WASHINGTON — Secretary of Housing and Urban Development Alphonso Jackson announced his resignation on Monday amid allegations that he displayed political favoritism in the awarding of federal contracts.
Jackson, a close Bush ally and former chief of the Dallas Housing Authority, is stepping down under congressional pressure at a time when the Bush administration is grappling with the economic fall-out of a steep downturn in the U.S. housing industry.
President Bush accepted the resignation ``with regret,'' describing his long-time friend and former neighbor from Dallas as a ``strong leader and a good man.''
Democratic lawmakers who pressed for Jackson's ouster welcomed the announcement while challenging the administration to speed the nation's escape from the housing crisis.
``Today's news means little to the millions of homeowners struggling to stay above water,'' said Sen. Patty Murray, D-Wash. ``What they need is for their pleas for help from this administration to no longer fall on deaf ears.''
Jackson announced his decision in a brief statement at HUD headquarters and did not take questions. His resignation from the $32 billion department becomes effective April 18.
In a letter to Bush, Jackson said there ``are times when one must attend more diligently to personal and family matters. Now is such a time for me."
With only 10 months remaining before the president leaves office, the resignation forces Bush into a quick search for a replacement who could win confirmation in the Democratic-controlled Senate. No leading candidates had surfaced immediately following Jackson's announcement.
``We do not have any clue as to who would be stepping in,'' said Bill Collins, New Jersey state president for the National Association of Real Estate Brokers. ``We're sort of in a wait-and-see mode.''
Jackson, who has consistently denied wrongdoing, said that under his stewardship HUD has expanded minority home ownership, improved public housing and helped reduce homelessness.
``During my tenure here, I have sought to make America a better place to live, work and raise families,'' said Jackson.
Jackson's departure further erodes the inner-circle of Texas friends and confidantes who followed Bush to Washington when he became president in January 2001 after serving as Texas governor. Other high-profile departures include White House political guru Karl Rove, Attorney General Alberto Gonzales and high-ranking State Department official Karen Hughes.
Jackson had been under fire for months amid charges that he had politicized his department. The Philadelphia Housing Authority filed suit alleging that Jackson threatened to withdraw federal aid because it failed to hire one of Jackson's friends as a contractor, allegations that Jackson denied.
Jackson also was under investigation by the FBI, which was looking into ties between the HUD Secretary and a friend who was paid $392,000 by the department as a construction manager in New Orleans after Hurricane Katrina, according to press reports.
Jackson also stirred questions about his leadership at HUD after a speech in Dallas in which he said he canceled a contract with a company because its boss didn't like Bush. He later apologized for the remarks and said he made up the story.
Two senators — Murray and Chris Dodd, D-Conn., chairman of the Senate Banking Committee — sent Bush a letter demanding Jackson's resignation after Jackson failed to respond to congressional inquiries about the Philadelphia controversy. The growing allegations, Dodd said, undermined Jackson's effectiveness in helping resolve the housing crisis.
Dodd told reporters on a conference call that Jackson had become a distraction and an obstacle to resolving the nation's deep housing crisis.
"I welcome his decision ... we need to have people whose focus and attention is going to be 100 percent on this issue."
Jackson served as president and chief executive officer of the Dallas Housing Authority from 1989 until 1996. Later he headed American Electric Power-TEXAS, a $13 billion utility company in Austin. He was named HUD secretary in March of 2004 after serving as deputy secretary.
Jackson has known the president since the 1980s and enthusiastically encouraged Bush to run for Texas governor in 1994, according to ``First Son,'' a Bush biography by Texas writer Bill Minutaglio. Jackson served with Bush on the board of Paul Quinn College in Dallas.
Jackson has been a leading Republican figure in Texas' African-American community. Bush described him as a ``great American success story'' — the youngest of 12 children who ``has always understood the value of hard work and equal opportunity for all Americans.'' His father was a foundry worker and his mother a nurse mid-wife.
(Kevin G. Hall contributed to this article.)