Federal investigators are bearing down on Secretary of Housing and Urban Development Alphonso Jackson for setting up his buddies with contracts and then telling Congress that he didn't "touch contracts."

One contract in particular that prosecutors are scrutinizing involves Jackson's friend, Atlanta lawyer Michael Hollis, who was paid approximately $1 million for managing the Virgin Islands Housing Authority, the National Journal reported last week, adding: "Before landing at the authority, some sources said, Hollis had no experience in running a public housing agency." When asked about the contract, Hollis told National Journal that "he had negotiated his contract with Orlando Cabrera, a senior HUD official, and 'people on his procurement staff.'" A grand jury has issued a subpoena for documents relating to Hollis' contract.

Well, perhaps it's a coincidence, but Cabrera, the Assistant Secretary for Public and Indian Housing, announced that he would resign about a week before that National Journal piece came out. The resignation would be effective January 4th.

Why is he resigning? Cabrera told The Miami Herald, "I've had a wonderful experience these last few years, and I just want to take a few months to spend time with my wife and kids.... I know it sounds like the standard Potomac line, but it's not." He has "no firm career plans," the paper reports. The paper didn't ask him about the investigation, but you gotta wonder.

Ed. Note: Thanks to TPM Reader BK for the tip.

In case you haven't heard it enough times, it's not the crime, it's the cover-up. Or in this case, the lesson is not to make sweeping statements under oath that can be easily debunked. And for that, you can thank Housing and Urban Development Department Secretary Alphonso Jackson.

After Jackson boasted to an audience that he didn't give contracts to critics of the President, the department's inspector general and Congress pounced. Jackson, eager to clear his name, proclaimed, "I don't touch contracts."

Unfortunately, that appears not to be true, as the National Journal first reported last month. Now a grand jury is digging deep into Jackson's help for his friends:

Behind the scenes, Jackson has helped to arrange lucrative contract work running into the hundreds of thousands of dollars for friends and associates who went to work at HUD-controlled housing authorities in New Orleans and the Virgin Islands, according to people familiar with his actions. Indeed, one of Jackson's good friends, Atlanta lawyer Michael Hollis, appears to have been paid approximately $1 million for managing the troubled Virgin Islands Housing Authority. Before landing at the authority, some sources said, Hollis had no experience in running a public housing agency.

Jackson's past efforts to aid his friends are causing him no end of headaches. For several months, a federal grand jury, Justice Department prosecutors, the FBI, and the HUD inspector general's office have been exploring Jackson's role in contracting decisions at the housing department. According to people familiar with the investigation, federal agents are focusing on Jackson's relationship with one friend in particular, William Hairston, a stucco contractor from Hilton Head Island, S.C.

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