DES MOINES, Iowa | While working in private business, acting Attorney General Matthew Whitaker walked away from a taxpayer-subsidized apartment-rehabilitation project in Iowa after years of cost overruns, delays and other problems, public records show.
The city of Des Moines ultimately pulled an affordable housing loan that Whitaker’s company had been awarded, and another lender started foreclosure proceedings after Whitaker defaulted on a separate loan for nearly $700,000. Several contractors complained they were not paid, and a process server for one contractor could not even find Whitaker or his company to serve him with a lawsuit.
After being appointed last week by President Donald Trump to the nation’s top law enforcement job, Whitaker’s history as a former federal prosecutor, Republican Party loyalist and critic of special counsel Robert Mueller’s investigation has come under scrutiny, as have some of his business dealings.
Whitaker is expected to return to his home state Wednesday to speak at a conference at a downtown Des Moines hotel, about two miles from the Ingersoll Avenue apartment building that he once saw as an investment opportunity. After years of rising costs, Whitaker stopped work on the project by early 2016 and sold the building months later.
City officials raced to see the project completed to avoid losing federal money, and contractors filed liens seeking compensation for more than $32,000 in unpaid work.
A lawyer who represented Whitaker’s company did not return a phone call seeking comment. A Department of Justice spokeswoman said she was looking into the matter.
A company formed by Whitaker and two partners, MEM Investments, was awarded a $166,000 city loan to renovate the vacant three-story complex in 2012, through a Department of Housing and Urban Development grant program to promote affordable housing. A reorganization in 2014 made Whitaker the company’s sole owner.
All but $25,000 of the loan would be forgiven as long as the project was completed by 2017 and half of its 22 units were restricted to low-income tenants for five years. But what was once thought to be a $400,000 project for lead testing and site improvements became more expensive as additional work and damage piled up, records show.
Whitaker refinanced his mortgage on the building to get more funding and put an undisclosed amount of his own money into the project.
