Nelson Rockefeller's Pill: The UDC

...But only State Controller Arthur Levitt continued to warn against the moral obligation bonds as “backdoor financing...

...To run it, Rockefeller tapped Edward J. Logue, a pugnacious expert in bureaucratic politics...

...But the move was too little too late, and the difficulty he encountered in making the sale led to a further loss of confidence by the banks...

...The broad lesson of the UDC’s collapse is that well-intentioned deviousness, the by hook or crook pursuit of a worthy goal, can in the long run do more damage to that goal than good...

...The key to understanding the Rockefeller-Mitchell mechanism is a bit of New York history, beginning in 1847, when, at a state constitutional convention, the chairman warned the delegates against the government’s “dangerous power” to borrow money...

...One of Logue’s first fiscal decisions did little to ease the banks’ fearsover those risks...

...This put in jeopardy not only the future ability of New York to borrow for desperately needed programs, but also the borrowing ability of other states, where the ripple effect of the UDC collapse was felt quickly and sharply...

...Instead, the loans would be supported by what Wall Street later came to call the state’s “moral obligation’’ to repay-an obligation that lifted, as if by magic, the need for voter approval...

...Carey’s penultimate move was to turn to Arthur Burns of the Federal Reserve, who said “no” to his loan request, and, with the banks threatening to attach UDC‘s assets, Carey let lapse the February 21 deadline, as well as a deadline a few days later on another $30-million loan...

...Rather than borrow money for each item to be built, so that each bond was backed by an individual project, the UDC pooled all its projects and borrowed generally against the combined revenues and worth...

...But this fact, known to any professional in the housing business, has not yet been faced by the voters in New York State or elsewhere...

...We are not wandering in a wilderness of unknowns,” he said...

...A Breech Birth The UDC was thus born...

...The city job, he made clear, didn’t have the clout to make it worth his while...

...From the outset, there was great enthusiasm and hope surrounding the UDC, despite what should have been seen as an obvious flaw in its conception, a flaw later compounding the central problem of “moral obligation” underpinnings...

...Although the “aggregate short fall” for $35 Gmillion worth of construction was only $3.7 million, the report said many of the projects would take three to 11 years of steady rent increases before rental income would be “sufficient to meet cash needs...

...the adequacy of the reserves for possible project losses and possible loan and mortgage losses as described...

...Mr...

...UDC‘s doom was sealed, perhaps, by an act of the state legislature and governor that, on the surface, had little to do with the UDC...

...By April 1974 Logue was conceding that his agency had suffered problems-but that those problems were behind him...

...One of the earliest . warnings that moral obligations required, if anything, more conservatism in management came in March 1972, from Controller Levitt, who said it was “not yet clear whether UDC will be able to meet its repayment commitments to the State on a timely basis” and that its budgeting and expenditure controls were “much in need of improvement...

...The elderly tenants are paying about $50 a room, compared with $150 for other tenants...

...But it hardly seemed so to the financial community, which feared that, instead of the strong projects protecting the weak, the weak projects would bring down the strong...

...In 1972, for example, the UDC had to suspend work on two projects it had begun for the New York City Housing Authority, which had promised to purchase them with federal assistance...

...Nelson Rockefeller’s Pill: The UDC bv Steven R. Weisman It could not have been the most inviting prospect for ex-Representative Hugh L. Carey of Brooklyn, New York‘s new Democratic governor, to achieve his first official milestone by presiding over the dramatic colIapse of the most powerful urban renewal agency in the state and the nation...

...Logue grimly accepted the change, but feared that it would be “construed as indicating legislative disfavor with UDC...

...But the greater reason for UDC‘s failure is the way the agency was created in the first place: by a gimmicky mechanism concocted by, of all people, Nelson Rockefeller and a then relatively obscure Wall Street bond specialist named John N. Mitchell...

...In October, Moody’s, the respected rating service, decided that, despite the “moral obligation” provisions in UDC debts, it was worried about UDC’s inablility to forecast its revenues...

...Logue began to boast that he could complete projects in 18 months, whereas other urban renewal agencies took three or four years...

...One solution to the shortage of low-rent housing-a solution tha would not involve governmen architecture-is suggested by thi recent report in The New Yorl: Times: “Henry Kibel had a city permi to build a 33-story luxury apart ment house at 300 East 34tl Street, but he did not stop buildin1 until he reached the 36th floor Irate neighborhood resident: demanded early last year that the three illegal floors be torn down The city came up with a compro mise: The three top floors could remain, but Mr...

