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Judicial Watch, Inc. is a conservative, non-partisan educational foundation, which promotes transparency, accountability and integrity in government, politics and the law.

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Corruption Chronicles

HUD Director Changed Policies to Help Her Leftwing Group

Despite President Obama’s strict ban on hiring lobbyists, a cabinet-level agency violated regulations—and conflict-of-interest rules—by employing one to run a key policy division while still directing a nonprofit that benefits from the government agency’s decisions.

Her name is Debra Gross and for years she headed a crucial policy office at the U.S. Department of Housing and Urban Development (HUD). During the same time Gross was a top HUD official she was also deputy director of a leftist organization called Council of Large Public Housing Authorities (CLPHA), a national nonprofit that claims to work to “preserve and improve public and affordable housing through advocacy, research, policy analysis and public education.” CLPHA also manages 40% of the nation’s public housing programs, administers 26% of the Housing Choice Vouchers and operates a wide array of other housing programs.

Gross went to town at HUD, pushing to change inconvenient rules and regulations to benefit CLPHA and hiring her like-minded industry pals to work within her division at the agency. The one-time public housing lobbyist also favored industry groups and HUD employees that shared her agenda to the detriment of other stakeholders and agency employees with different views or perspectives. This constitutes a clear violation of government-wide ethics rules. The details of this outrageous case are included in a scathing HUD Inspector General report issued this month. The agency watchdog reveals that it conducted the investigation into the Gross scandal after receiving a “hotline complaint.” HUD created “an inherent conflict of interest” by making Gross responsible for policy and legislative initiatives in a key division known as the Office of Public and Indian Housing, the inspector general writes in its report. It also risked tainting the agency’s rule-making process.

Additionally, HUD failed to obtain required financial disclosure reports, didn’t provide Gross with required ethics training and allowed her to hire permanent HUD employees, the inspector general found. “In her HUD policy-making role, it appeared that the deputy director championed the public housing industry’s regulation relief agenda at HUD while retaining her job at CLPHA,” the report says. “Also, apparent lobbying efforts by CLPHA and other housing industry groups during this period complicated the matter.” The previously mentioned inherent conflict of interest and HUD’s failure to recognize and mitigate it means that the agency cannot know whether the policy decisions enacted during Gross’s tenure were inappropriately influenced or in the best interest of HUD and all its stakeholders, according the report.

Even after Gross acknowledged that in fact she violated HUD’s conflict of interest rules, she failed to recuse herself from dealings that she should not have been involved in and “continued direct communications with colleagues from CLPHA regarding industry matters,” the report says. Furthermore, CLPHA’s director continued to include Gross as a blind courtesy copy recipient in correspondence to HUD executives and others. As an example the inspector general offers that Gross was copied on correspondence addressed to then HUD Secretary Shaun Donovan regarding CLPHA’s concern with two public housing notices.

This case is a great example in support of Obama’s strict ban on hiring lobbyists that can influence government to act according to their agenda. Problem is, the president’s lobbyist prohibition has proven to be a huge joke. In fact, the Obama administration has dozens of former lobbyists in key policy jobs—including his cabinet—and the commander-in-chief has even used his recess-appointment power to sneak some in, though it violates his own ban. Remember that Obama famously said that lobbyists “won’t find a job in my White House.”

As for HUD, the agency has been embroiled in a number of serious scandals—under both Democrat and Republican administrations—over the years so this sort of thing is simply par for the course. Judicial Watch has reported on many of them, including the recent discovery that $200 million had been wasted at local public housing agencies run by people with “troubled backgrounds” in high-ranking positions. Agency leadership has also been rocky over the years. 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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