How are you measuring their success?

Mr. Jackson: That's an excellent question. One way we're measuring success that has probably irked a number of cities and a number of housing authorities, is that housing authorities in cities who have had monies for 5, 10, 15 years that have gone unencumbered and unspent, we're beginning to take the money back. Under the HUD regulation guidelines, if a city or a housing authority has not obligated the money within a three year period of time, and spent the money within five years, we have the right to take the money back.

But HUD has never de-obligated money in most of our major cities and our major housing authorities. So what we're saying now, unlike in the previous administration, we're saying we're rewarding cities and housing authorities who spend their money in a very timely manner. Because we believe that if we can reward them, it will be an incentive for other cities to spend their money in a timely manner.

I will not call a city's name, but we just went in just two weeks ago and recaptured almost $35 million from a city who had had the money for over seven years, and had not expended not one penny toward the project that they had asked us to allocate the money for. Now, we received some resistance from their senators and their congress people, but we also got their attention. And they agreed, when we talked about re-capturing the money, they agreed to come in with a plan.

But what that has done is, a lot of cities who were sitting on money now are spending. And we believe that that's the way you should do it. So we're measuring it by the progress that we're making in people allocating and spending their money on the projects that they had asked us to fund.

Mr. Lawrence: Well let me ask you a question about something that has a long time frame. You talked about ending homelessness in 10 years. How will we have systems or people in place to do that over that long period of time? They'll change, but the goal will remain.

Mr. Jackson: Again, that's a very good question. I think the only thing that we can do under President Bush is to put the process in motion and hope that whoever comes behind the President at that point in time will continue the program that we put in motion.

As you know, there's not necessarily continuity or continuality in programs if you have a new president. Now I fully expect our President to be re-elected, but even with that, it still will not carry us into 2010. So whoever comes behind the President, hopefully they will see the merits in the program, and continue the program.

That's the hope. We believe that, by the time that we leave office, it will be institutionalized, and these programs will be addressing the needs and curing the problem that we set out to do.

Mr. Lawrence: That's a good stopping point. We've got to go to a break. Come back in a few minutes. We're going to continue discussing government management with Alphonso Jackson of HUD. How is HUD dealing with the issues of the President's management agenda? We'll ask Alphonso for his perspective when The Business of Government Hour returns.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Alphonso Jackson, Deputy Secretary of the Department of Housing and Urban Development. Alphonso, can you tell us about the management challenges that you and the Secretary faced when you first arrived at the Department?

Mr. Jackson: I don't want to be critical, but I want to be honest with you. From my perspective, as I've stated on a number of occasions in the President's Management Council, I do not think HUD had been managed very well. In fact, the problem that we were confronted with is that you had separate entities operating as if they were all HUD.

What is it that I mean by that? Well, you had the Community Development and Planning Division operating as if it was HUD. You had Public and Indian Housing operating as if it was HUD. There was no coordination between any assistant secretary and the deputy secretary. They were like little fiefdoms. So when you have little fiefdoms, you can't coordinate, period.

Our first task was to eliminate the fiefdoms. Secondly is to begin to say we must coordinate all of our activities so that the Assistant Secretary of Community Development and Planning understood the roll of the Assistant Secretary of Planning Development in Research. And they have to understand those rolls and see how they juxtapose with each other to make the agency work better.

That was our first task. In doing that, we were very successful because we have what we call the Assistant Secretary luncheon every Thursday. They meet together to discuss issues. And we have what we call the Executive Management Council which meets monthly to discuss issues and how they cross pollen with each other in this agency.

Then, what occurred after that is, is that the President's Management Agenda, as you know, was set by our President. This is a unique situation in the sense that our President is a manager. He has an MBA. And he said if we're going to run Government, it should be ran basically like a private corporation. But you can only do that if you have coordination between all of the Deputy Secretaries and the Secretary.

So the President's Management Agenda set out five initiatives, basically: human capital, improving our financial systems, improving our information and technology system, and improving the ability to carry government in a very fine and unique way.

We have been monitoring those issues for the last two years to make sure that our information technology system is much better than what it was. In fact, I hate to tell you this, that when we walked in there we had over 300 independent systems in information technology that did not talk to each other. That is unbelievable. Where, when I was in private life, I had one information technology system that talked to 3,200 people.

The other thing is that we had about 23 different financial systems, and the Chief Financial Officer didn't necessarily take care of all of those systems. So we had to coordinate that, and we're in the process of doing that.

So human resources, unbelievable. We had private little entities handling human resources for each one of the respective divisions. So we've had to coordinate that and say, "No, we have one human resource person that takes care of all that, and that's the Assistant Secretary for Administration, and the Chief Information Officer.

So it's been a very, very difficult task to coalesce all of these different entities to meet the President's Management Agenda, but we're doing it very well at this point. We've got a long ways to go, but we're much further than we were before.

