June 1, 2009 Controversy builds around Chapter 40B Play video

(NECN: Alison King, Boston, Mass.) - The Massachusetts Senate oversight committee called for greater transparency and accountability in the state's Chapter 40B affordable housing law.

It is a law plagued by allegations of fraud and abuse, according to the committee -- a law long overdue for an upgrade that brings it up to current standards of accountability.

The feedback from the state's inspector general's office on the committee's legislative report on the law was not favorable.

"Our conclusion is that the Chapter 40B represents one of the biggest financial scandals in state history," Massachusetts inspector general Gregory Sullivan said.

The state's 40B has helped spur the development of 26,000 units of housing since 1969, but it has long been controversial due to the control local cities and towns were forced to give up to developers.

Committee chairman Sen. Marc Pacheco said the report was never about scrapping Chapter 40B, but overhauling it.

"Profits in excess of 20-percent of these developments was supposed to go to cities and towns," Sullivan said. "In the entire history of the program, only $17,000 had been paid to a city or town."

NECN's Alison King reports.