[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                 INSPECTOR GENERAL REPORT: ALLEGATIONS

                  OF IMPROPER LOBBYING AND OBSTRUCTION

                    AT THE DEPARTMENT OF HOUSING AND

                           URBAN DEVELOPMENT

=======================================================================


                                HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT

                           AND INVESTIGATIONS

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 26, 2014

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 113-65




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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

GARY G. MILLER, California, Vice     MAXINE WATERS, California, Ranking 
    Chairman                             Member
SPENCER BACHUS, Alabama, Chairman    CAROLYN B. MALONEY, New York
    Emeritus                         NYDIA M. VELAZQUEZ, New York
PETER T. KING, New York              MELVIN L. WATT, North Carolina
EDWARD R. ROYCE, California          BRAD SHERMAN, California
FRANK D. LUCAS, Oklahoma             GREGORY W. MEEKS, New York
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
SCOTT GARRETT, New Jersey            RUBEN HINOJOSA, Texas
RANDY NEUGEBAUER, Texas              WM. LACY CLAY, Missouri
PATRICK T. McHENRY, North Carolina   CAROLYN McCARTHY, New York
JOHN CAMPBELL, California            STEPHEN F. LYNCH, Massachusetts
MICHELE BACHMANN, Minnesota          DAVID SCOTT, Georgia
KEVIN McCARTHY, California           AL GREEN, Texas
STEVAN PEARCE, New Mexico            EMANUEL CLEAVER, Missouri
BILL POSEY, Florida                  GWEN MOORE, Wisconsin
MICHAEL G. FITZPATRICK,              KEITH ELLISON, Minnesota
    Pennsylvania                     ED PERLMUTTER, Colorado
LYNN A. WESTMORELAND, Georgia        JAMES A. HIMES, Connecticut
BLAINE LUETKEMEYER, Missouri         GARY C. PETERS, Michigan
BILL HUIZENGA, Michigan              JOHN C. CARNEY, Jr., Delaware
SEAN P. DUFFY, Wisconsin             TERRI A. SEWELL, Alabama
ROBERT HURT, Virginia                BILL FOSTER, Illinois
MICHAEL G. GRIMM, New York           DANIEL T. KILDEE, Michigan
STEVE STIVERS, Ohio                  PATRICK MURPHY, Florida
STEPHEN LEE FINCHER, Tennessee       JOHN K. DELANEY, Maryland
MARLIN A. STUTZMAN, Indiana          KYRSTEN SINEMA, Arizona
MICK MULVANEY, South Carolina        JOYCE BEATTY, Ohio
RANDY HULTGREN, Illinois             DENNY HECK, Washington
DENNIS A. ROSS, Florida
ROBERT PITTENGER, North Carolina
ANN WAGNER, Missouri
ANDY BARR, Kentucky
TOM COTTON, Arkansas
KEITH J. ROTHFUS, Pennsylvania

                     Shannon McGahn, Staff Director
                    James H. Clinger, Chief Counsel
              Subcommittee on Oversight and Investigations

              PATRICK T. McHENRY, North Carolina, Chairman

MICHAEL G. FITZPATRICK,              AL GREEN, Texas, Ranking Member
    Pennsylvania, Vice Chairman      EMANUEL CLEAVER, Missouri
PETER T. KING, New York              KEITH ELLISON, Minnesota
MICHELE BACHMANN, Minnesota          ED PERLMUTTER, Colorado
SEAN P. DUFFY, Wisconsin             CAROLYN B. MALONEY, New York
MICHAEL G. GRIMM, New York           JOHN K. DELANEY, Maryland
STEPHEN LEE FINCHER, Tennessee       KYRSTEN SINEMA, Arizona
RANDY HULTGREN, Illinois             JOYCE BEATTY, Ohio
DENNIS A. ROSS, Florida              DENNY HECK, Washington
ANN WAGNER, Missouri
ANDY BARR, Kentucky
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    February 26, 2014............................................     1
Appendix:
    February 26, 2014............................................    25

                               WITNESSES
                      Wednesday, February 26, 2014

Montoya, Hon. David A., Inspector General, Office of the 
  Inspector General, U.S. Department of Housing and Urban 
  Development (HUD)..............................................     5

                                APPENDIX

Prepared statements:
    Montoya, Hon. David A........................................    26