...With construction costs, operating expenses and interest rates rising sharply, our pleas that the program be slowed were of no avail...

...The UDC had built or begun construction on 33,600 apartments in 50 communities with its authority to borrow money, develop its own projects, and then construct them, with disregard if necessary for local zoning and building codes...

...But such caution was expressed in whispers, and few took note of it-certainly not politicians...

...Their rich legacy will now have to include the shambles that Governor Carey and the banks are trying to sort through in New York...

...The best that it could do, apparently, was to suggest in a vague way that income would surpass expenditures in 1978 or 1979...

...But Logue’s hope was misplaced, for the situation was now out of his control...

...Now we are seeing those visions sink, leaving nothing but wreckage on the surface for others to clear away...

...In the words of Richard Ravitch, who was brought to clear the wreckage in New York, “In the 1960s we forgot that resources were limited...

...The 1972 annual report, which came out in 1973, was of little comfort when it warned that failure to complete the “236” contracts would result in “modification, post‘ ponement, disposal or abandonment” of several UDC projects-“with consequent loss to UDC...

...But even if the situation holds, of course, the damage has been done...

...Ironically, Ravitch was the man Governor Carey brought in three years later to save the moribund UDC...

...The banks, meanwhile, were expressing their own disfavor in no uncertain terms...

...To Governor Rockefeller, it was the UDC‘s powers that made its concept “revolutionary...

...But they had forgotten to reckon with Rockefeller’s will...

...It said UDC too often bowed to local political and community pressure for unfeasible projects, and then was left with apartment house complexes that had no prospect of making money...

...and that it spent $5.8 million for local civic projects, even though it was still only “in the process’’ of negotiating sale agreements...

...The cutback, Logue predicted, was “financially incompetent” because it would jeopardize the financial health of what had already been built...

...He spent money to plan projects he knew might not get built-a necessary tactic for a government agency, but one that made investors skeptical...

...A reversion to a system of winning voter and taxpayer approval for public construction will undoubtedly make it harder for the government to pursue its goal, and therefore the politicians who are concerned with housing needs will have to do a better job of clarifying those needs to the voters...

...Governor Rockefeller, who had actively opposed all efforts to dilute the UDC’s broad powers, found it harder to fight off the dissidents...

...The “moral obligation” fix worked when there were good times, when the marketplace was bulging with investors, and government found that it could profit tidily from their loans...

...Everything was over but the final salvaging-and the re crimina tions...

...Today, 30 states have $30-billion worth of “moral obligation” paper outstanding...

...Once more, the auditok warned of the agency’s inability “to evaluate...

...If they were paying attention, investors might also have noticed that Robert C. Moss, the chef UDC fiscal officer, had abruptly resigned, and that Ed Logue had left Moss’ job vacant for several months...

...Rebuffed, the bank withdrew as a manager in a syndicate of seven UDC bond underwriters in early 1974...

...The Schlitz Brewing Company agreed to erect a $100-million regional brewery at Radisson, prompting UDC staff people to refer to the beer as “Schlitz-the beer that made R adisson feasible...

...Its failure stems in large part from forces that were beyond anybody’s control-a destructive inflationary economy and an abrupt freeze in 1973 of all federal subsidies for housing...

...Nonetheless, after the final throes, the Governor’s Task Force was to find that 24 of 50 projects Logue had placed in operation had “insufficient working capital provisions”-that is, they were losing money...

...It is not so in relation to the subject of debt...

...The destructive bulldozer was what many liberals feared most in the UDC, but it turned out that UDC‘s failure had very little to do with whether its building program helped or hurt the poor in local communities...

...On the morning of April 9, they voted in an unlikely alliance with conservative Republicans to defeat the UDC bill, 85 to 48...

...New Jersey had already approved the measure...

...This power in the arms of those who are driven by a call to build, build, build and then build some more and damn the rules and regulations, including, for a short while, community zoning codes, and damn the bankers...

...When Penn Central also went bankrupt, UDC found that holders of the railroad bonds had a claim to the property and that UDC might lose its investment...

...But interest rates-the curse of the market’s lack of confidenceclimbed anyway...

