Sept. 22 (Bloomberg) -- The Bush administration's top housing official temporarily blocked a federal contract with a Massachusetts firm because of its political affiliation and for personal reasons, senior U.S. Housing and Urban Development aides told investigators.

HUD Secretary Alphonso Jackson, a member of President George W. Bush's Cabinet, also urged aides to favor friends of Bush when awarding contracts, a report by the agency's inspector general said. The report cited the sworn testimony of Jackson's aides including his chief of staff, Camille Pierce, a lawyer who has worked for Jackson on and off since the 1980s.

The investigation found ``no direct evidence'' that political favoritism actually played a role in specific grants or contracts, according to an executive summary of the 340-page report.

Jackson, who was head of the Dallas Housing Authority while Bush was governor, told investigators that his opposition to a contract for Abt Associates in Cambridge, Massachusetts, stemmed from the quality of the firm's work. The report said Jackson's statement, tape recorded and given under oath, is ``rendered problematic by other testimony and evidence.''

In a prepared statement today, Jackson said, ``No contract has been cancelled, rescinded, terminated, awarded or not awarded due to the personal or political benefits of the recipient.''

Jackson, 61, blocked the 2005 HUD contract with Abt ``for a significant period of time,'' the report said. He has been HUD secretary since March 2004 and was appointed deputy secretary of the agency in June 2001.

Support

The Bush administration today expressed support for Jackson in response to Democratic lawmakers' calls for the secretary's resignation and for a Justice Department investigation.

``President Bush supports Secretary Jackson and appreciates his efforts to provide affordable housing and economic development opportunities for all Americans,'' White House spokeswoman Emily Lawrimore said in a prepared statement.

Federal procurement laws prohibit rewarding or punishing contractors on the basis of their political views.

``We must not allow taxpayer-funded contracts to be handed out to political allies as rewards for loyalty,'' said Representative Henry Waxman, a California Democrat.

Pierce, who has been Jackson's chief of staff since March 2003, wasn't available for comment, HUD spokesman Jerry Brown said. Abt spokesman Peter Broderick didn't respond today to requests for comment.

The investigation followed Jackson's boast during an April speech in Dallas that he had blocked an advertising contract because the contractor criticized Bush. Investigators found no evidence Jackson had interceded on the contract.

``I lied, and I regret having done that,'' Jackson is quoted as saying in the report.

In a statement issued today, Jackson said, ``I sincerely regret my April 28 remarks that led to this investigation.''

The results of the inquiry, which hasn't been officially released by HUD, was reported today by the Washington Post.

HUD inspector general spokeswoman Helen Albert declined comment.

To contact the reporter on this story: Neil Roland in Washington at nroland@bloomberg.net.

Last Updated: September 22, 2006 15:20 EDT