                 INSPECTOR GENERAL REPORT: ALLEGATIONS


                  OF IMPROPER LOBBYING AND OBSTRUCTION


                    AT THE DEPARTMENT OF HOUSING AND


                           URBAN DEVELOPMENT

                              ----------                              


                      Wednesday, February 26, 2014

             U.S. House of Representatives,

                          Subcommittee on Oversight
                                and Investigations,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 10:08 a.m., in 
room 2128, Rayburn House Office Building, Hon. Patrick McHenry 
[chairman of the subcommittee] presiding.
    Members present: Representatives McHenry, Bachmann, Duffy, 
Hultgren, Barr, Rothfus; Green, Maloney, Sinema, and Beatty.
    Ex officio present: Representative Hensarling.
    Chairman McHenry. The Oversight and Investigations 
Subcommittee of the Financial Services Committee will come to 
order. Without objection, the Chair is authorized to declare a 
recess of the subcommittee at any time. My apologizes to 
Members for my late arrival, and especially to the full 
committee chairman, who is present. I apologize for delaying 
him and my ranking member.
    I will now recognize myself for 5 minutes for an opening 
statement. This morning we welcome David Montoya, the Inspector 
General for the U.S. Department of Housing and Urban 
Development (HUD), to testify on an investigation I requested 
in August 2013, August of last year.
    On July 31, 2013, an e-mail was sent on behalf of the HUD 
Deputy Secretary to ``friends and colleagues,'' calling on them 
to encourage Senators to vote to advance Senate consideration 
of HUD's appropriations bill. Because the e-mail appeared to 
violate Federal anti-lobbying laws, on August 28th of that year 
I requested that the Inspector General investigate this matter 
and advise the committee on whether any laws had been broken.
    On February 18th of this year, the Office of the Inspector 
General provided its report of investigation to the committee. 
Their Inspector General found that Deputy Secretary Jones and 
other HUD officials had acted improperly and that certain HUD 
officials had obstructed the Inspector General's investigation 
and attempted to conceal their improper activities.
    The Inspector General also found that one HUD official was 
actively working to keep information requested by this 
committee from ``the Republicans.'' And that this particular 
HUD official had coordinated his efforts to thwart the 
committee's proper investigative functions with its White House 
Counsel's Office.
    This investigation is an example of Inspectors General 
doing the job that Congress gave them in the 1978 Inspector 
General Act. Offices of Inspector General were established by 
public law as permanent, nonpartisan, and independent offices. 
The Inspector General Act states that the three principal 
purposes of Inspectors General are: first, conducting and 
supervising audits and investigations related to agency 
programs and operations; second, providing leadership and 
coordination and recommending policies for activities designed 
to promote the economy, efficiency, and effectiveness and the 
prevention and detection of fraud and abuse in such programs 
and operations; and third, keeping the agency head and Congress 
fully and currently informed about problems and deficiencies 
related to such programs and the necessity for and progress of 
corrective action.
    The Inspector General's report delivered to this 
subcommittee on February 18, 2014, is an example of how 
inspectors general can play a valuable role in assisting 
Congress in exercising its oversight of the Executive Branch. 
This is a good thing no matter the party of the Presidency or 
the party who controls the House or the Senate. This is about 
good governance.
    However, it is important to note that Inspectors General 
are not required to conduct a review requested by legislators, 
an agency head, the President, or anyone. Inspectors General 
are Cabinet-level agencies, and are independent of the agencies 
they review and to Congress alike.
    This independence is crucial to their achieving their 
mission and should be protected at all costs.
    I would like to thank Inspector General Montoya for being 
here, and I thank you for your service in our government and to 
the American people. And I want to thank you and your staff for 
this important report, and I look forward to your testimony.
    With that we will now recognize the ranking member of the 
subcommittee, Mr. Green, for 5 minutes for an opening 
statement.
    Mr. Green. Thank you, Mr. Chairman. Mr. Chairman, I would 
also like to thank Mr. Montoya for testifying today. Today's 
hearing is an important one. At issue is whether certain 
actions taken by HUD officials were violations.
    The HUD OIG report dated February 18, 2014, outlines 
actions taken by officials at HUD in regards to, among other 
things, e-mails sent requesting that recipients encourage 
certain elected officials to vote in favor of a pending piece 
of appropriations legislation.
    Many of the allegations made in this report are deeply 
concerning and cannot be condoned. I am very much interested in 
knowing what steps HUD has taken to ensure there is no future 
confusion about what is acceptable as it relates to matters 
pending before Congress. I believe that a clear understanding 
of what occurred is necessary before final conclusions are 
drawn.
    To this end, I look forward to an engaging discussion with 
Mr. Montoya about the HUD OIG investigation. I also believe, 
Mr. Chairman, that there are two things we should not do. We 
should not minimize the seriousness of the allegations, and we 
should not exaggerate the final conclusions.
    To do either, would not do justice to the findings and 
conclusions. Again, I believe it is our responsibility to fully 
understand this matter. I trust that the GAO and the OSC will 
present their reports and that HUD will respond to the 
disturbing allegations.
    I thank you, Mr. Chairman, and I yield back the balance of 
my time.
    Chairman McHenry. I certainly thank the ranking member, and 
I will now recognize Mr. Duffy for 2 minutes.
    Mr. Duffy. Thank you, Mr. Chairman, and thank you for 
holding this very important hearing. This committee has sent a 
number of requests for information and documents to many of the 
Executive Branch agencies this committee has jurisdiction over, 
