Julian Castro's (Latest) Questionable Finances

"Though his hatred is covered by deceit,
His wickedness will be revealed before the assembly."
Proverbs 26:26

Because previous questionable deals with the Obama administration and skimming from campaign funds wasn't bad enough, Julian Castro's HUD nomination has brought a new round of scrutiny on his finances.

First up, Byron York of the Washington Examiner:

San Antonio Express-News columnist Brian Chasnoff recently reported that Castro made more than $200,000 in 2013. The bulk of that, Chasnoff noted, was a $127,500 advance for the memoir that Castro is writing. More came from the speaking fees that were a product of Castro's post-convention visibility: $12,750 for one speech, $16,250 for another, $8,500 for another, and so on. "When I asked [Castro] how much he was charging in speaking fees, he declined to comment," Chasnoff wrote, explaining that the figures came from a recent financial disclosure form.

That's how Castro supports himself and his family now. But the seed money for Castro's time in the mayor's office -- he was first elected in 2009 -- was a controversial seven-figure "referral fee" that Castro, a Harvard-educated lawyer, received from a well-connected trial lawyer and Democratic donor in a personal injury lawsuit in which Castro may or may not have played a major role. [Emphasis added.]

The case stemmed from a 2006 drunk driving accident in which three people were killed. The short version, according to accounts in the San Antonio Express-News, is that the drunk driver was behind the wheel of a truck owned by an oilfield services company. (The fact that a company's vehicle was involved provided a big source of money for a potential damages award.) One of the victims, a man who lost his mother, wife, and son in the crash, knew Castro and chose Castro's small firm to represent him in a suit against the oilfield services company. Castro then referred the case to a much larger firm, headed by Mikal Watts, a prominent personal injury lawyer and Democratic contributor. Watts won the case, and a big award, and Castro was paid a seven-figure "referral fee" for bringing the suit to Watts' firm. It's not clear whether the fee was on the high side or low side of the seven-figure range; the figure has not been disclosed. In response to questions about what Castro did to earn the money, both he and Watts have said he played an important role in the case. (Watts, meanwhile, has been busy with allegations of misconduct in lawsuits stemming from the British Petroleum oil spill. The New York Times reported that he was accused of "claiming thousands of people as clients who were either unwitting or did not, in fact, exist." Federal agents served search warrants at his San Antonio offices last year.)

In 2009, the Express-News reported, Castro loaned his campaign $215,000 in his first run for mayor. Last year, he told KENS that, "I do have savings from my law practice, and there are some things I will do to try to make some income. I am writing a book and will start to speak for a fee when I can. But I have to make sure it does not take away from the business of San Antonio and the responsibility I have here."

Next, of all places, Politico:

San Antonio was awarded $8.6 million from HUD in 2008 as part of the national Neighborhood Stabilization Program. The city used the money to buy, refurbish and resell homes left vacant after eviction and to also renovate large apartment complexes in the city that were rented out to lower-income tenants.

The HUD IG audited how the money was being spent from 2009 to 2011 and found that city officials had awarded $2.5 million in renovation contracts without a competitive bidding process. Castro, 39, became mayor in May 2009, a job he continues to hold.

The report also found that the city misused roughly $1.1 million when acquiring and fixing properties because some of the properties were not put toward housing lower-income families as required by HUD.

The IG found that the city failed to take certain steps to review the contracts with developers and that officials were “apparently unaware” of certain affordability rules.

....

The initial round of NSP grant money was approved by Congress in response to the escalating amount of foreclosures at the height of the financial crisis in 2008.

Castro will ultimately get confirmed, but it's going to be fun seeing what else comes out during Castro's confirmation process.