MAY 30, 2014
It’s been well documented that the nation’s federal housing agency is a bastion of corruption, but now we learn that severe mismanagement at offshoots functioning independently—yet federally funded—in states across the country have also fleeced taxpayers out of hundreds of millions of dollars.
The disturbing figures were delivered to Congress this month by David Montoya, the Inspector General of the U.S. Department of Housing and Urban Development (HUD), the agency that doles out the cash. He testified that his office discovered more than $200 million in questionable spending at local public housing agencies (PHAs) since 2012. PHAs are created by states, operate at the city or county level and administer the federal program, known as Section 8, to provide low-income people with affordable housing.
Many of these local public housing agencies are run by people with “troubled backgrounds” that somehow manage to remain in high-ranking positions at the agencies, Montoya told lawmakers. “Too often, [PHA] officials have few or no qualifications to effectively discharge their responsibilities. Certification and accreditation of key personnel associated with the running of a PHA are missing links in mitigating opportunity for mismanagement and poor governance,” the HUD IG said.
When a local housing agency official is busted for wrongdoing, he or she simply gets shuffled around rather than eliminated, according to the watchdog. “We consistently see bad actors who either were under investigation or had questionable activity move from PHA to PHA, and it just exacerbates these problems that we continue to see,” Montoya said. The IG confirmed that these PHAs essentially operate with no oversight even though they are funded with federal tax dollars. In fact, HUD relies on “self-assessments” and other “self-reported” information as its primary form of oversight.
This insane arrangement is like a fox guarding a henhouse. Actually, it’s even worse because HUD itself is a disaster well known for its many transgressions over the years. The agency is well known for pouring enormous amounts of taxpayer dollars into questionable causes with little concern about how the money is spent. For instance, since 1995 HUD has awarded the fraud-infested Association of Community Organizations for Reform Now (ACORN) nearly $20 million in “housing counseling” grants despite the group’s documented history of corruption. A Judicial Watch investigation found that the money kept flowing even after Congress banned federal funding for ACORN.
Here’s a good one; HUD actually wasted $70 million to help local communities spend their federal money more efficiently! The agency explained the absurd allocation by saying that the budget climate challenged state and local governments to do more with less and they needed help to accomplish this. The extra millions from HUD helped communities “ensure that scarce federal dollars are targeted to where they are needed most and can achieve the highest impact,” according to an agency assistant secretary named Mercedes Marquez.
Under Obama HUD has also launched a number of controversial programs, including a special initiative to help illegal immigrants throughout the United States. HUD also intervened against Arizona’s strict immigration control law by warning that federal housing obligations prohibit “discrimination against protected class members.” The agency even deployed its assistant secretary to intercept a Fremont Nebraska measure banning illegal aliens from renting in its jurisdiction.
Then there’s the contentious St. Paul, Minnesota case in which the agency unscrupulously meddled with a local issue in the name of race. In an effort to maintain its neighborhoods, the city improved housing enforcement by targeting landlords with a history of violations. A minority contractor claimed that the new code enforcement measures reduced the availability of low-income rentals, causing a disparate impact upon African-Americans. St. Paul got slammed with federal lawsuits and the U.S. Supreme Court was expected to hear the case, but the city backed down amid intense federal pressure. Judicial Watch has sued HUD for records that will shed light on how the Obama administration improperly and successfully pressured St. Paul city officials to take the extremely rare action of withdrawing a Supreme Court appeal.
HUD has also been rocked by a number of scandals—under both Democrat and Republican administrations—over the years involving its leadership. George W. Bush’s HUD secretary, Alphonso Jackson, was forced to resign in the midst of a federal investigation involving cronyism. Bill Clinton’s HUD secretary, Henry Cisneros, pleaded guilty to lying to the FBI about payments to a mistress. Ronald Reagan’s HUD secretary, Samuel Pierce, was embroiled in an influence-peddling scandal that saw 16 people, including some of his top aides at the agency, convicted.
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