Tags: HUD | OIG | Montoya | GAO

House Financial Services Subcommittee Investigates HUD

By    |   Thursday, 05 Feb 2015 07:53 AM

The House Financial Services Committee's Subcommittee on Oversight and Investigations, chaired for the first time by Rep. Sean Duffy, R-Wis., held a hearing Feb. 4 titled "Exploring Alleged Legal and Ethical Violations at the U.S. Department of Housing and Urban Development" (HUD).

As is usual practice, the introductory witnesses were the inspector general of the accused agency and a representative of the Government Accountability Office (GAO). As set forth in the staff memorandum, the accusations involve improper hiring, conflicts of interest and prohibited lobbying activities, all uncovered last year by HUD's Office of Inspector General (OIG).

In his opening statement Duffy made clear that the accusations brought to light by OIG this year are different and additional to those of last year but display what he called a "cavalier" attitude, with the primary concern being to control the damage to themselves.

Rep. Al Green, D-Texas, responded that HUD should address the concerns raised by OIG, but he does not believe that the findings represent a systemic problem at HUD. He used the remainder of his remarks to repeat his support of the legislative agenda of community banks.

David Montoya, HUD's inspector general, explained that HUD was one of the first 12 agencies to establish this position, which is now commonplace throughout the federal government, and that his office "strives to make a difference in HUD's performance and accountability." He recalled that he had testified last year before the same subcommittee on grass roots lobbying of senators by a former deputy director that his office concluded violated federal law, and he accused HUD of impeding the investigation by threatening OIG agents. Montoya concluded that unfortunately his office has uncovered even more examples of "senior officials bending the rules and engaging in outright misconduct, sometimes with minimal risk that HUD will take appropriate action when it learns of the misconduct."

OIG's further findings extend to alleged misuse of a "mobility program" intended to enable the sharing of HUD personnel with other entities but that OIG found were abused in ways that raised serious conflicts of interest. The Office also found alleged fraud in the diversion of proceeds from sales of HUD properties.

On a positive note, Montoya praised current HUD Secretary Julian Castro for his cooperation with OIG, and he expressed hope that with the help of OIG, the agency will perform in an effective and ethical manner in the future, whereas the agency has heretofore fared poorly in surveys of desirable agencies for which to work.

Emmanuelli Perez, managing associate general counsel of the GAO, followed Montoya by setting forth details of the lobbying activities of HUD's deputy secretary of 17 senators regarding the agency's pending appropriations. In addition to violation of anti-lobbying rules, GAO found a violation of the Anti-Deficiency Act, which is intended to prevent agencies from spending funds for unauthorized purposes.

In response to questions by former subcommittee chairman Rep. Patrick McHenry, R-N.C., Montoya criticized both the agency and its union for promoting employees who have been running private businesses on agency time, and he added that OIG plans to investigate these practices further. In response to a question from Rep. Keith Ellison, D-Minn., he added that OIG plans to look into all 16 of the arrangements HUD has to share employees with outside entities.

Objectively it is fair to report that the previous secretary of HUD, Shaun Donovan, is now the director of the Office of Management and Budget for the entire federal government.

(Archived video, witness testimony and the staff memorandum can be found here.)

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Robert-Feinberg
The House Financial Services Committee's Subcommittee on Oversight and Investigations, chaired for the first time by Rep. Sean Duffy, R-Wis., held a hearing Feb. 4 titled "Exploring Alleged Legal and Ethical Violations at the U.S. Department of Housing and Urban Development" (HUD).
HUD, OIG, Montoya, GAO
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2015-53-05
Thursday, 05 Feb 2015 07:53 AM
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