To the Editor:

Recently, several allegations of improprieties and conflicts of interest involving both the Treasury Department's Community Development Financial Institutions (CDFI) Fund and our organization have been made by Rep. Spencer Bachus (R-Ala.).

Because your article of May 19 ("Conflicts of Interest Plague Community Development Fund, House Prober Says," page 2) reported on these charges, we are writing to more fully inform your readers about the issues it raised. We believe your report repeated the same serious inaccuracies and misinterpretation of fact contained in Rep. Bachus' original allegations, and would like to present a more accurate view.

In discussing the Low Income Housing Fund's 1996 award from the CDFI program, the article implied that Daniel Lopez, who was employed as one of several outside consultants by the CDFI Fund to review some first-round applications for funding, was also a paid staff member of the Low Income Housing Fund (by using language referring to the Low Income Housing Fund as Mr. Lopez's "own company").

In fact, Mr. Lopez is not and has never been employed by the Low Income Housing Fund, which is a nonprofit corporation. Instead, he volunteers his time as one of nine unpaid members of its board of directors, all of whom are, like Mr. Lopez, highly experienced professionals in the small and specialized field of affordable housing and community development finance. Accordingly, neither Mr. Lopez nor anyone else on the board has any financial stake whatsoever in this nonprofit corporation.

Your article repeated accusations that Mr. Lopez may have used his position as a consultant for the CDFI Fund improperly, to reject the selection of another California loan fund, the Northern California Community Loan Fund, or to otherwise favor the Low Income Housing Fund's application.

While it is true that Mr. Lopez was hired by the CDFI Fund to read and comment on several CDFI applications, including some from California organizations, his input-like that of all the outside consultants hired by the fund based on their expertise in the field-was just one of many elements of the fund's detailed and rigorous application review process. Mr. Lopez certainly did not have the final decision-making authority on whether or not any applicant should be funded.

It is important to note that the Northern California Community Loan Fund has no reason to believe that any possible conflict of interest adversely affected the review process of its application. Nor does it believe that Mr. Lopez's review of its application was tainted by any favoritism. Furthermore, the Northern California Loan fund has never voiced any concern or complaint to anyone at the CDFI Fund or elsewhere about unfair treatment or inappropriate action or behavior as a factor in the review of its application.

In closing, we wish to reiterate our own strong support for the mission of the CDFI Fund to assist in the revitalization of low-income communities across the country.

Daniel M. Leibsohn

President,Low Income Housing Fund

San Francisco

Paul Sussman

Executive director,Northern California Community Loan FundSan Francisco

Daniel B. Lopez

Daniel B. Lopez & AssociatesSan Leandro, Calif.

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