and the Obama Administration has been largely unresponsive to 
this committee's legitimate oversight function.
    This is surprising since President Obama promised the 
American people that he would have the most transparent 
Administration in history and continues to claim an 
unprecedented level of openness. Today's hearing will lay bare 
the falsity of these high-minded claims.
    The report of the Inspector General and his written 
statement demonstrate to the American people just how political 
the Obama Administration is and how political operatives within 
agencies, such as HUD, work hand in glove with the White House 
to thwart legitimate oversight efforts by this committee.
    Although this hearing will open the door to reveal the true 
nature of the Obama Administration's political operatives 
within HUD, I believe that this is only the tip of the iceberg. 
There are political operatives in every Executive Branch agency 
working to ensure that the American people are kept in the dark 
about what is really going on in our Federal Government.
    In fact, this hearing will show that the Administration has 
taken obstruction of congressional investigations to a whole 
new level. I look forward to Mr. Montoya's testimony today, and 
I think it will expose a shocking set of behaviors and 
methodical behavior within HUD to obstruct our investigations 
and our efforts in this committee.
    Once again, Mr. Chairman, I thank you for holding this very 
important hearing, and I yield back.
    Chairman McHenry. I thank my colleague from Wisconsin. 
Thank you. We will now recognize Mrs. Beatty for 2 minutes.
    Mrs. Beatty. Thank you, Chairman McHenry, and Ranking 
Member Green. And Mr. Montoya, thank you again for being here 
today. As my other colleagues expressed this morning, we 
appreciate you coming forth for your testimony here today and 
for the work that you are doing in the Inspector General's 
Office at HUD.
    Like many of my colleagues, I received and became aware of 
the existence of this investigation into the activities of a 
few high-level officials at HUD. So far, the redacted version 
of Mr. Montoya's report that I have seen has not been finalized 
as his office is still waiting for further investigative 
results from the GAO.
    But if even half of the conduct described in the 
preliminary report is substantiated in the final report, I find 
it all very alarming, as you can imagine. Certainly, any 
allegations of clear and direct violation of long-established 
anti-lobbying in appropriations laws, as well as attempts to 
circumvent specific internal HUD policies alone would warrant 
cause for concern.
    But if you add to that any of the findings of obstruction 
of justice, witness coaching, or evidence of tampering, it 
would make it a very disturbing report. And all of this brings 
us back to the very important mission of the Inspector General. 
When Congress passed the Inspectors General Act, it was 
specifically for the purpose of facilitating independent 
investigations such as this which can be used to root out 
waste, fraud, and abuse within Federal Government.
    I applaud your Office for your diligent efforts to preserve 
Americans' faith in their government by working every day to 
improve the integrity of HUD's operation and ensure that 
taxpayers' dollars are spent improving the fabric of our 
society because certainly, none of us should be against the 
work of HUD because of what a couple of individuals may do. I 
yield back.
    Chairman McHenry. We will now recognize Mr. Barr of 
Kentucky for 2 minutes.
    Mr. Barr. Thank you, Mr. Chairman. Inspector General 
Montoya, I have read your report and I am impressed with its 
thoroughness and professionalism, and I want to thank you for 
the outstanding work that you and your team are doing.
    Your report lays out what appears to be a series of actions 
by HUD officials designed to not only obstruct your 
investigation but also to obstruct the legitimate and 
appropriate oversight of this subcommittee and of this 
Congress.
    So I was very surprised and disappointed to see that the 
Department of Justice has declined to prosecute any of the HUD 
officials identified in your report. As an attorney accustomed 
to applying the facts to the law, it appears to me that there 
is more than a good faith argument that certain HUD officials 
identified in your report obstructed your investigation and 
misled your investigators in violation of Federal criminal law.
    It also appears to me that at least one HUD official has 
also obstructed Congress in violation of Federal law. I would 
note that the Federal obstruction of justice statutes as well 
as the Federal statute criminalizing false statements all have 
statutes of limitations of 5 years, so that even if this 
Department of Justice and Attorney General are unwilling to 
enforce the law, perhaps in the next 5 years we will have a 
Department of Justice and an Attorney General willing to uphold 
the law and the integrity of both the Inspector General's 
investigations and the legitimate oversight interests of this 
Congress.
    Thank you, Mr. Chairman, for holding this important 
hearing. I also appreciate the ranking member's recognition 
that it is an important hearing, and that we should not 
minimize the seriousness of these allegations. After all, this 
is not and should not be about partisan politics. Every Member 
of Congress, whether a Republican or a Democrat, and frankly, 
every American, should be concerned and dismayed anytime 
Executive Branch agencies engage in this kind of misconduct and 
attempt to obstruct a legitimate investigation of either an 
Inspector General or the Congress.
    I look forward to the Inspector General's testimony, and I 
yield back the balance of my time.
    Chairman McHenry. I thank my colleague.
    I will now recognize the Inspector General of the 
Department of Housing and Urban Development, the Honorable 
David A. Montoya. Mr. Montoya was sworn in as the HUD Inspector 
General on December 1, 2011. Mr. Montoya's 26-year career has 
been dedicated to public service focused on law enforcement 
with over 16 years of oversight, supervisory, and leadership 
positions, including more than 10 years' experience in the 
Federal senior executive service. Mr. Montoya is a native of El 
Paso, Texas, and a 1986 graduate of the University of Texas at 
El Paso.
    The witness' written statement will be made a part of the 
record.
    We will now recognize Mr. Montoya for 5 minutes.

