Federal watchdogs are flagging the Department of Housing and Urban Development for rampant misconduct by top officials that they say is deeply engrained in the agency’s culture.
From hiring politically connected lobbyists to allowing federal housing authorities to use tax dollars to lobby the government for money, the agency’s problems are all detailed in two new reports by federal auditors that were the subject of a congressional hearing this week.
In one report, HUD’s inspector general found that federal housing authorities, which provide public housing to low-income people, engaged in lobbying activities and then failed to report how much they were spending, sometimes leaving out significant amounts of money.
Nine of the 12 authorities that the IG reviewed failed to report paying registered lobbyists $2.5 million—out of $3.6 million the lobbyists reported receiving from them. This was only a sample, the auditors believe the total amount of undisclosed money going to lobbyists is much higher.
"Potentially 75 percent of agencies for which lobbyists reported they had received payments for lobbying activities failed to disclose the lobbying activities as required," the report said.
Auditors faulted HUD for not discovering that the housing authorities had used federal funds to lobby—saying it should have better oversight over the authorities and the money they’re spending.
Apparently, HUD officials never verified lobbying forms and said more than half were never even submitted, according to auditors.
That report came around the same time a separate investigation found that HUD officials violated federal employment law practices and agency policies by hiring former housing authority lobbyist Debra Gross as a top regulator of the same housing authorities she used to represent. The IG concluded that Gross used her new post at HUD to loosen agency regulations intended to improve oversight of how the housing authorities spend their money.
Separately, another employee who was serving a prison sentence for stalking and threatening murder, was placed on paid administrative leave for at least three years and is still receiving his salary while approval to remove him is pending.
HUD’s IG David Montoya and the Government Accountability Office’s Edda Emmanuelli Perez detailed the many examples of misconduct by HUD officials in testimony before the House Financial Services subcommittee on Wednesday.
“While our investigation did not result in criminal prosecution, it did discern an institutional failure to follow HUD’s own existing internal policies,” Montoya said. “There were breakdowns in communication and in responsibility and a failure to adhere to existing policies and procedures.”
Montoya added that the misconduct, which is so engrained in the agency’s culture, has contributed to HUD’s consistently poor ranking on an annual agency employee satisfaction survey. Last year, HUD scored last place in the mid-sized agency category.
“Misconduct and unethical behavior, particularly by high-ranking officials does not, in my view, serve to enhance this unfavorable image,” he said in prepared testimony.
Still, the agency defended its employees, saying the issues of misconduct involved only a few bad apples.
“The vast majority of HUD’s 8,500 employees are hardworking, ethical and dedicated civil servants,” HUD spokesman Jereon Brown said in a statement. “The misbehavior of a small group of employees erodes the American people’s trust in their government and tarnishes the reputation of HUD’s hardworking employees.”
The reports come several months after Julian Castro took over as HUD secretary. The IG said the majority of misconduct happened before he arrived in Washington. Castro, the former mayor of San Antonio, is seen as a rising star in the Democratic party. He’s been whispered as a potential VP pick if (when) Hillary Clinton makes a White House run in 2016.
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