Mr. Lawrence: You talked about when you and the Secretary arrived, the feeling of lots of stove pipes and lots of little groups that didn't talk to each other. And you described how you got them to talk to each other. You made it seem kind of easy. So I'm curious, were there management challenges, was there resistance, and how did you get people to work together?

Mr. Jackson: It was not easy. And I think that only in the last 18 to 20 months did we begin to see the process gel. For years, not only this agency, HUD, but other agencies, as I said, they operated as little fiefdoms. And it didn't matter whether it was Republican or Democrat, so I'm not critical of either one.

What was the issue is, is that once the Assistant Secretary or the General Deputy Assistant Secretary came in, some of the career staff would convince them that they should not have relationships with the other entities. Opposition was that can't be, because if we continue the way we're going to do it, we will still be the most troubled agency in Government.

So I set out basically to do something very simple: just to have Assistant Secretaries talking to each other; have General Deputy Assistant Secretaries talking to each other; and coordinating efforts between all of the different entities within the agency. Only when they realized I was serious did we begin to see things change.

It's like any other entity: they felt that after a while I would not pay any attention. One of the things that the Secretary and I came to the conclusion is this: as I said to him, and we agreed, we can't resolve every problem at HUD, but we can leave our legacy. So what I said, and he agreed, as the Chief Operating Officer, I would pick four or five major problems that we had in the agency the first year, and we would try to resolve those. And we did. We picked another four or five for the second year. And we resolved most of those. We picked five this year, and we resolved three of them. So even though we might still have problems in the agency, we're zeroing in on those problems.

The best example I can tell you is we've narrowed down the information technology problems that we've had, because we've taken down from 300 to about 210 systems. And we expect to do much better. Our financial accounting system is much better than it was the day we walked in there.

The Real Estate Settlement Act was a problem. But, see, my position is, is that you have to zero in on certain things. Otherwise you will be fighting fires and you will get no end results in the final analysis. And that's traditionally what has happened at HUD.

I can't speak for any other agency, but what we've decided to do, and I think why this Secretary has been so successful, is we've zeroed in on certain issues, resolved those issues, and continued to resolve those issues, even though we might have serious problems other places.

Mr. Lawrence: Let me take you into parts of the President's Management Agenda. In terms of sourcing, we know that HUD is actually trying to meet small business goals, which include doing up to, or maybe more, 50 percent of the HUD contracting with small businesses. Could you tell us about this effort?

Mr. Jackson: You know, it's really unbelievable that the small business guidelines are very clear. And those guidelines simply says that every agency in government should make every effort to do up to 50 percent small business procurement and contracting. And that's not a quota, not a set-aside. It just says you have to make an effort.

And it also says that, with a major contractor you should try to do up to 40 percent subcontracting with small, disadvantaged, 8(a), women-owned business. It doesn't say quota or set-aside. It says make the effort.

HUD had not made that effort. I mean, the bulk of our contracts that existed in that agency was basically to 11 major companies who had a very, very poor record of subcontracting and -- it was just unbelievable. It was just not there with women-owned, 8(a), Hub/small business -- just wasn't there.

Well, having worked for the President in Texas, and not literally being paid, but having been Chairman of the General Service Commission, the President had a firm belief, which I agree with, that we should practice affirmative access. And that is, people who are capable of doing he work should be given every opportunity to do the work, first with the state government, and that's exactly the way he felt with the Federal Government.

So my question to the staff is: why is it we're not doing more procurement with small businesses in this agency? And what most people don't understand is the bulk of business in this country is small business. It is not -- and if we had been doing business with large corporations for 10, 15, 20 years, that we means we have effectively closed small businesses out. So I said, "No." We need to find capable and competent small businesses, work with them, and when we can work with them, we do.

So, basically what we have done, where we've had these huge contracts for $30, 40, 50 million, we've de-bundled them. And the good thing about it is, is everybody now knows we've got some tremendous small businesses in this country that are performing very well for HUD, and can perform very well for any of the agencies in Government, if given the opportunity.

And I always like to stress, it's not a quota, not a set-aside, it's not about race, it's about giving opportunities to demonstrate their abilities to do work with the Federal Government. And it's worked very, very well.

The other part of outsourcing is this: it simply says where the work can be done outside better than it can be done inside, we should do it. HUD has a very unique situation in the sense that in 1995 we cut 6,000 workers out of a HUD of 15,000 people. And I believe that we need, at this point in time, to bring in house some of the work that we have competitively sourced out. Where we can, we will.

And I think in information technology it is probably better to outsource it. But in certain areas it is better to have in-house persons to do the work, and OMB and Congress has been working well with us.

Mr. Lawrence: How about in terms of some of the HR challenges you've faced?