STATEMENT OF THE HONORABLE DAVID A. MONTOYA, INSPECTOR GENERAL, 
OFFICE OF THE INSPECTOR GENERAL, U.S. DEPARTMENT OF HOUSING AND 
                    URBAN DEVELOPMENT (HUD)

    Mr. Montoya. Thank you, sir. Chairman McHenry, Ranking 
Member Green, and members of the subcommittee, I am David 
Montoya, the Inspector General of the Department of Housing and 
Urban Development, and I want to thank you for the opportunity 
to testify today on our work.
    As Inspector General, my staff and I strive to make a 
positive difference in HUD's performance and accountability. We 
are committed to our statutory mission of detecting waste, 
fraud, abuse, and mismanagement, as well as promoting the 
effectiveness of HUD's programs and operations.
    Our independence and impartiality is imperative and allows 
for clear and objective reporting to the Secretary and to the 
Congress.
    I am here today because my office received a request from 
this subcommittee regarding an e-mail communication sent by 
former HUD Deputy Secretary Maurice Jones on July 31, 2013.
    The e-mail called on recipients to contact specific U.S. 
Senators and encourage them to vote in favor of procedural 
motions to advance consideration of legislation making 
appropriations for Fiscal Year 2014 to the Department of 
Transportation, HUD, and related agencies.
    The e-mail also urged recipients to oppose certain 
amendments and suggested that they encourage named Senators to 
support final passage of the bill. The subcommittee's 
correspondence suggested that the directness and specificity of 
the e-mail appeared to violate well-established Federal 
restrictions on lobbying by Federal agencies, and based on the 
apparent violations of the Federal law, requested that my 
office thoroughly investigate the matter and then advise the 
subcommittee.
    Our subsequent investigation disclosed that the decision to 
send the July 31st e-mail was based on having the HUD Secretary 
or Deputy Secretary engage in a ``more aggressive lobbying 
effort'' relative to legislation or an appropriation. The 
catalyst for this new posture was then-General Deputy Assistant 
Secretary for Congressional and Intergovernmental Relations, 
Elliot Mincberg.
    We determined this e-mail was a grass-roots lobbying 
campaign on a matter that was pending before Congress. At the 
time the July 31st e-mail was drafted and sent, HUD's internal 
policies and guidelines regarding lobbying were long-standing 
and designed to create not only the appearance of ethical 
behavior but to include actual guidelines to ensure ethical 
behavior by all employees of the Department including 
Presidentially-appointed Senate-confirmed officials.
    Ins spite of clear Department policies which were rooted in 
the statutory provisions, our investigation disclosed that the 
interest for HUD to be more aggressive in its lobbying 
activities overrode their adherence to their own long-standing 
policies.
    While our investigation did not result in criminal or civil 
prosecution, it did discern an institutional failure to follow 
HUD's existing internal policies and guidance. At a certain 
level, HUD's actions leave the impression of impropriety and 
ethical lapses.
    The Department should have more fully scrutinized the 
decision to send the e-mail as well as its content and its list 
of recipients. This inattention was particularly evident when 
one examines the types of organizations represented on the list 
of e-mail recipients, which included 46 HUD employees.
    While our investigation determined that including 46 HUD 
employees was inadvertent on the part of the Deputy Secretary, 
the lack of due diligence by those preparing the e-mail may 
have caused the Deputy Secretary to commit a prohibitive 
personnel practice and to violate Federal law prohibiting an 
official from coercing a Federal employee's political 
activities.
    Equally troubling was the fact that the e-mail was sent to 
individuals at organizations that receive HUD funding. Such 
organizations are generally prohibited from using Federal funds 
to carry out certain lobbying activities.
    In fact, one of the recipients, a large public housing 
authority, had recently been found by my office to have 
violated Federal requirements by using Federal funds to carry 
out lobbying activities. Of significant concern to me, and 
something that I will not tolerate as Inspector General or as a 
career law enforcement Federal official, was the interference 
with our investigation, specifically by Mr. Mincberg, who not 
only interrupted and inserted himself into an ongoing witness 
interview, but he threatened to terminate the interview. He 
threatened not to allow the witness to provide documentation as 
requested by investigators and contacted witnesses prior to our 
interview of them to, in my opinion, create the story.
    Finally and most troubling was his threat to have my 
investigators charged merely for doing their duty in an 
attempt, as I see it, to intimidate them into not proceeding 
further. This series of events illustrates what may happen when 
senior government officials veer from the course of ethical 
behavior, skirt the edges, and act in a manner that is not in 
the Department's best interest.
    There were breakdowns in communication and in 
responsibility. The conduct of several individuals ultimately 
resulted in the Deputy Secretary being misled, embarrassed, and 
ill-served. In particular, Mr. Mincberg's obligation to 
exercise sound ethical judgment and to avoid violating well-
established HUD policy was mitigated by his eagerness to be 
``more aggressive'' with regard to lobbying.
    This concludes my oral presentation into the investigation 
regarding the subcommittees' referral. I want to thank the 
subcommittee for your continued interest in our oversight work 
and our efforts to assist the Department in maintaining an 
adherence to ethical behavior. I am happy to answer any 
questions you may have.
    [The prepared statement of Inspector General Montoya can be 
found on page 26 of the appendix.]
    Chairman McHenry. Thank you, Mr. Montoya. I will now 
recognize myself for 5 minutes. Inspector General Montoya, did 
the Deputy Secretary, Maurice Jones, appear to violate Federal 
law that prohibits Federal officials, including Executive 
Branch officials, from forcing citizens to engage in political 
