Utah senator, a top lawyer for landlords, draws heavily from a state ‘slush fund’

(Rick Egan | Tribune file photo) Utah Sen. Kirk Cullimore, R-Draper, at a March news conference on the coronavirus at the Utah State Capitol. Some of Cullimore’s private work on behalf of his law clients has renewed questions about his dual roles as an elected leader and aggressive private attorney for the state’s landlords.

A Utah senator, among the state’s most aggressive lawyers for landlords, has shifted gears in recent months, seeking a burst of small taxpayer-funded grants. And when the money dried up, he argued for the state to add more to what his firm and others call the “slush fund.”

Housing advocates are questioning the moves, which he says are simply efforts to help landlords recoup losses and keep rentals available for the poor.

The law offices of Sen. Kirk Cullimore have received roughly $235,980 since 2018 from the special state fund that provides grants to landlords who rent to very low-income tenants who rely on federal housing aid — with payments from the fund stepping up dramatically since the pandemic.

Nearly $98,940 of that money has been paid out since March, with a sizable share of it covering legal fees charged by the senator’s firm.

The state added $500,000 more to the the so-called Section 8 housing account on Thursday at the urging of Cullimore, other state officials and the trade group representing Utah’s apartment owners. And Cullimore is now positioned to get the greater share of that for his clients and Draper-based law offices.

The first-term state senator said Friday he gets the grants on behalf of landlords to cover their costs after tenants skip out on leases or damage rental properties.

The Sandy Republican acknowledged in an interview that the account is referred to as “a slush fund” in Utah’s housing industry, and that’s how it was identified on his own law firm’s website, as recently as Friday. But he said the state-supervised payments, in effect, encourage landlords to participate in the Section 8 program, even after a bad experience with a tenant, who either doesn’t pay or causes damage.

Because these tenants earn so little, “it’s difficult if not impossible to recoup those damages,” Cullimore said. As a result, he said, “while most landlords are happy to lease to Section 8 recipients, there are some, particularly small mom-and-pop landlords, [who] are more reluctant to do so.”

The state grants of up to $5,000 are awarded after landlords take tenants to small-claims court and obtain a debt judgment against them. The process also wipes the debt from the tenants’ credit records, in what Cullimore and a lobbyist for the state’s landlords described as a win for all involved.

Others don’t see it that way.

Records show a handful of private real-estate investors have also received these Section 8 grants since 2017. But Cullimore’s firm, which by the senator’s own estimate, represents up to 80% of the state’s landlords, is the largest recipient by far.

And of the first $500,000 spent out of the state-managed Section 8 fund — about $302,660 or 60.7% — went to cover property damage and unpaid rent. Another $164,100, or about a third, paid for court costs and attorneys fees.

June Hiatt, an organizer for the nonprofit Utah Renters Together, accused Cullimore of “misusing his role” as a state senator to financially benefit himself, his clients and his practice.

“Why is a state senator who is the lead evicting attorney in the state also influencing policy and talking to state officials about funding he says they need to be allocating, knowing full well that he’s benefiting from that?” she asked.

None of this would be acceptable if it were anyone else,” Hiatt said. “But Cullimore gets away with it because no one’s paying attention.”

Vocal advocates

In an interview, Cullimore defended his firm’s use of the fund as part of championing landlords he sees as crucial housing providers. He also countered that the overlap between his professional life and work as a state legislator was endemic to Utah’s part-time Legislature.

“Whatever field you’re in, that’s kind of your area of expertise,” he said. “And when you run bills, often times you’re dealing with stuff that you know about.”

But concerns the senator is blurring the lines have come up before, including earlier this year.

In February, he backed SJR5, which sought to allow any lawyer to disqualify one judge per case — without any cause. Though Cullimore said the bill had nothing to do with his legal work, other lawyers and housing advocates said it appeared to be a bid to avoid certain judges who had stood up for tenants in eviction disputes.

He also sponsored SB220 which some feared could curtail certain renters’ rights in contesting evictions, although Cullimore said that was not his intent.

The senator’s law firm, founded by his father and business partner, Kirk Cullimore Sr., filed eviction suits against 2,284 renters in Salt Lake County alone last year.

Emails obtained by The Tribune indicate that Cullimore and his father tried to persuade Utah court officials to speed up their handling of eviction cases that had stalled because of changes to court scheduling in reaction to the pandemic.

On March 17, days after Utah’s first stay-at-home directives took effect, the younger Cullimore called a court administrator with suggestions on ways hearings could be staggered hourly to lessen potential exposure risks, one email shows.

Addressing him as “Senator Cullimore,” the official replied the courts had heeded those suggestions and assured him that eviction hearings would resume the following week. Then on March 21, the chief justice of the Utah Supreme Court issued an order canceling all jury trials until at least June 1 and limiting other hearings, out of fears over the spread of the coronavirus.

Cullimore wrote on March 23 to 3rd District Presiding Judge Mark S. Kouris and his staff, voicing frustration about 66 pending default evictions — and more that had yet to be filed — all requiring only a judge’s signature to proceed.

