HUD Acting M&M Director On Vacation Only Days On The Job

Why Is HUD Protecting Purdy Enterprise? Should We Follow The Money?

The protection of Purdy Enterprise and Mitchell R Davidson is in high gear at the US Department of Housing and Urban Development (HUD). Craig Karnes, recently promoted as Assistant Chief Procurement Officer for Field Operations, appears to be unfazed that the provisions of Mitch Davidson’s anti whistleblower contract violate the Federal Acquisition Regulations (FAR) and the False Claims Act. Not surprising, as the entirety of the Purdy Enterprise Awards are shrouded in a cloud of questions pertaining to federal collusion accusations. Moreover, though, it would appear that HUD is doing its best to ensure that the illegal Purdy Enterprise non compete provisions remain in play FOREVER. That’s right. Work for Purdy Enterprise and you may NEVER — yes even after you leave Purdy Enterprise — compete against they in pre or post conveyance contracting. Foreclosurepedia has waited over a week for HUD to respond to these allegations and all the while HUD has continued to protect Purdy Enterprise while Minority Females and Labor are unable to participate upon federal contracting. Bureaucracies are always self serving, and the reality is that when attacked, the fiefdoms are brought into proper focus. And it is this focus which HUD is upset by. The intersections of race and federal contracting is best exemplified by HUD’s refusal to address the ALL WHITE Purdy Enterprise leadership’s attacks upon the civil rights of Minority Females and Labor.

Only a short time ago, Kimberlee Satterfield was named as the Acting Director of the Southern Field Operations, replacing Craig Karnes. And within days, Satterfield, a Chicago native, decided to take a week’s long vacation. Here is what one is greeted with when attempting to contact her,

Thank you for contacting our office.  I will be out of the office Friday, August 11 2017; returning on Wednesday, August 16, 2017.

Amazing. Here you have the Management and Marketing (M&M) Field Service Manager (FSM) 3.10 roll out on par to be one of the worst HUD debacles in recent memory. Innotion Enterprise is facing a direct challenge upon their SBA 355 which places 2 Regions in jeopardy and both Amos Alexander and Al Espinoza in danger of going to prison. Best Assets do not appear to be capable of performing upon their Award. Purdy Enterprise purposefully removed mandatory whistleblower provisions in their Contracts with Minority Females and Labor and additionally banned all Subcontractors from competition on pre or post conveyance work should they be ignorant enough to sign those Contracts. And All the Usual Suspects are gathered round the fires burning every piece of legitimate proverbial paper which might connect they to the single largest financial conspiracy in the history of HUD.

Here is what Craig Karnes and Kimberlee Satterfield are trying to keep in play for Purdy Enterprise, in violation of the False Claims Act and the FAR’s,

Subcontractor agrees and commits to not disparage, denigrate, defame, discredit, dishonor, injure, or otherwise communicate negatively about PE, directly or indirectly, while this Agreement is active and thereafter. This clause applies to both oral and written communications, including social media and other online type postings. PE will be entitled to damages and reasonable attorney fees in the event that Subcontractor violates the requirements of this section. The only exception for this section shall be if Subcontractor makes truthful statements about PE when compelled by court order, legal proceeding, or otherwise required by law.

Minority Females and Labor will be sued if they reach out to law enforcement or either the state or federal government to blow the whistle on waste, fraud, or abuse. In fact, Foreclosurepedia reaffirmed its objections to this to Craig Karnes and Karnes, once again, refused to address the issue. To me, this is yet one more example of why the communications between Karnes and Davidson should be made public.

Now, whether or not Purdy Enterprise should have the ability, under federal contracting, to violate Subcontractor’s First Amendment rights, is up for debate. What is not, is the section highlighted in yellow, above. Purdy Enterprise is stating that no matter what, a Subcontractor will be sued if they reach out to the US Government, in any way, shape, or form, to report criminal activity as a whistleblower. How far is Craig Karnes willing to go to protect his friend, Mitch Davidson, and Purdy Enterprise? Glad you asked that question as it also includes how far is Kimberlee Satterfield willing to go to protect actions taken by Craig Karnes after she had the red carpet rolled out to replace him,

FAR 52.203-18 provides that by submission of its offer, “the Offeror represents that it will not require its employees or subcontractors to sign or comply with internal confidentiality agreements or statements prohibiting or otherwise restricting such employees or subcontractors from lawfully reporting waste, fraud, or abuse related to the performance of a Government contract” to a government representative.