activity?
    Mr. Montoya. By the technical definition of the term, sir, 
yes, but I would like to add that I don't believe he knowingly 
or intentionally did that. I think it fell to the shoulders of 
those who were advising him, sir.
    Chairman McHenry. Those who were advising him. Was Mr. 
Mincberg one of those advising him?
    Mr. Montoya. Yes sir, he was.
    Chairman McHenry. Okay. Now about Mr. Mincberg, in your 
report you detail it as a condition providing a list of 
recipients of this e-mail, which you say is around 1,000 
people. Mr. Mincberg asked your office to withhold this 
information from the House Financial Services Committee. Is 
that correct?
    Mr. Montoya. That is correct, sir.
    Chairman McHenry. Okay. And further, he reached out to 
White House Counsel and stated this to your investigators. Did 
he not?
    Mr. Montoya. I believe the reason he reached out to the 
White House Counsel was more in keeping with whether HUD could 
have an attorney present during our interview of witnesses.
    Chairman McHenry. Okay. So not about this, but in reaction 
to your investigation?
    Mr. Montoya. Correct, sir.
    Chairman McHenry. Okay. Is that a normal protocol for HUD 
to have legal counsel, political appointees in with your 
interviewers?
    Mr. Montoya. It is not normal protocol for the Department 
to have an attorney present. Certainly, if the witness had 
wanted their own personal attorney, I would have allowed it. 
But in this case it was HUD's attorneys who wanted to be in the 
interview, for all intents and purposes to hear what we were 
investigating. That would be inappropriate.
    Chairman McHenry. You also outline that before they reached 
out to the White House Counsel on this matter of HUD legal 
counsel being in these interviews, they also reached out to the 
Department of Justice about this matter, did they not?
    Mr. Montoya. Correct, sir. And I think they reached out to 
the Department of Justice first. Again, their attempt was to 
try to get their attorney into our interviews.
    Chairman McHenry. Okay. And who in the Office of Legal 
Counsel contacted the Department of Justice?
    Mr. Montoya. I believe the individual who would have 
contacted the Department of Justice was Henry Shi. I think he 
is a Special Assistant to the General Counsel.
    Chairman McHenry. Okay. In terms of the list of recipients 
of this e-mail, this lobbying e-mail that is the issue at point 
here, Mr. Mincberg demanded that you withhold this information 
from Congress. And in particular, his language was, he asked 
that you not provide the list of recipients to ``Republicans.'' 
Is that correct?
    Mr. Montoya. That is correct.
    Chairman McHenry. Okay. Would you provide that list to both 
Republicans and Democrats on the House Financial Services 
Committee?
    Mr. Montoya. As an official request from the chairman, sir, 
I believe I can do that, yes, sir.
    Chairman McHenry. Okay. I would make that an official 
request of this subcommittee chairman--
    Mr. Montoya. Yes, sir.
    Chairman McHenry. --that you provide that information to 
us.
    Mr. Montoya. Yes, sir.
    Chairman McHenry. Okay.
    Mr. Montoya. If I may ask, it was my understanding that HUD 
was in the process of providing that information. Sir, may I 
ask if they have not done so?
    Chairman McHenry. HUD is in the process of doing a number 
of responses to committee inquiries, let's say insufficiently 
and very slowly, as we found it seems to be a practice of this 
Administration to do that in a way that I have not previously 
experienced in my 10 years in Washington.
    Furthermore, I would also like to ask you, in your prepared 
testimony and in your report, you describe how Mr. Mincberg 
attempted to obstruct your investigation and convince your 
staff to withhold information from Congress.
    Was Mr. Mincberg involved in any other activities prior to 
the July 31st e-mail which, in your view, impeded inquires 
originating from your office or from Congress?
    Mr. Montoya. We had an occasion previously where three 
committees had independently asked us to look at a matter with 
regards to allegations that the Department was keeping 
witnesses from speaking to it. I believe the committees were 
the House Committee on Oversight and Government Reform, the 
House Committee on the Judiciary, and the Senate Committee on 
the Judiciary. All three had sent me a joint letter asking that 
we look into that matter.
    As it turned out, there was no basis to the allegation. We 
did not find that the Department was, in fact, holding 
witnesses back from Congress. So in that particular case, sir, 
it didn't pan out, but that was one that was mentioned as 
having a concern over.
    Chairman McHenry. Okay. Finally, your office referred its 
findings to HUD so they could consider whether it was 
appropriate to take administrative action against the 
individuals in your report. To your knowledge, have they 
imposed any disciplinary actions?
    Mr. Montoya. No, sir. To my knowledge, they have not, and I 
would suspect that they might actually wait until GAO and the 
Office of Special Counsel opine, but again, I am not clear on 
that.
    Chairman McHenry. And you made referrals to both?
    Mr. Montoya. Yes, sir, we made the referrals to both of 
them.
    Chairman McHenry. Okay. Thank you for your service.
    We will now recognize Mrs. Maloney for 5 minutes.
    Mrs. Maloney. Thank you very much, Mr. Chairman, and Mr. 
Ranking Member. Mr. Montoya, I want to thank you for your 
thorough investigation of this matter, and we truly do need 
more Inspectors General like you. The findings that you made, 
to say the least, are a cause for great concern. And as we wait 
for all the facts and information about this incident to come 
to light, so that we can have a better understanding of how 
this has happened and how we can prevent it from happening 
again.
    And this includes responses from HUD, the Government 
Accountability Office, and the Department of Justice, but I 
would like to state that this report brings to light important 
issues and information relevant to every administrative agency 
and regulator, ensuring there is an appropriate and proper 
effort to educate and train staff on ethics and lobbying 
policies.
    But I specifically would like to ask you, you said that the 
Justice Department declined to open a criminal investigation, 
