The Poverty Industrial Complex

by April 23, 2012 0 comments

In my last article, I wrote about the abuses of Section 3 of the HUD Act.  The billions of dollars that are supposed to be used for job training and business development for people living under poverty are constantly being rerouted to the wealthy and greedy.  This is just the tip of the iceberg. Nearly 1,200 cities, counties and housing authorities do not comply with Section 3 nor will they even bother filling out their required annual reports.  Many fill out the reports but are not in compliance (no recipient is in compliance as of this date) but this group defies even completing the form.  It is total arrogance.  To see this list of resisting recipients go to

Now let’s examine another vehicle of this Poverty Industrial Complex. This one falls under the Department of Health and Human Services.  HHS is a giant bastion for poverty assistance.  Its annual budget approaches $100 billion per year.  One of the many programs managed by this agency is the Office of Community Service (OCS), which funds billions of annual dollars to states, counties, cities and other grant applicants in a fashion similar to that of Section 3. The majority of these dollars that are supposed to uplift people and get them out of poverty actually feed coffers of greedy operators and at the expense of those who are supposed to receive the benefits.

My first experience with this program was indeed shocking and disappointing. It was 1991 and my wife, Kay, and I were living in her hometown of Indianapolis.  We had just started the Hoosier Minority Chamber of Commerce to address the Black business disparity of the city.

One day I was driving down Indiana Ave. This neighborhood was targeted for gentrification (changing a Black neighborhood into a White one).  I looked at a billboard sign that read: “Thanks to the Health and Human Services Agency and the Hoosier Minority Chamber of Commerce.”  The Madame C.J. Walker Development Authority was thanking us for our support of a new office building.

I was dumfounded and called their office.  I asked why were they thanking my association.  The response was “just your general support of the community.”  Actually, they were trying to make this a Black thing which it wasn’t.  I then asked why was HHS involved in this.  The response: “They gave us an OCS grant.”

Undeterred, I called HHS in Washington, D.C. and reached OCS.  I inquired about the recent grant given to the Madame C.J. Walker Development Authority.  They told me it was a normal grant they give to create jobs for people who are long-term unemployed and living in poverty.  I thought “great” but where are the jobs.  Coincidentally, my dentist had recently moved into the new office building.  Through her I found out that the only Black employees in the whole building were her workers and none of them were new nor were receiving grant money for payroll.  In fact, they pleaded with her to move her office into the building so that they could have one Black-owned business in the place.  They gave her six months of free rent for moving in.  I shiefted into full investigative mode.

The office building was erected to house the expansion of the School of Optometry for the campus of Indianapolis–Purdue University.  It also housed the expanding office of a White-run law firm with close ties to the governor of Indiana.  Not one person living in poverty and certainly not a Black found employment through the awarding of this grant.  I pressed the D.C. headquarters of OCS and Senator Richard Lugar’s [R-Ind.] office for aggressive involvement.  That was a mistake.

I finally pressed through the Freedom of Information Act to receive a copy of the entire file on the OCS funding of the building.  Their response:  “Sorry but the file is apparently lost and we cannot supply you with anything.”  At first, I took it as an insult but then I realized there was a message here. This was a common act of fraud and abuse of tax funded money.  This racket was not going to get broken up by an inquisitive “trouble maker” such as me.  Thus, you better back off.

I was beginning to learn how all of this “War on Poverty” was really a war on taxpayers and, in fact, an enhancer of poverty.  The Poverty Industrial Complex feeds on poverty as it generates more and more grants to “address” the problem but actually feeds the problem to keep it going as the money coffers of the greedy get filled.

When do we stop this sham and start creating real jobs for our people?

Harry Alford is the co-founder, president/CEO of the National Black Chamber of Commerce®.  Website:  Email: [email protected]


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