FAR 52.203-19 prohibits a contractor from requiring its employees or subcontractors to sign or comply with such provisions in an internal confidentiality document or statement. Additionally, the contractor must notify current employees and subcontractors that prohibitions and restrictions of any preexisting internal confidentiality agreements or statements covered by the clause, to the extent disallowed by the clause, are no longer in effect.

Well over a week ago, Foreclosurepedia reached out to both Karnes and Satterfield requesting that action be taken against Purdy Enterprise for their violations of the Federal Acquisition Regulations (FAR). The reality is that whether it is myself or anyone else, Minority Females and Labor are unable to sign Contracts with Purdy Enterprise until HUD Secretary Ben Carson forces Karnes and Satterfield to enforce the law. And that may be more difficult to do than Secretary Carson believes. Entrenched bureaucracies are loathsome to make changes which may negatively impact the way that they proverbially butter their bread.

Craig Karnes and Ivery Himes, FHA Director, Office of Single Family Asset Management, had this to say in their most recent attempt to separate pre and post conveyance foreclosure actions,

It is not that HUD is unsympathetic to abuses by the large national contractors. However, HUD’s agreement is with the Mortgagees directly, and we do not even have Privity of Contract with the large nationals, much less any of their subcontractors.  On our M&M contracts, post-conveyance, HUD has entered into direct agreements with the FSM and AM contractors selected to service the individual areas.  This allows us much more flexibility to dictate the terms and hold those FSM/AM servicers more accountable.  On the pre-conveyance side, we are left holding the mortgagees accountable for the failures of their contractors/subcontractors. Any intervention that goes beyond the mortgagees exposes HUD to risk that both Ms. Himes and I have been advised by HUD’s attorneys not to take, as it could expose the agency to significant legal risk.

To hell with the Rule of Law is how I read that statement. And while I appreciate the fact that everyone appears to be protecting Richard Dunne, HUD Headquarters in Washington, DC, due to his statements in the John Ward NAMFS 2003 HUD Memo, it is really starting to get old. What I do know is that for nearly two years, it has felt like Foreclosurepedia has been on a Little Sambo adventure chasing our tail. The interesting item is that there have been juxtaposed lines of communication studying the matter and they are diametrically different from each other. The HUD Office of the Inspector General (OIG) is a separate entity and HUD OIG is not swayed by the Don’t Rock The Boat crew huddled in Atlanta.

In fairness, Karnes had this to say, earlier this morning,

My intention was never to send you on a “wild goose chase” in regards to pre-conveyance.  I’ve attempted to remain as up front about the situation as possible.  While I had some indication of what the likely outcome would be, I didn’t think it should stop you from exploring all avenues and possible recourses.  Ultimately, I did put you in contact with the right decision makers relative to both the M&M side as well as the Pre-Conveyance Mortgagee Letter side.  Phil’s contact to Ivery and persistence forced the right questions to be asked, and did spurn a decision, even if it wasn’t the decision that either of you wanted.  FWIW, I did forward the response to Phil on to both the DCPO and CPO (my immediate chain of command), and Ivery indicated to me that she has done the same.  If the issue does go up to the Secretary’s level, it will get additional scrutiny.  It may not change the agency position, but at least then you will know that it has been vetted at the highest levels.

Secretary Carson is learning, first hand, that there are massive pockets of resistance to change within HUD. And while Secretary Carson thought he was capable of striking a mighty blow for the Trump Administration by initiating lock changes to combat National Association of Mortgage Field Services (NAMFS) Members publishing the HUD Master Key Codes and selling them for One Dollar each, Satterfield and others are dragging their feet when it comes to forcing the changes.

The tragedy of the past two years which Foreclosurepedia has dedicated to bringing information forward to Karnes and HUD is that whistleblowers whom Karnes worked with have been given a bill of false goods. And if Kimberlee Satterfield is any example of how the Management and Marketing (M&M) Contract will operate, going forward, I am advising Subcontractors to file liens before ever attempting to reach out to HUD Atlanta. Regardless of what your Contracts say, the Prime Vendors are bound to a Contract with HUD which states those liens must be resolved in ten calendar days — period. And while many may say that this is a heavy handed tactic, Satterfield runs the M&M now and for two weeks has refused to even reply to a single email.