so there won't be any criminal penalties. What remedies do you 
have available in this case, and what are the possible 
penalties in an administrative proceeding?
    Mr. Montoya. Yes, ma'am. Thank you for the question. With 
regards to DOJ's findings and the remedies, we certainly will 
be working with the Secretary to help with some 
recommendations. I understand that he has already, very swiftly 
after this came to light, included additional ethics training 
for his staff. I think they have already done three.
    With regards to the administrative action, that really is 
up to the Department, ma'am. I couldn't answer what they might 
be thinking or what the level of administrative action could 
be. It could range from really nothing to firing, quite 
frankly, is the full range, but that would not be something in 
which we would engage. That is really a Department decision.
    Mrs. Maloney. Okay. In your opinion, are the penalties 
available in the administrative proceedings sufficient?
    Mr. Montoya. Yes. I believe that the range of 
administrative--including firing, are certainly available to 
them and certainly, I think, severe enough. With regards to 
GAO, depending on their findings, they can certainly levee a 
civil penalty that would require potential payment for the 
expense of this grass-roots lobbying campaign.
    Mrs. Maloney. Your report says that the lobbying e-mail was 
inadvertently sent to 46 HUD employees. Did you interview any 
of these HUD employees who received the e-mail about whether 
they felt that they had been coerced into political activities?
    Mr. Montoya. Yes, ma'am. To clarify, I want to make sure 
that we understand it was inadvertent on the part of the Deputy 
Secretary. I don't believe it was inadvertent on the part of 
those who were preparing the e-mail and the recipient list. I 
believe it was their duty to have vetted this more 
appropriately.
    With regards to interviewing those individuals, no ma'am, 
we did not.
    Mrs. Maloney. I hope that these types of incidents don't 
happen again, and we are all committed to working with you and 
other agencies to make sure that these incidents don't happen 
again, and I look forward to hearing from HUD so that we can 
better understand what you are doing to ensure that these types 
of problems do not continue.
    So I will ask you, right now, what are you doing to ensure 
that this does not happen again?
    Mr. Montoya. I have had several discussions with the 
Secretary, ma'am. I can tell you he was none too pleased and 
none too happy. I think quite frankly he was disappointed in 
his staff. He has committed to me to work with me to try to fix 
this and to ensure it doesn't happen again. I am confident 
that, based on my meetings with him, he is going to do that.
    We will certainly be providing him with some 
recommendations later, I believe, on the set-up of the ethics 
program and how they can do a better job with that.
    Mrs. Maloney. What are the recommendations that you will be 
supplying him? Can you give us a preview?
    Mr. Montoya. I don't know that we have actually come to a 
complete determination on that. I think we want to wait to see 
what GAO and OSC come up with to include that in any 
recommendations, so I don't want to get too far ahead of 
myself. But certainly, it is an area we are considering--it is 
certainly an area where I told him we would offer him some 
recommendations.
    Mrs. Maloney. My time has expired. Thank you.
    Mr. Montoya. Thank you, ma'am.
    Chairman McHenry. I thank my colleague, and we will now 
recognize Mr. Barr of Kentucky for 5 minutes.
    Mr. Barr. Thank you, Mr. Chairman. Mr. Montoya, did your 
investigation reveal the identity of the individuals in the 
White House Counsel's Office with whom Mr. Mincberg 
communicated?
    Mr. Montoya. No, sir, we did not ask that question.
    Mr. Barr. Can you amplify the details of your 
investigation's confirmation that there was a communication 
between Mr. Mincberg and the Office of the White House Counsel?
    Mr. Montoya. I believe it was several attorneys who advised 
my legal staff at the time that they had reached out not only 
to Justice but to the White House Legal Counsel on their 
ability to allow one of their attorneys to sit in with the 
witness interviews.
    To the extent that is--I believe that was the only extent 
that they reached out to the White House, and that was 
proprietary of them not being able to have their attorneys in 
our witness interviews. I don't believe it had to do, as far as 
I know, with the recipient list and whether that should come to 
Congress or not.
    Mr. Barr. So as far as you know, from your investigation, 
the only communication between the White House Counsel's Office 
and Mr. Mincberg related to his participation in witness 
interviews with the IG?
    Mr. Montoya. Not necessarily his, but whether the Office of 
General Counsel could have an attorney sit in on our 
interviews.
    Mr. Barr. Were there any additional communications that you 
are aware of between White House Counsel or any White House 
official and Mr. Mincberg, relating to his activities?
    Mr. Montoya. No, sir, I am not aware of any others.
    Mr. Barr. In following the last line of questioning, are 
you aware of any disciplinary proceedings that have been 
initiated at all, administratively within the Department 
relating to the conduct of Mr. Mincberg?
    Mr. Montoya. No, sir, I don't believe any administrative 
action has been taken--
    Mr. Barr. So at this point, there have been no 
ramifications for Mr. Mincberg's behavior?
    Mr. Montoya. No, sir. But in fairness I believe that they 
may, in fact, be waiting for GAO's opinion and OSC's opinion, 
which I believe would actually maybe have some bearing on 
whatever action would be taken.
    Mr. Barr. And did you officially refer your report to the 
Justice Department or was it just made available?
    Mr. Montoya. We actually went there and briefed them on it. 
I believe we may have provided them some written documentation. 
At the time, we didn't have a full report. It was really more a 
case summary, and we actually go visit with them and brief them 
on the matter.
    Mr. Barr. Okay. And did Justice communicate to you that 
they would decline any prosecution or seeking to impanel a 
grand jury or anything of that nature?
