The nation's fourth-largest housing authority spent lavishly on gifts for managers and a party with belly dancers, and its executive secretly spent more than $500,000 in housing authority funds to settle sexual harassment claims, but it allegedly ignored complaints of unsanitary conditions that nearly killed a 12-year-old resident.
The excesses of the Philadelphia Housing Authority, however, are not unique. As Nightline found in a joint investigation with the Center for Public Integrity, the federal government's low-income housing programs, which cost taxpayers $26 billion a year, are plagued by theft, mismanagement and corruption at local levels, including millions spent on housing for sex offenders and dead people, and all too often fail the 3 million families who rely on them for a clean, safe place to live.
In Philadelphia, under the leadership of former executive director Carl Greene, the local housing authority spent $17,000 for a 2006 event, including $1,200 for a troupe of belly dancers. Photos of the event, obtained by ABC News, show Greene dancing with the exotically dressed women. A Philadelphia Housing Authority (PHA) spokeswoman said the event, which also included yodelers and karaoke, was a part of the housing authority's "diversity awareness" training.
The same month, a 12-year-old girl living in the city's federally-subsidized housing suffered a near-fatal asthma attack after, her mother says, poorly trained housing inspectors failed to properly check her home for dangerous black mold.
"I'm telling them over and over again that these problems are going on and nobody's fixing anything. It's like they ignored everything I said," said Angelique McKinney, the girl's mother.
Greene also used housing authority funds to buy gifts, including a $16,000 purchase from Nordstrom for $800 Tumi travel bags for himself and 19 of his top managers in 2009.
"For 12 years, 13 years he's had free reign at the housing authority, and I can't explain it," said Michael Pileggi, a former housing authority attorney who now represents former PHA employees suing Greene and the housing authority. "It appears there was no fiscal oversight."
Greene was ousted from his $306,000 per year job in September after the housing authority's board of commissioners concluded that he was a "true serial sexual harasser" who had secretly paid more than $500,000 in housing authority funds to settle harassment claims against him.
The housing authority, which receives most of its annual budget of $345 million from the federal government, has attracted the scrutiny of Congressional and federal investigators as a scandal involving waste and misconduct allegations unfolded this fall.
The FBI and the Inspector General of the federal Department of Housing and Urban Development (HUD) are now conducting probes into housing authority activities.
"HUD was not overseeing it the way that they should or this guy would not be in this job," said Sen. Chuck Grassley, R-Iowa. Grassley's interest in Philadelphia is part of a larger inquiry into HUD's oversight of the nation's 3,200 public housing authorities.
"We expect the agency in Washington, D.C., ought to be making sure that every taxpayer dollar is spent in a responsible way," said Grassley. "And it seems to me that we have not had proper oversight."