Mr. Jackson: That has been very difficult, and we're very fortunate to have an Assistant Secretary in Vickers Meadows, who has had the experience of working for the President, both at the state level. So she understands his management style and understands exactly how we need to revamp our human resource.

We have set up what we call Succession Strategy, which we did not have in HUD. That is, HUD has the most aging workforce of any agency in Government. We could lose in three years, 62 percent of our employees. But we had no succession plan, because, again, if I might reiterate, they operated as if they had their own fiefdom. We have a succession plan.

Secondly, we had no plans for looking at where the help or the work was most needed. We've completed a study which was the re-allocation estimate apportionment of where we needed people in that agency. And that was done under Assistant Secretary Meadows.

So we are beginning to address the human resource needs. And that was one of the greatest criticism of the GA audit. We didn't have a succession plan. We didn't have a real human resource plan. And today they will tell you that they're quite pleased. So is OMB that we're moving forward.

Now I'm not going to sit and tell you that we've got it 100 percent in place. But I can tell you that it's probably about 56-57 percent in place. But when we walked in there, there was no plan at all to address the human resource needs in our agency.

Mr. Lawrence: Good stopping point. Let's go to a break. Come back after the break as we continue our conversation about management with Alphonso Jackson of HUD. How was HUD involved in the events of 9/11, and what roll does it have in Homeland Security? We'll ask Alphonso to bring us up-to-date when The Business of Government Hour continues.


Mr. Lawrence: Welcome back to The Business of Government Hour. I'm Paul Lawrence, and this morning's conversation is with Alphonso Jackson, Deputy Secretary of the Department of Housing and Urban Development. You mentioned that a couple times in our conversation, as Deputy Secretary you are a member of the President's Management Council. Could you tell us about the Council?

Mr. Jackson: Sure. As I said before, this President believes that each one of the agencies should be managed as if we were in a private enterprise or private life. He empowers the Management Council, which is composed of the Deputy Secretaries as the Chief Operating Officers to give him advice as to how the Government should be ran.

We meet monthly with the Director of OMB and the Deputy Director of OMB, and we go over critical issues that are facing this economy and country. And we try to give ideas and thoughts to the President as to how we can best improve the delivery of services from every agency in this Government. And that's basically what a Chief Operating Officer does.

And he takes that information, looks at it, and comes up with agenda items as to where our country should be going. It's quite different than previous administrations in the sense that the information that we talk about really plays a roll in the decision that our President is making as to how our country should be ran, and the delivery of services that we give people in this country.

Mr. Lawrence: I was interested to learn that HUD's played a roll in rebuilding the area surrounding the World Trade Center after the events of 9/11. What specifically did the department do?

Mr. Jackson: Well, the first thing that we did is put a 90-day moratorium on all foreclosures of FHA homes, which is Federal Home Administration, homes in New York City. And under that we provided relief to the people.

We also identified temporary housing for victims in New York. And we also have said that under the Soldier and Sailor Act, we've asked that we lower the interest rate on loans to especially those soldiers who are in Iraq, under 6 percent.

But I think the most important thing that we did, other than that, was we immediately gave New York City $15 million in emergency aid to help house those persons who had been forced out of their homes or out of their condominiums.

We gave a $700 million grant to stimulate the economic recovery of New York City, and that's the largest single grant ever given by the Community Development Block Grant agency in Government.

In addition to that, we allocated $2 billion to be shared between the Lower Manhattan Development Corporation and the Empire State Development Corporation to help deliver services to New York City. That's the roll that we have played in New York City. Basically, financial, helping them come back, because it was a very devastating blow.

Paul, I had the unique fortune of being there. I think the first person that the President sent was Joe Allbaugh who was over at FEMA, and I was the second person. Joe went there the day after the bombing, and I went there the Friday after the Tuesday of the bombing. And it was clear to me at that point in time that there was a great deal of devastation, and that we had to play a major roll, not only financially, but really to help them rebound. It was a very, very unique site. It was the first time I've ever had the ability to really understand what war is like, once it occurred on our own soil.

Mr. Lawrence: How does HUD interact with the new Department of Homeland Security?

Mr. Jackson: At the present time, I would say that we will interact with Homeland Security very similar to the way we interact with Federal agencies. If there are certain things that they need us to do, Secretary Ridge will confer with Secretary Martinez, and we will carry those out.

As of to date, we've been very supportive, like most of the other departments.

Mr. Lawrence: What are the next challenges on the horizon for the Department?

Mr. Jackson: The largest challenge that we face, from my perspective, is the ability to continue moving forward so the agency will have a single mission: that is, to provide decent, safe, and affordable housing. But at the same time, have all the Assistant Secretaries and everybody in that agency in one mind and one thought, rather than what we inherited, which was many minds and many thoughts. If we do that, then I think we can institutionalize many of the things that we're doing to cure many of the problems that we inherited.