    Mr. Montoya. No. They advised us they would decline, but 
just to be clear, part of the reason that the Department 
declined was really the confusion and the lack of memory by a 
lot of the witnesses. When DOJ decides to take on a case, you 
obviously want strong witnesses who are going to remember what 
happened.
    And in this particular case, there seems to be a lot of 
memory lapses from almost all of our witnesses, so that, I 
think, played into their role for declining.
    Mr. Barr. So lack of clear memories is the principal 
justification for declining to prosecute, is that correct?
    Mr. Montoya. I believe it is certainly one of the factors. 
I don't know that you could make a case if you don't have 
witnesses who can remember what in fact happened.
    Mr. Barr. Did Mr. Mincberg contact any HUD employee to 
discuss the July 31st e-mail after your office began its 
investigation?
    Mr. Montoya. Yes, sir. He actually had several contacts 
with attorneys that we were planning to interview. And it is my 
understanding that the contact was on the premise of, I 
remember my conversation this way, how do you remember it. I 
remember saying this to you. You remember saying this to me. 
Things that as an investigator I think raised a red flag and 
indicated to us that this is part of a subtle way of trying to 
create what the story line would be.
    Mr. Barr. I recognize that Justice has declined to 
prosecute, but you have, obviously, a background in Federal 
legal prosecutorial work. In your judgment, did Mr. Mincberg's 
actions potentially violate Federal law?
    Mr. Montoya. We certainly felt that there was enough there 
to present it to the Department of Justice, sir, but I wouldn't 
certainly second-guess them on their opinions with regards to 
taking a matter criminally.
    Mr. Barr. Let me ask this: If you were a lawyer at Justice 
presented with these same facts, do you think it would justify 
impaneling a grand jury?
    Mr. Montoya. I'm sorry. I don't think I would be able to 
answer that question. I think as I sit here as the IG, I would 
rather maintain my role as the IG and not try to figure out 
what I would have done if I was in DOJ.
    Mr. Barr. Thank you. I yield back.
    Chairman McHenry. Thank you.
    I now recognize Mrs. Beatty for 5 minutes.
    Mrs. Beatty. Thank you, Chairman McHenry and Ranking Member 
Green, and again, to our witness, thank you for being here.
    In your testimony, you used words like, ``veer from the 
course or skirt around the edges,'' acting in a manner that 
could not be in the best interest of government. Reading those 
words it made me think of the question, do you think there was 
a specific culture or expectation within HUD that this type of 
behavior could be tolerated?
    Because, also, if you look to page two in your testimony, 
you talk about Mr. Mincberg in his other position with HUD 
being part of the General Counsel developing language that 
would prohibit employees from doing what appears to be the same 
thing that he did do in this. So was it in the culture, people 
learn it? These are learned scholars. These are attorneys. Do 
you think there was a culture of doing this?
    Mr. Montoya. Ma'am, I don't believe that there is a 
culture. Most, if not all, HUD employees I met are very well-
intentioned, very dedicated, very ethical. Do I believe that at 
least two individuals failed to demonstrate a model of ethical 
behavior? Behavior that would reinforce ethical guidelines in 
the Department? Yes, ma'am, I am concerned about that.
    I am concerned that the publicity this is getting would 
create ethical lapses in the Department because these senior 
officials did so themselves.
    Mrs. Beatty. So if that is the case, can you tell me what 
guidance you think that Mr. Mincberg should have received and 
from whom when he was making his decisions to allegedly engage 
in lobbying activity?
    Mr. Montoya. Ma'am, what our investigation determined was 
Mr. Mincberg himself was one of the drafters of a 2011 
memorandum for Senate confirmation of political appointees and 
it confirmed individuals not lobbying Congress. This was an 
internal policy to HUD that they were not to lobby Congress on 
pending matters.
    So he was very well versed with the policy. In February of 
2013, 5 months before this e-mail, he had asked a question of 
the ethics officials whether, in essence, they could be more 
aggressive in the lobbying. The answer back to him was that, 
again, they had a standing policy that they were not to engage 
in grass-roots lobbying by Presidential appointees. So, he was 
well knowledgeable of the internal policy.
    Mrs. Beatty. Has your Office worked in the past, or 
presently, to coordinate with HUD's General Counsel or Ethics 
Counsel to develop guidance for personnel practices? If so, how 
involved has your Office been in creating such policies, and if 
not, why not?
    Mr. Montoya. No, ma'am, we generally don't do that. That is 
generally something the Department does for itself. In fact, 
for a while, our ethics program ran through theirs. I opted 
shortly after I arrived to create my own ethics shop with my 
own ethics officer. I wanted some independence from the 
Department.
    As the agencies ethics official, the General Counsel will 
be responsible for setting those policies and, in fact, she 
signed all the policies that were in place at the time this 
occurred.
    Mrs. Beatty. Do you think we need any new policies? Is 
there anything that Congress can do, or do you think this was 
just an isolated case?
    Mr. Montoya. I think this was just isolated. I think it was 
an aberration. I think it was pretty much one person who 
decided to act on his own, if you will. I don't know that we 
need to strengthen the ethics laws, m'aam.
    Mrs. Beatty. Let me thank you for your testimony and the 
due diligence you are doing to this, and also, thank you for 
the clarification that to the best of your knowledge, there was 
no connection with attorneys in the Presidents' office to this. 
And let me also say to you that I agree with you that this 
certainly puts the Deputy Secretary and the Secretary in a very 
embarrassing position.
    But also, I have a concern about the programs that are 
mentioned here in the two House bills they were lobbying for, 
to make sure that there is no black eye to those programs that 