...Logue had engineered $5-billion worth of redevelopment in his hometown, New Haven, and then in Boston, after a stunningly unsuccessful run for the Boston mayoralty that left him with nothing but debts...

...They also had a disastrous situation on their hands in the money market . A mounting federal deficit was absorbing huge sums of available capital...

...The business of government in the 1970s will be to pay the price of the decisions of the 1960s...

...The UDC,” said Frank Smeal, “has been a stylish, highly visible agency, more popular with editorial writers than with bankers, claiming the courage and imagination to rush in and build housing where others feared to tread...

...Builders of high-rental buildings sould be required to offer a -easonable number of units at low 3r moderate rent as a condltion to being permitted to enjoy the high xofit from the rest of the building...

...He was hopeful that the $365-million worth of projects that were already beginning to generate revenue would persuade banks that UDC was healthy...

...The Bitter End But the biggest blow to befall the UDC came in January 1973, when President Richard Nixon announced a moratorium on all federal housing subsidies...

...In other words, the idea of enlisting the private sector in support of public projects isn’t dead...

...The idea of “moral obligation’’ bonds caught on across the country in states that had similar constitutional restrictions on borrowing money...

...It had spent $1.1 billion by the beginning of 1975 and was geared up to spend $900 million more...

...Banks, at the same time, had lost much of their need for tax shelters because of their increasing reliance on overseas investments and on the purchase of real property, which they depreciated for quick tax write-offs...

...Audubon, a $5OO-million new town at the site of the State . University of New York in Amherst, just north of Buffalo...

...that.it undertook $5.2 million for relief programs for tropical storm Agnes with money that had not yet been reimbursed (the need for swift action on the matter being paramount...

...The banks served notice that they would not lend UDC any more money until somebody straightened it out...

...It had, in 1972, launched a proposal to construct 1 00-unit projects in each of nine small towns in suburban Westchester County, something that brought forth a storm of opposition from suburban residents...

...No one seemed to listen, perhaps because controllers are always prone to issue tiresome warnings of one sort or another to liberals with visions before their eyes...

...Ironically enough, Logue had spurned an earlier offer to come to New York City to work for his friend from the old days in New Haven and Yale, John V. Lindsay...

...They’re out on a limb, and we’re out on a limb with them,” said a Health Department official...

...When he took office in January, UDC was spending a million dollars a day on its 500 employees and 8,000 construction workers on projects around the state...

...Belatedly, Logue offered to transfer or sell $190-million worth of housing projects to the more conservatively run Housing Finance Agency-the rival “moral obligation” agency that had been set up in 1960-freeing some money for UDC...

...The agency had its share of bad lick, too, when it spent $7 million for a department store chain in Syracuse that went bankrupt and $11.5 million , on land purchased from the Penn Central...

...With the default, all this activity came to an end...

...Born of the urban crisis, it was mandated to build housing in the worst slums in the state-housing that was not being built by private enterprise for the simple reason that such housing was not profitable...

...The march over, he got on the telephone to the legislators, in what remains one of the most furious displays of lobbying, arm twisting, threats, counter-threats, and horse-trading that Albany has ever seen, and managed to “persuade” the legislators to reverse themselves, 86 to 45, in a vote taken a few moments before a midnight deadline...

...New Jersey attracted only one investing group in early March and had to pay 7.9 and 7.4 per cent interest on notes it thought it could sell for 5 per cent...

...Rockefeller’s offer, on the other hand, promised the power, and the Governor sweetened the deal, we know now, by proffering $176,000 in gifts and loans to help pay off Logue’s campaign debts...

...And he promised everyone that there was enough “236” federal money to cover the projects that needed it...

...Risk, in other words, was UDC’s raison d’etre, which Adams, among others, said was all right in theory...

...It’s at least arguable that, by creating the UDC and other “moral obligation” agencies, the politicians did little to force their constituents to confront this fact...

...While many viewed the Authority’s reserves as free money for desperately needed mass transit, investment banks saw them as protection for their bonds- protection that , when rated, undermined the value of the bonds and of the state’s obligations in connection with the bonds...

...In June 1974, Governor Malcolm Wilson signed, with “great reluctance,” a measure repealing the 1962 covenants placed on bonds issued by the independent bi-state agency, the Port Authority of New York and New Jersey...

...The Governor, that same day, had been marching in the sultry streets of Atlanta in the emotion-ridden funeral procession of the Rev...

...With an exception here and an exception there, the evidence is positive...