And again, I'm not going to label any one person as to why we have the problems. I think it was just a matter that the agency had taken on a life of its own, and it had not been managed very well.

So I think the real future issue is the management of HUD. And if we continue to do that, whoever inherits HUD after Secretary Martinez, will have a functional agency that will carry out the mission. And its mission is just simple: to provide decent, safe, and sanitary housing for lower and moderate income people in this country.

Mr. Lawrence: What's your vision for the Department over the next five to ten years?

Mr. Jackson: Well, I've enunciated one of it, and I agree with the Secretary: we should make every effort to end chronic homelessness. I think that is important.

Secondly, I think if we do that the agency will have served this country very, very well.

Secondly, I think my future is, is that we have more cooperation between the agencies, as we're having now with Health and Human Services, Justice, and with Agriculture, because I believe that if we're serving one President, we should be in accord of how to best deliver services to the American people. And we should not be delivering those services piecemeal.

So I do believe that, in the final analysis, if we can work together on the President's Management Agenda, and deliver the services that we should, this country will be much better off.

Mr. Lawrence: When you look out to the future, do you ever envision the day when there won't be a HUD, if homelessness is solved, and home ownership is driven up. Could there possibly be a time when all the goals are met?

Mr. Jackson: That would be very difficult for me to see. I think that there will always be a need for Housing and Urban Development. Will it be in the same form that it's in today? Probably not. But there will be a need. I don't think that Health and Human Services 20 years from today will be delivering the same kind of services that it's delivering. I don't believe that Agriculture will be doing the same thing. It's an evolutionary process. So I do think that there will be rolls. It's whether they will be in the traditional rolls as we know them today, and I don't think necessarily that will be. Because, you know, technology is changing, delivery services are changing. People are changing, and I think that in the final analysis, the Government will have to change with the people. I mean, I look back now and I realize that at the time Great Society was put in place, you had a different vision. But we look back now, and we realize the Great Society was not a success. But a t the time we really believed that it was going to be a success. So, yes, I think it's an evolutionary process, and the agencies will be needed, it's just how they will function.

Mr. Lawrence: You spent a lot of time during our conversation today talking about communicating ideas, programs, and issues. Just from a tactical level, how do you communicate to 9,000 people and all the other stakeholders? You can't meet with them all, one-on-one. How do you get the word out?

Mr. Jackson: You know, that's not true. You don't know how much travel the Secretary and I have done over the last three years going to our local and regional offices. Many of the persons in our local and regional offices had never met a secretary or a deputy secretary.

But one of the things the Secretary and I agreed upon is that if you're going to work with and for people, they should know who you are and what you stand for.

We brought all of our managers in six months ago, which had never happened before in any place in Government -- 500 of them. And we laid out the President's Management Agenda and the Secretary's Management Agenda, and says this is what we should be doing with our staffs in each respective state, each respective region. And it worked well.

Many of the people were so elated because they had never had a chance to come in and get directly what the President's Management Agenda, the Secretary. And in the end, they took it back to their persons.

And we go out in the field on constant basis meeting with them. And I would venture to guess that we have met with, probably between the Secretary and I, 6,500 of the staff, because we believe that the people in the field make agency work. And if they don't have hope and perspective, they're not going to do a good job. And our job is to go out and give them hope and perspective, and let them know that we appreciate the job that they are doing.

Mr. Lawrence: What advice would you give to a person, perhaps a young person, interested in a career in public service?

Mr. Jackson: I would tell them to stay eager. I think serving your government is the greatest thing in the world. And a lot of people have looked at it with disdain. I don't. I would not change coming to serve our country and President Bush for anything in the world at this point in time. Was I eager to come into government, no. But I do know this: that the two and a half years that I've been at HUD, I am absolutely convinced that some of the best workers in the world are in Federal Government. What they need is the ability to know that they're appreciated and the incentive to do a very good job, rather than consistently being criticized by persons who are in here for a short period of time. And I was very guilty of that, too. But at the same time I had not had the experience that I have today to work side by side with so many good employees, so many great employees, and so many dedicated employees to do a good job for our country.

Mr. Lawrence: Alphonso, we're out of time. I want to thank you for being with us this morning.

Mr. Jackson: And if you, Paul, let them know that: they can learn more about HUD if they choose to.

Mr. Lawrence: This has been The Business of Government Hour, featuring a conversation with Alphonso Jackson, the Deputy Secretary of the Department of Housing and Urban Development. Be sure and visit us on the web at: There you can learn more about our programs and research. And you can also get a transcript of today's very interesting conversation. Again, that's: This is Paul Lawrence. Thank you for listening.

Alphonso Jackson interview
Mr. Jackson is the Deputy Secretary for Department of Housing and Urban Development

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