“None of the stalled evictions should be related to the pandemic issues as the defaults on their leases occurred prior to government lockdowns or quarantine concerns,” the senator wrote.

Landlords, Cullimore told the judge, were working with struggling renters to accommodate those impacted by COVID-19 or related job losses. “No matter what they do, though, or how they work with tenants, there are going to be significant losses and these companies are going to be severely affected,” he wrote.

Additional emails show that a week later, as delays continued, Cullimore’s father weighed in, in apparent exasperation. Being “default” matters, he wrote to Kouris on March 31, “there is no reason why these have not been signed.”

“These are tenants who did not pay PRIOR to the pandemic. There is no relationship between their failures to pay and the current crisis,” he wrote the judge.

“I have clients who are not just unhappy but feel that the courts are not doing their job,” he continued. “They are taking losses and have no hope.”

Housing Choice

Section 8 refers to a U.S.Department of Housing and Urban Development program that helps low-income individuals and families find and keep housing. It pays rent to private landlords on their behalf, through a system of vouchers.

Roughly 41,500 Utahns, or between 10,000 and 15,000 families, rely on these vouchers, which are also called Housing Choice. Recipients are largely seniors, children, people with disabilities and families earning less than a third of the state’s median income.

Tenants who get Section 8 vouchers are seen as a special legal class under Utah law, protecting them from housing discrimination. Especially with the shortage of affordable homes statewide, advocates for low-income residents say the protections are vital.

But that legal status was in jeopardy in 2017 when a bill surfaced to eliminate it. Paul Smith, lobbyist and executive director for the Utah Apartment Association, said the Section 8 program imposes cumbersome rules that landlords don’t face with other renters. So while landlords can’t legally discriminate, Smith said the program leaves some less inclined to participate.

“There are so many differences, you can imagine why landlords would say, ‘It’s not the tenants. I just don’t want to jump through those hoops and make my life more complicated,’ " Smith said. “So I’ll just rent to the other person.”

In a behind-the-scenes deal struck with help from prominent Utah homeless advocate Pamela Atkinson, the Section 8 fund was created in what Smith called “a compromise” — while several housing advocates said that landlords instead appear to have gotten their way in the bargain.

Cash incentives for landlords to rent to lower-income or at-risk tenants “would seem like an effective public policy measure,” said Hiatt. “All it’s done is create perverse incentives for landlords to double benefit from the system.”

People are already being evicted. They’re already collecting treble damages, which are financially devastating. And then taxpayer dollars are coming in on the back end and lining these pockets,” she said.

George Sutton, a Salt Lake City lawyer who works pro bono on behalf of defendants in small-claims court, said the bulk of contested cases he sees are filed by landlords, sometimes years after the debt is incurred, against folks who can barely afford to pay.

“All of these are people of the working poor,” he said.

A rise in grant requests

The state Department of Workforce Services put $500,000 into a special account for those grants in mid-2017, according to Jonathan Hardy, director of DWS’s Division of Housing and Community Development.

The fund was created before voters elected Cullimore to represent Utah’s Senate District 9 in 2018, although he was general counsel for the apartment association at the time and part of the talks. The senator remains an association board member and his law firm was listed as one of its “premier partners” this year.

Christopher Cherrington | The Salt Lake Tribune

“At the end of the day,” Hardy said Thursday, “people feel like the program has operated well. They feel like it keeps landlords engaged with the Housing Choice vouchers, which is kind of a difficult market right now.”

As landlords have become more aware of the grants, he said, claims to the fund increased dramatically. Records indicate the account held a balance of about $136,400 at the end of 2019, but Hardy said “a big run on it these last few months” left the account empty.

Cullimore said his law firm had a staff member dedicated to overseeing those grant applications, with his firm’s website describing her job as “managing the Housing ‘Slush Fund’ process.”

And as other legal work has dropped off since March because of the pandemic, the senator said, his firm stepped up its pursuit of the grants.

Claims ready to file

In a public meeting Thursday, board members overseeing the state Olene Walker Housing Loan Fund, which provides financing for affordable housing projects, voted to put another $500,000 into the account — cash one member noted might otherwise go to loans for apartment construction.

At their behest, Smith promised the board that his association would lobby lawmakers to set aside money for the account each year. “We will not come back and ask again for an appropriation from you,” he told them via teleconference.

When board members contemplated putting less than $500,000 into the fund, Cullimore said his firm had $71,000 in grant claims ready to be filed and another $288,000 in judgments that were waiting on minor paperwork.

Additional outstanding claims worth “a couple hundred thousand dollars more,” he told the board, were in the pipeline.

“That’s just the pent-up” demand, said Cullimore, who in an interview predicted the fund would need $500,000 or more yearly to fully cover landlord damages attributed to Section 8 tenants.

The senator said Friday that in light of accusations of conflicts of interest, he would avoid pressing his legislative colleagues to support that ongoing spending.

“Hell no,” Cullimore swore. “I’m sure people will ask me about it, but I will not be involved in that.”