Local housing authorities like the one that provides public housing for Philadelphia’s indigent illegally lobbied the federal government for funds without disclosing that lobbying, according to a new investigation by the agency’s inspector general.
Numerous housing authorities improperly used federal money to lobby Washington for even more funds. The Department of Housing and Urban Development pays for housing projects, but leaves administration and anti-fraud efforts to the local governments.
The findings follow revelations last month that a former lobbyist for housing authorities had become a top regulator of those same authorities within HUD, and that she had worked to dismantle regulations intended to make sure that money was well-spent and housing projects well-run.
Registered lobbyists reported receiving $3.6 million to lobby for funding for 12 agencies, but agencies themselves failed to report hiring lobbyists for $2.5 million of that. Multiple agencies checked a box indicating that they did not use federal funds to lobby, when in fact they had.
Other cities including Pittsburgh and Portland, Ore., engaged in similar misconduct.
“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 IG found.
The amount of lobbying by public housing authorities could be much greater because the review of third-party lobbyists’ own disclosures doesn’t capture agencies who used in-house personnel rather than K Street lobbyists.
HUD did not catch the problems because it simply relied on local governments’ word instead of verifying it. Even then, HUD didn’t even have copies of half their lobbying forms. Sometimes that’s because the agencies failed to submit them, and HUD never demanded them.
Ironically, the agencies successfully lobbied HUD to begin taking prospective tenants’ word that they are poor and had conducted community service, instead of independently verifying those eligibility factors.
(An Examiner investigation found that that has led to rampant unreported income, with 90 percent of housing project units reviewed having satellite TV. Authorities took no action when informed of where they could find, for example, one housing project resident who owns a fleet of luxury cars.)
“Based on its policy of monitoring via self-certification, it is highly unlikely that HUD would become aware of violations,” the IG wrote.
HUD said verifying that agencies weren’t using federal funds to lobby for more money by searching a Senate database was “overly burdensome,” even though it would only need to do an electronic search for the words “housing authority” once a year.
On Wednesday, days after the investigation on municipal lobbying and weeks after the finding that the lobbyist-turned-regulator had loosened anti-fraud measures, a subcommittee of the House Financial Services Committee held a hearing on those and other cases in which HUD employees had been found to be engaging in theft and other misbehavior, but had not been disciplined.
Democrats on the committee repeatedly invoked the phrase “a few bad apples,” but Inspector General David Montoya said that the problems were systemic and embedded in HUD’s culture because when managers became aware of problems, they did not act swiftly to exorcise the agency of them.
Some high-ranking HUD officials had obstructed his investigations, and one political appointee had even threatened investigators, he said.
Rep. Al Green, D-Texas, said that “we can say that HUD has, well, they have left, and that’s a good thing, right?”
But Montoya said that while some employees involved in wrongdoing no longer worked at the agency, it was because they voluntarily left for other jobs, sometimes even promotions within the government, and not because they were fired.
Two employees were suspended without pay after the IG showed that they had engaged in chronic time-theft by working second jobs while at the office — in one case arranging visits by strippers — but they were given bonuses shortly after.
“It’s my suspicion that they were given these bonuses in order to offset the loss of pay,” Montoya said. “When they did take corrective action it usually amounted to oral counseling, which to us is not a personnel action.”
Even HUD’s ethics counsel was implicated in wrongdoing, and remains on the job.
“He is still the ethics counsel for HUD … we had to interview him 3 times, in his case we quite frankly didn’t think the story was straight,” Montoya said.
Montoya said that Debra Gross, the former lobbyist for housing authorities who had the top policy job in charge of regulating them, violated President Obama’s ban on lobbyists working for the administration within two years of deregistering.
Sandra Henriquez, a HUD assistant secretary who admitted she hired Gross to loosen accountability measures on behalf of housing projects, now works at Ginnie Mae, a federal agency similar to HUD, he said.
Rep. Keith Ellison, D-Minn., dismissed the repeated cases of wrongdoing, saying Congress should send more money to housing projects.
“I am personally appalled by how poorly Congress has funded public housing … there are people living with poor lighting and mold.”
Montoya had a sharp rebuke for him, noting that Gross worked to maximize the amount of money local governments could use to pay administrators while lessening the work they were required to do to make sure properties were well-maintained and safe.
“Well, you’d be very interested to know that one of the issues Debra Gross tried to deregulate are the quality control reviews, which would exacerbate those same issues,” he said.
Rep. Joyce Beatty, D-Ohio, said the violations by “rogue” employees meant that there was “more funding needed for training.”
Montoya said it wasn’t a lack of training that caused employees to act immorally.
“I don’t think more regulations or training are going to influence a person’s conduct. It comes down to how well do they conduct themselves in the workplace, I think it boils down to the person.”
“My major concern is how HUD is dealing with misconduct when they do come across it … what they’re doing to create an ethical culture.”
