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Developer Calls Texas Agency Vindictive

HOUSTON (CN) - A contractor that Texas hired to build emergency housing under a FEMA grant claims the state's Department of Housing and Community Affairs fired it to retaliate for its suspicion that the contractor had leaked "negative information" to a legislator, spurring a congressional hearing into the agency's management of FEMA funds.

Heston Emergency Housing and its owner and CEO Naji Al-Fouzan say the Texas Department of Housing and Community Affairs (TDHCA) awarded it a $16 million contract to build 250 prefabricated, container-sized housing units under the Alternative Housing Pilot Program, a competitive grant program Congress designed to address emergency housing needs after the 2005 hurricane season.

"Throughout the course of the contract, Heston substantially met or exceeded all requirements of the Alternative Housing Pilot Program (AHPP) which the contract imposed on it," Heston says.

But when Congresswoman Sheila Jackson Lee began to participate in congressional investigations about TDHCA's use of FEMA funds, then called a public hearing before the U.S. House of Representatives, during which she was "highly critical of TDHCA," the agency turned on Heston Emergency Housing, the company says.

Soon thereafter the TDHCA Executive Director Michael Gerber "began to express his anger and animus toward Heston, based on Gerber's belief that Rep. Lee received negative information from Heston," according to the complaint.

Gerber told Al-Fouzan not to talk about the TDHCA to any media, local, county, federal agencies or representatives, including Rep. Jackson Lee, the complaint states.

When Gerber and TDHCA senior staff came to believe that Heston had disobeyed its gag order, it retaliated with false claims that Heston was not meeting its contractual obligations, despite its field staff's reports that Heston was doing the work satisfactorily, Heston says.

Heston claims that TDHCA staff made false claims about it to local, county and federal agencies, and to people housed in Heston units.

"TDHCA headquarters' staff through a wrongful manipulation of public authority ... prevailed upon TDHCA to ultimately refuse to pay Heston for the work completed under the contract, instead terminating the contract on the pretext that Heston was in default," the company says.

New Orleans-based Heston Emergency Housing, and Al-Fouzan sued the Texas Department of Housing and Community Affairs, its Executive Director Michael Gerber, and three other senior staffers, Martin Rivera, Marisa Calla and Timothy Irvine, alleging for retaliation, defamation, due process and constitutional violations.

Heston sued in both state and federal courts Monday.

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