HUD has turned its back upon Minority Females and Labor. The promotions and vacations; the visceral silence upon actions taken by those protected like Purdy Enterprise, is a clear indication that HUD wants no problems in their Whitetopia they are creating!

Karnes and Himes continue to wiggle around, depending upon whom they are speaking with. Bearing in mind, these were all answers Karnes could have given directly to Foreclosurepedia, Karnes chose a more lateral route,

I use the term “legally” in a broad sense, in that you will not find some civil or criminal law dictating that HUD may not intervene.  Rather, the basis for legality stems from the common law doctrine of Privity of Contract, which dictates that the Federal Government cannot intervene in prime/subcontractor disputes absent some direct agreement to do so.  Over time, there have been many legal precedents and some regulation changes to allow limited subcontractor intervention (e.g. Miller Act, Prompt Payment Act, and Service Contract Act – when sponsored by the Prime).  However, none of the current regulations allows us the flexibility to intervene in the proposed scenario without escaping the risks associated with the Doctrine of Privity of Contract, which as a general policy is carried out across the Federal Government.

Allowing Purdy Enterprise to continue with their current Non Disparagement Clause violates the False Claims Act (FCA) and the FAR’s — Craig Karnes and Kimberlee Satterfield are well aware of this. The FCA was enacted in 1863 during the Civil War in response to false and fraudulent claims by contractors to be paid by the Government for defective and shoddy war material. The FCA prohibits any person from making a false or fraudulent claim for payment to the United States and from causing such a claim to be made. In addition to defense contractor fraud, many cases under the FCA have involved the making of false or fraudulent claims by healthcare providers, drug companies and others. The Act’s prohibition applies to claims for payment for goods or services whether under a federal contract, grant or otherwise. Along with the Government itself, private individuals play vital roles in enforcing the False Claims Act. The Act’s prohibition of false or fraudulent claims for payment may be enforced in suits filed by the U.S. Attorney General which in many instances are based on information provided by individuals. The prohibition may also be enforced in suits, known as “qui tam” suits, brought in the Government’s name by private persons. In many instance, the individuals with information leading to an FCA suit are employees who find that their employers may be submitting false or fraudulent claims and who proceed to blow the whistle. The FCA encourages private persons to provide information regarding false or fraudulent claims by allowing them between 15% and 25% of any settlement or judgment on behalf of the Government in a suit under the Act.

The FAR Council has published a Final Rule, effective January 19, 2017, prohibiting the use of appropriated or otherwise available funds for any contract, grant or cooperative agreement with an entity that requires its employees or subcontractors to sign internal confidentiality agreements or statements that prohibit or otherwise restrict the lawful reporting of fraud, waste or abuse to a designated investigative or law enforcement representative of a federal department or agency authorized to receive such information, such as an agency Inspector General.  This Final Rule implements Section 743 of the Consolidated and Further Continuing Appropriations Act, 2015 (Pub. L. 113-235), and anticipated similar successor provisions in future appropriations acts and continuing resolutions.

I am not sure what part of the aforementioned language HUD misinterpreted. And maybe they didn’t misinterpret it. Maybe, just maybe, it is Christmas in July in Atlanta. I suppose that it becomes tedious attempting to figure out when to take the next vacation?!

The Final Rule adds new FAR Section 3.909, “Prohibition on contracting with entities that require certain internal confidentiality agreements,” and two new clauses (FAR 52.203.18 & 19) that Contracting Officers must include in all solicitations and resultant contracts, and all modifications to any existing contract(s), obligating FY15 or subsequent year funds, other than personal services contracts performed entirely by the contracting individuals. The first of the new clauses sets forth the statutory prohibition, makes clear that the prohibition does not contravene requirements applicable to the non-disclosure of classified information, and addresses the need for and impact of contractor compliance representations.  The second clause sets forth contractors’ affirmative compliance obligations.

See, there is that pesky language wherein HUD is responsible to ensure that both FAR 52.203.18 and FAR 52.203.19 were implemented. What that means in layman’s terms is that both Karnes and Satterfield are, at best, guilty of deliberate indifference when they gave Karnes’ friend, Mitchell R Davidson, a pass with respect to the whistleblower provisions in the Purdy Enterprise Contract. At worst, well, that is a matter I leave to HUD OIG to investigate.

