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Mar 14, 4:11 PM EDT

Dallas official suspended amid allegation of directing funds

DALLAS (AP) -- A Dallas housing official accused of helping steer $825,000 in federal funds to a friend has been suspended.

The city has put Carl Wagner on paid leave pending an internal investigation into the allegations, the Dallas Morning News reported .

The moves came after a newspaper investigation found Wagner had a personal and business relationship with homebuilder Kenneth Williams. The two were childhood friends in Fort Worth and had done business together since the late 1980s, according to the report.

Williams was given city contracts to rebuild eight houses for low-income families in 2015. The newspaper report found that the houses Williams' company built for Dallas residents who are older and disabled were peppered with problems.

A background check would have shown that Williams misstated his financial history by claiming he had never filed for bankruptcy when federal courts records show he had, the newspaper found.

Williams was also barred from doing similar work in Fort Worth, where he worked with Wagner when he was a city employee there, according to city records. Williams received hundreds of thousands of dollars in city business until a legal dispute ensued.

It's unclear whether Dallas officials knew of the Fort Worth troubles or of the men's relationship.

The Dallas City Council is reviewing the vetting process for contractors. Federal officials have been investigating the housing department.

"We have to be a little bit more judicious with regard to the type of people we select," said Kevin Felder, who sits on the council's housing committee.

The newspaper could not reach Wagner for comment. Williams has previously said he did the best he could within the city's budget.


Information from: The Dallas Morning News, http://www.dallasnews.com

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