...The UDC spread-ofrisk factor,” he said, “is one of its great financial strengths...

...The trouble was, he said, that “the UDC, in pursuing its social ends, seemed to forget it was working with private money...

...The mechanism was built initially into Rockefeller’s Housing Finance Agency, created in 1960 with the power to borrow money-except that the money was not to be backed by the full faith and credit of the state treasury...

...We were deeply concerned about the hostile environment in which the financing had to be done,” said Frank Smeal of Morgan Guaranty...

...But the Authority had no assurance of the assistance, and UDC auditors acknowledged that the state agency might be “unable to recover” its money...

...Great Expectations Shortly after he entered office, Rockefeller and his friend Mitchell came up with their device to circumvent the constitution, not to mention the will of the voters, who had begun to develop ‘something of a habit of rejecting various bond issues for state-sponsored construction...

...What he failed to understand at the end was that the UDC was not “any real estate development program...

...Steven R. Weisman is a reporter for The New York Times...

...It was a government agency circumventing the state constitution for purposes that were, by definition, full of risks...

...New Yprk City’s appetite for borrowing was leaping as well...

...The inference was easily drawn,” said Smeal, “that one who will revoke a legal obligation can have little regard for an annually maturing promise euphemistically referred to as a ‘moral obligation.’ ” That UDC was finished became clear in September, when the agency sold $275-million worth of bonds at the astronomical rate of 9.375 per cent-the previous average had been 6.5 per cent...

...Ed Logue, however, resigned after Governor Carey took office, and Governor Carey proved that, moral obligation or not, he was weary of UDC...

...We had an uneasy feeling about UDC, almost from the beginning,” said Frank P. Smeal, executive vice president and treasurer of Morgan Guaranty Trust Company...

...Logue responded by saying only that UDC was unable to project the point when total revenues would be sufficient to repay its outstanding bonds...

...Inflation, meanwhile, was dampening the interest of individual investors and all but wiping out the savings of casualty insurance companies, who were the other big lenders in the marketplace...

...Institutional investors began dropping out of the UDC market, leaving individuals to pick up the slack...

...It was in the stormy days of April that the issue first came to a vote...

...In the spring of 1973, the banks found themselves most concerned with UDC’s “open-endedness,” its plunging into more and more construction projects, even though it couldn’t say for sure when income would surpass expenditures...

...Although cost overruns for the UDC were only 6.1 per cent-a reasonable figure-the agency was seen by investors as a profligate outfit...

...It’s been very unsettling,” said Ellmore C. Patterson, chairman of the Morgan Guaranty Trust Company, “in the market and across the country...

...At UDC, there was nothing less than panic, for Logue had relied on the “236” subsidy program for 94 per cent of his projects...

...A Governor’s Task Force in late 1974 was to report that UDC persistently ignored warnings from its own market analysts that it would have trouble renting its projects...

...In a handful of projects, we may have somewhat overbuilt the market at the urgent request of local officials...

...By going into renewal areas and other ‘gray’ neighborhoods,” the Governor’s report concluded, “the Corporation assumed risks which no private developer and no other public agency would take...

...UDC‘s only hope for repaying the loan-its urgent request for still another loan-had been unequivocally turned down for the last time...

...It’s tragic...

...Governor Wilson’s Task Force, which examined the UDC at the end ’ of the year, finally endorsed the banks’ recommendation of halting UDC construction and cutting its authorization back from $2 billion to $1.6 billion...

...All the agencies Rockefeller had created to borrow money, with a moral obligation to repay, were supposed to build thmgs that would produce enough revenue to pay off what they borrowed...

...Kibel must rent ar equivalent number of apartments ir the building to elderly tenants a1 moderate rents...

...A few months later, Moody’s reduced the rating another notch, to Baa...

...In part, UDC is now realizing the financial penalty of its risk-bearing behavior, as well as for its speed of operations...

...The bankers, it turned out, were not simply reacting to what they perceived as poor management at UDC...

...What began to worry investors, however, were the very things that impressed everyone elseEd Logue’s determination to cut through what Rockefeller had called “the impenetrable layers of red tape” . associated with publicly subsidized construction...

...It was a decision apparently encouraged by George D. Woods (whom Rockefeller persuaded to serve as the first UDC board chairman) on the basis of Woods’ experience as president of the World Bank...