Moreover, the substantive requirements in FAR 52.203-19 are explicitly required to be flowed-down into all subcontracts at all levels (FAR 52.203-19(f)).  In this regard, “subcontract” is broadly defined as any contract defined in FAR 2.1 entered into by a subcontractor to furnish supplies or services for performance of a prime contract or subcontract, and includes, but is not limited to, purchase orders (FAR 52-203.19(a)). “Subcontractor” is similarly broadly defined to “mean any supplier, distributor, vendor, or firm (including a consultant) that furnishes supplies or services to or for a prime contractor or another subcontractor.”

I know how Karnes loves to get all out in the weeds about things — Doctrine of Privity. The language above is pretty clear even to the untrained M&M Professional.

In addition to not entering into new employee agreements or making statements violating the prohibition, contractors must affirmatively notify their employees, through normal business communication channels, such as e-mail, that any such limitations in any pre-existing confidentiality agreements or policy statements are no longer in effect and will not be enforced (FAR 52.209-19(c)). This language means that contractors are not required to review and revise existing agreements and statements. Instead, they may simply issue what the Final Rule terms “a blanket notice of non[-]enforcement” as to any prior inconsistent agreements or statements. FAR 52.203-19(d) provides that submission of an offer constitutes a representation (i.e., an implied certification) that the offeror is in compliance with the new requirements.  An offeror not able to make this representation is ineligible for award (FAR 3.902-2(a)).

This should be pretty unambiguous to Craig Karnes and Kimberlee Satterfield. The only reason I am capable of formulating why both would refuse to enforce the law is that they are involved in a kickback scheme with Purdy Enterprise. A simple investigation by HUD OIG or perhaps the illustrious Kevin Simpson, HUD should clear the air.

In response to comments on the Proposed Rule, the FAR Councils clarified several issues in the Final Rule, including that (1) the prohibition extends to all employees, not just those specifically working on a Government contract, (2) the covered confidentiality agreements exclude confidentiality agreements arising out of civil litigation or entered into at the behest of a Federal agency, (3) the Rule does not require retrospective representation, and applies only to “future” internal confidentiality agreements or statements restricting the reporting of waste, fraud or abuse related to the performance of a Government contract, (4) the required contractor non-enforcement notice need be given only to current employees and subcontractors, and (5) the purpose of the “designated investigative or law enforcement representative … authorized to receive such information” language is to eliminate disclosures to unauthorized persons. The Rule does not address disclosures to Congress.

Mitchell R Davidson was present at A2ZFS when a similar Patriot Act type of Contract Demand was issued out to Subcontractors. It came directly from Sarah Lee, their General Counsel, whom I spoke with, at great length. What is important to note is that while the requirement for Subcontractors allegedly became voluntary, it remained in full force and effect with respect to their employees. If you note the highlighted area above, I am positive that Purdy Enterprise will have language muzzling their employees and attempt to keep it in place as they are with Subcontractors which would violate the provisions of the FAR.

For years, the HUD M&M Program has been able to skirt the law. And while window dressing has been employed, the reality is that nothing has changed unless Foreclosurepedia has waged an all out war. A prime example is that Craig Karnes continued to allow the illegal electrical backfeeding procedures to remain in play which placed the lives of millions of Americans at risk. Foreclosurepedia partnered with the State of New Jersey to bring that to an end in the HUD M&M FSM 3.10 offering. Ironically, though, Karnes refused to instruct any Prime Vendors, like BLM Companies, to cease and desist from the illegal practice. Why the recalcitrant behavior of a government civil servant? Why would anyone resist obeying the law — the very law in which those within the M&M Program should have already understood?!

It is a sad footnote in the dark annals of the M&M Program. Money buys influence and power is the only way I am capable of framing my beliefs.

Many will scratch their heads and wonder why in the world Foreclosurepedia would put Craig Karnes and the new HUD M&M Princess, Kimberlee Satterfield, on front street. The reality is that neither of they are properly situated to assist Minority Females or Labor. And the reality is that no matter what Secretary Carson believes, unless and until a full scale investigation of the HUD M&M Program is conducted with respect to not only these claims, but the illegal charge backs upon FHA insured, foreclosed properties, nothing is going to change. Unless Secretary Carson takes the pro active step of bringing to an end the Copeland Act kickbacks — the mandatory discounting required by all National Association of Mortgage Field Services (NAMFS) members — the fact of the matter is that the Mortgage Field Services Industry will continue to remain the cesspool that it is. Any hopes of Making America Great Again fall short, with respect to HUD, unless and until Secretary Carson takes a stand.

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