A lobbyist known as one of California’s most successful power brokers while serving as a legislative leader in that state paid Rep. Maxine Waters‘ husband $15,000 in consulting fees at a time she was co-sponsoring legislation that would help save the real-estate finance business of one of the lobbyist’s best-paying clients, records show.

Ms. Waters‘ husband, Sidney Williams, a former pro football player and ambassador to the Bahamas, was a paid consultant on a Los Angeles lobbying project for Mike Roos, who served with Ms. Waters in the California State Assembly. During Mr. Roos‘ 14-year tenure, he held the posts of majority floor leader and speaker pro tempore.

In 2007, Mr. Roos expanded his successful California lobbying business to Washington, D.C., after Democrats took control of the House and Ms. Waters became chairman of the House Financial Services housing and community opportunity subcommittee, where she played a key role in housing legislation.

Mr. Roos sought her assistance for a California client that specialized in homeownership and asset development.

According to federal lobbying records, Mr. Roos was paid $430,000 by the Nehemiah Corp. of America, a Sacramento, Calif.-based nonprofit that acted as a middleman to help sellers finance down payments for homebuyers to qualify for mortgages insured by the Federal Housing Administration (FHA). He lobbied members of Congress and federal agencies on behalf of the firm.

One of those lobbied was Ms. Waters, a California Democrat and key Nehemiah ally, who held a hearing on down-payment assistance in June 2007 and persuaded federal housing officials to delay for 30 days efforts to impose a ban on the program. She also co-sponsored legislation in 2008 and 2009 that would have kept Nehemiah’s assistance program viable.

Nehemiah was the largest middleman on such deals nationwide, with more than a third of the business, passing on $1.5 billion from sellers to more than 320,000 homebuyers in a decade.

Ms. Waters denied any connection between Mr. Roos‘ payment to her husband and her help with Mr. Roos‘ client, Nehemiah. She said the program allowed homeownership to hundreds of thousands of low- and moderate-income families who needed assistance with the down payments.

The Internal Revenue Service ruled in 2006 that seller-funded down-payment assistance programs were “scams,” and federal housing officials tried for several years to end what they considered a dangerous practice of allowing sellers to make the required 3 percent down payments for homebuyers through a nonprofit middleman such as Nehemiah.

Three times, Ms. Waters co-sponsored legislation that Nehemiah and similar groups wanted to either stop the proposed federal ban or overturn it once it became law. The ban went into effect in October 2008, but not before Nehemiah had financed an additional $600 million in down payments for 100,000 homeowners in the 17 months after the ban was proposed.

In the first quarter of 2009, while Ms. Waters was helping Mr. Roos, her friend of 30 years, by co-sponsoring one final effort to overturn the federal ban on middlemen, her husband was on the Roos payroll as a consultant. The $15,000 payment, according to lobbying reports filed with the city of Los Angeles, was for Mr. Williams‘ help in trying to get a Los Angeles hotel off a designated list of residential hotels that could not be turned easily into upscale lofts.

The federal ban on middlemen remains in effect.

Ms. Waters‘ legislative duties and her husband’s business dealings have intersected before. She is fighting charges brought by the House ethics committee that she improperly sought federal help for a bank in which her husband was a former board member and a current stockholder. She has denied any wrongdoing and has vowed to fight the charges in a public trial set to begin later this month.

In a statement in response to questions from The Washington Times on her involvement with Nehemiah, she said her work on programs aimed at increasing homeownership had been “consistent throughout my career.”

She said that as head of the House Financial Services housing and community opportunity subcommittee, she was approached in 2007 by advocates both for and against seller-funded down-payment assistance programs to hold a hearing on the issue — before Nehemiah hired Mr. Roos.

Ms. Waters said she called the hearing because of her oversight responsibilities and because the issue had “potential implications for many people seeking homeownership.”

She said it was the owners of the Los Angeles hotel who asked Mr. Roos to include her husband in discussions with the city, and he accepted the contract nearly two years after her initial involvement with the issue of down-payment assistance.

Asked in writing whether there was a conflict of interest for her husband to receive a payment from a lobbyist for whom she was seeking favorable legislation for one of the lobbyist’s biggest clients, she said: “Ambassador Williams was hired for his stellar track record and knowledge of local government. Any suggestion to the contrary is unfounded and irresponsible.”

Mr. Williams, appointed by President Clinton as ambassador to the Bahamas from 1994 to 1998, did not return phone messages left for him after initially telling a reporter to call back later because he was traveling. He is president of the Williams Group, which provides consulting services to businesses.

Mr. Roos did not respond to e-mailed questions or repeated phone messages seeking comment.

Melanie Sloan, executive director of Citizens for Responsibility and Ethics in Washington (CREW), a watchdog group, said Mr. Roos‘ $15,000 payment to Mr. Williams created “an appearance problem.”

“It doesn’t violate any House rules, but members are supposed to avoid even the appearance of a conflict of interest,” she said, noting that Mr. Williams should not have taken money from a lobbyist his wife was helping.

“It seems unlikely that Mrs. Waters took any action because of the payment because she had been active on the issue for several years,” said Ms. Sloan, a former federal prosecutor. “It shows Mrs. Waters is a little tone-deaf on the appearance of conflict of interest.”

Nehemiah’s top executive, Scott Syphax, said he was not aware of Mr. Roos‘ payment to Mr. Williams. He said Mr. Roos was hired to strengthen the company’s ties to the California congressional delegation and to solidify its relationship with Ms. Waters. Before Mr. Roos was hired in May 2007, Mr. Syphax said, he met with Ms. Waters and urged her to hold a hearing on the issue.

Ms. Waters called a hearing on the issue in June 2007 at which Mr. Syphax said the business of providing seller-funded down-payment assistance to low- and moderate-income homebuyers was facing “extinction.” A month earlier, the Department of Housing and Urban Development (HUD) published a proposed rule to ban such seller-funded assistance.

FHA had long required buyers to make at least a 3 percent down payment to qualify for low-interest financing. While FHA rules allowed relatives to provide buyers with the down payments, they barred sellers from giving the money.

In 1997, Nehemiah found a loophole around the ban by giving the down payment as a gift to the buyer and then collecting the amount as a donation plus a processing fee from the seller. Other nonprofit groups got involved and seller-financed loans mushroomed from less than about 2 percent of FHA loans in fiscal 2000 to nearly 38 percent in fiscal 2007, according to the Congressional Research Service.

At the hearing, Margaret Burns, then a top HUD official, testified that such loans had “a significant negative impact” on FHA’s business. She said loans based on seller-funded gifts performed “very poorly” and foreclosure rates were “more than twice those” of all other home-purchase loans insured by FHA.

In 2007, Ms. Waters and two other subcommittee members, Reps. Al Green, Texas Democrat, and Gary G. Miller, California Republican, sponsored an amendment to the HUD appropriations bill prohibiting the agency from spending funds to implement the rule. The amendment passed the House but not the Senate.

HUD also announced its final rule in 2007. Nehemiah responded with a lawsuit, and a federal judge delayed implementation. In 2008, the court kicked the rule back to HUD, and President Bush signed a housing bill prohibiting down-payment assistance programs. Ms. Waters, Mr. Green and Mr. Miller introduced bills to restore the program in July 2008 and January 2009, but neither became law.

Mr. Syphax, who applauded Ms. Waters’ efforts in Congress as giving “people a chance to be heard,” said his company’s board of directors decided in March 2009 to get out of the down-payment assistance business and to stop fighting the ban.

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