...UDC’s ability to call on the capital market for help was at a virtual end...

...They also noted that UDC had begun construction that year on 13 projects on sites for which it had not acquired title...

...In short, the collapse raised enormous doubts about the government’s-any government’s-ability to use private resources for public ends...

...such power ought to be granted only with a far wider agreement of those who must ultimately pay the bill...

...At the same time, bDC hardly rose to the occasion...

...Renting at the building is well under way, and all 50 units set aside for the elderly have been taken, the city’s Office for the Aging confirms...

...But by then many liberals in the Legislature were beginning to be afraid of the indiscriminate bulldozer of urban renewal...

...Debt] is silent, creeps along, gets into the state, and when the act is once passed, the debt incurred, the obligation is as strong as death for its pay me nt . ” Heeding the warning, the convention wrote in the constitution that no debt could be incurred without approval of the voters in a referendum, a stricture which remained in force, more or less, for 100 yearsuntil Rockefeller came along...

...Banking hostility in late 1973 forced UDC to reduce a $200-million bond issue to $100 million...

...In early 1972 Richard R avit ch, the builder-developer brought in to coordinate it, resigned because he thought the whole project was unmarketable...

...These were tactics that might have been frowned upon in most any government renewal agency, but they were particularly hazardous in view of the precarious “moral” commitments that the agency had, in effect, to its own solvency...

...More specifically, it left as an open question whether a state government can from now on easily tap the tax-exempt bond market to finance decent housing for people who need it, and thus raised doubts whether such housing can be built at all...

...With only a trickle of revenues coming in, it was, in effect, broke-and there was a $104.S-million bank loan coming due February 21...

...In the immediate aftermath of the default, for example, a billion dollars’ worth of work ground to a halt on nursing homes, hospital additions, and other health facilities because investors had become afraid of buying the moral obligation bonds which backed the projects...

...They observed the problems of UDC’s risks, its lavish construction program, and its lost federal subsidies, and they began to make demands that UDC give some indication of its “cash flow” situation...

...Logue’s speeded timetable was accomplished by a variety of means, some of which did not become clear until recently...

...To Logue, this strategy helped spread the investment risks and also protect individual projects from “wicked swings” in interest rates...

...At no time were those visions more fierce than in 1968, when Rockefeller introduced the granddaddy of moral obligations, the UDC...

...Eventually, Carey won tentative approval from the banks to buy the bonds of a new state Project Finance Agency, which he and the Legislature created to take over the UDC construction program and bring it to a hasty close...

...what we have learned is that a government cannot responsibly enter into such a partnership without the co-signature of the voters...

...worse, the credit of New York State was instantly and perhaps permanently damaged...

...Both of them have gone on to bigger things...

...UDC‘s reputation was only enhanced by its commitment to build three glamorous “new communities”Radisson, a $500-million suburb of Syracuse...

...But the marketplace is a cruel, fickle, and even panicky judge of government policy when times are bad, especially when the guarantees are weak...

...A complex, internal cash flow structure made it impossible to forecast overall revenues and expenditures, and UDC could not he 1p .’ ’ Weak Vital Signs UDC‘s very first annual report, in 1969, carried a footnote from its auditors, S. D. Leidesdorf, that it was “not presently determinable” whether the UDC was going to be able to recover the costs incurred by its construction program...

...The remarkable decision to default on Urban Development Corporation short-term notes was a shot heard round both the financial world and the political world of dozens of states that had patterned their own agencies after the pioneering example set in New York...

...Post Mortem Urban renewal, over the years, has not always been the most popular of enterprises, even among those committed to helping the urban poor...

...The collapse of UDC, Smeal seems to suggest, does not mean the end of urban renewal...

...In 1973, he bowed to their pressure, perhaps with an eye to running for reelection the next year, and signed a new law requiring UDC to win approval of its projects from any town or village it wanted to build in...

...Not until some time later, however, did it become clear how correct Levitt was...

...Banks pleaded with the UDC to cut back on its programs...

...The moratorium led to painful questions: what would happen to the “236” money for which Logue had received mere “administrative assurances”and gone into construction anyway...

...It simply means that taxpayers will have to play more of a role in approving and overseeing it...

...It requires, we now know, a much firmer state commitment which can only be given by the people...

...Michigan tried to sell $33 million in bonds and was forced to cut back to $25 million...

...And he hustled aggressively to obtain millions of dollars in federal interest-rate subsidies under Section 236 of the Housing and Urban Development Act of 1968-but again permitted himself to go ahead on “236 Projects” for which he had no written contracts guaranteeing the money...

...Martin Luther King, Jr., whose assassination had touched off rioting from city to city across the nation...

...The irony of these grim tidings is that perhaps the UDC collapse was a deserved comeuppance for liberals who for the last several years have engaged in a good deal of deceptionnot to men tion self-deception -to keep the corporation going...

...The subsidies were essential to these projects’ marketability-without them, his apartments would cost $100 a room...

...Our development program, like any real estate development program, requires systematic borrowing,” said Logue, as he complained about the banks’ criticism of his need to borrow...

...First, he went ahead and built on the strength of verbal commitments from the federal government and localities, risking the possibility that they might not meet their promises...

...But on Roosevelt Island there was trouble...

...Defending its record to the end, UDC officials said that only 10 per cent of their projects suffered “serious, chronic problems,” but they acknowledged that another 40 per cent would have to be “saved” by rent increases-a disturbing prospect when the purpose of the housing was to help families of lesser means...

...It then dealt the agency a major blow by reducing its credit rating from A to Baa-1, warning bondholders and analysts not to be “misled by the simplicity” of the term “moral obligation...

...Instead, in New York, the politiciansand, yes, almost the entire remainder of the community of liberals-avoided the issue entirely with another one of those quick fixes for which the 1960s is becoming famous...

...The covenants had prohibited the Authority from using millions of dollars in reserves accrued from its lucrative airports, tunnels, and bridges for any mass transportation projects that might lose money...

...Morgan Guaranty specifically asked UDC to call a moratorium on new projects...

...Logue’s intention was to build most of the communities with private capital, and he succeeded in some respects...

...The immediate focus of most politicans and editorial writers had been on the new agency’s powers to override local zoning and building codes, rather than on its financing arrangements...

...They complained further that they couldn’t see exactly how project revenues might match expenses...

...In almost any case, if a bad law is passed by the Legislature, it can be repealed,” he said...

...The UDC, James R. Adams wrote recently in a Wall Street Journal editorial, was thus designed to build “socially beneficial” projects it knew had “low prospects for generating the revenue needed to repay the debt...

...To make matters worse, UDC embarked on this, its middle period, with enormous borrowing needs of its own, principally because of the heavy start-up costs of construction work done in 1971 and 1972...

...The UDC collapse in New York has now left the agencies that sponsored such construction high and dry...

...But the UDC was different, in a sense...

...The fact is that private enterprise cannot today provide housing for the poor, and even increasingly for the middle class, without government assistance of some kind...

...The rise and fall of the UDC is a tale of self-delusion, overreaching, overreaction and panic by both politicians and banks...

...and Logue’s crown jewel, Roosevelt Island, a glittering, $3 7 5-million, 5,000-apar tment community on an island in the East River, containing shopping space, office and hotel space, as well as a Buck Rogers system of mini-buses, underground sewage disposal, and an aerial tramway to Manhattan...

...New York leads the pack, having succumbed early to Governor Rockefeller’s famous “Edifice Complex,” facilitated by the state’s moral commitment of $6 billion to erect dormitories, hospitals, schools, and other facilities on a scale not seen since Robert Moses...

...But that is exactly what happened last February 21, when Carey and the New York State Legislature permitted the day to pass without their paying off a $104.5-million bank loan that had come due for the state’s sevenyearold Urban Development Corporation (UDC...

...Kibel has made good on the bargain...

...Touch and Go Steadfastly, Ed Logue always denied that he was taking any “undue risks...

...Meanwhle, urban renewal officials in other states were left to make desperate phone calls to investors to shore up confidence in their own agencies...

...In the heady go-go atmosphere of the last decade it seemed that miracles were only a matter of aggressive vision...

...1973 was the year UDC suffered major losses, politically and economically...

...The years following the creation of the Housing Finance Agency in New York in 1960 contained hints that voters may have been trying to tell the politicians something by rejecting “full faith and credit” bond issues for housing in 1962, 1964, 1965, and 1966...

...Although it should have been clear all along, from a careful reading of the S. D. Leidesdorf accounting reports, that UDC had never been able to document completely its cash flow, Moody’s and the banks were now pointing to this fact to substantiate their claim that the entire operation was basically suspect...