serve the people who need these programs because those programs 
have been stellar in my district and in districts across the 
country. So again, thank you, Mr. Chairman, and I yield back.
    Mr. Montoya. Thank you, m'aam.
    Chairman McHenry. I appreciate my colleague. Thank you for 
your comments. The other question was about the obstruction, 
which is a different matter, and we all should have deep 
concern about that.
    We will now recognize Mr. Duffy for 5 minutes.
    Mr. Duffy. Thank you, Mr. Chairman. In no way do I want 
this question to undermine the importance of this hearing, but 
the issue that we are dealing with, an e-mail that was sent out 
and intended to lobby, would you agree is probably not the most 
serious violation that an agency could undergo. Though it can 
be criminal, but on the scope, on the spectrum, not the most 
serious. Right?
    Mr. Montoya. I think I would answer that by saying that in 
the Deputy Secretary's role, he certainly has the legal ability 
to lobby, absolutely.
    Mr. Duffy. I would agree with you, but I guess my point is 
that there is not a great deal of outrage here about Mr. Jones. 
I think people can make mistakes. I do believe that, and this 
very well could have been a mistake.
    What angers me is not what could have been a mistake. What 
angers me is when you investigate what could have been a 
mistake, what could have been a crime, the kind of push-back 
that you get on this level of violation, this level of an 
investigation. The terms of individuals at HUD being aggressive 
with the investigators, obstructing, uncooperative.
    And I guess what I draw from this is if they will obstruct, 
if they will be uncooperative at this level, if there are more 
serious issues taking place in HUD or any other Federal agency, 
to what lengths will they go to obstruct Congress and the 
American people from knowing the behavior of this 
Administration?
    I guess I would throw to you, Mr. Montoya, any insight 
there?
    Mr. Montoya. Sure. I think what I would like to tell you is 
when I first committed to the chairman that I thought I could 
get this done in 30 days, I fully expected that I could do 
that. It turned out after a very quick review that this could 
have easily been just an administrative case. So what happened 
was this white-wash sort of mentality of circle the wagons and 
let's see if we can keep the IG from asking the questions.
    Really, what happened was the Department or at least one 
individual made a Federal case out of what really ultimately 
turned out to be an administrative matter, to be quite frank 
with you.
    Mr. Duffy. And that is why we are here today. This really 
probably wouldn't have gone as far, but for the obstruction of 
individuals within HUD. And looking at Mr. Mincberg and Mr. 
Constantine, these aren't low level guys, right?
    Mr. Montoya. No, sir, they are not.
    Mr. Duffy. They are high-level guys. And when you talk 
about a culture within HUD, culture doesn't come from the 
bottom up, it comes from the top down. And when we talk about 
culture, it concerns me that at the top level, we have 
individuals like Mr. Mincberg and Mr. Constantine who are 
partaking at a pretty aggressive level in obstructing your 
investigation.
    Mr. Montoya. That is correct. And I will go back to my 
earlier statement where the fact that they are not modeling 
ethical behavior concerns me because that does, like you said, 
from the very top, have a very negative impact on a Department.
    Mr. Duffy. Do you know if Mr. Mincberg is an attorney?
    Mr. Montoya. Yes, sir, he is an attorney.
    Mr. Duffy. And so he has a law license then.
    Mr. Montoya. Yes.
    Mr. Duffy. He studied law and passed the Bar somewhere?
    Mr. Montoya. Yes, sir.
    Mr. Duffy. And Mr. Constantine similarly is an attorney, as 
well?
    Mr. Montoya. Yes, sir, that is correct.
    Mr. Duffy. Do you know, have they had any action taken 
against their law licenses?
    Mr. Montoya. No, sir, not to my knowledge, and that 
wouldn't be for us to refer. That would probably be something 
the Department would refer as part of their administrative 
action.
    Mr. Duffy. Is it your testimony that to your knowledge and 
belief, neither Mr. Mincberg nor Mr. Constantine have been 
disciplined by the Secretary?
    Mr. Montoya. Yes, sir. To date, they have not as far as I 
understand, but again I believe that they may in fact be 
waiting for GAO and OSC's opinion on the matter as they--is 
their conduct related to some of what we referred to those 
agencies.
    Mr. Duffy. They may, but there is nothing stopping the 
Secretary from taking action right now disciplining his high-
ranking employees, is there?
    Mr. Montoya. No, sir. There would certainly be nothing to 
stop him if he cared to do so now.
    Mr. Duffy. And I think as many of us read the reports, it 
was shocking. We were shocked at their behavior, and that they 
would have not been disciplined as of yet, and frankly, that 
they still have their jobs is of great concern. And for me, it 
makes me believe that there is a culture of one, stonewalling 
on cooperativeness, but also, if you behave this way, you won't 
be disciplined. Actually, you will be protected. You will be 
coddled.
    There will be no recourse from the Administration for you 
if you push back against Republicans from a committee that has 
the role of providing oversight of these agencies. With that, I 
yield back.
    Chairman McHenry. Mr. Green will defer, so we will go to 
Mr. Rothfus for 5 minutes.
    Mr. Rothfus. Thank you, Mr. Chairman. And thank you, Mr. 
Montoya, for being here with us today. I just want to get a 
little bit better appreciation for this idea of Mr. Mincberg 
going to the White House Counsel's Office. In your opinion, is 
it typical for a person at that level to reach out to the White 
House Counsel's Office on an issue like this?
    Mr. Montoya. I couldn't answer that. Certainly, it was not 
atypical for him to reach out--for someone to reach out to the 
Department of Justice asking a question about whether IGs, 
whether I was right or wrong in allowing their attorneys, but I 
couldn't answer the question about White House Counsel service. 
It is the first time it has come up.
    Mr. Rothfus. As far as the process of Mr. Mincberg, and 
where he was going, did he consult first with the HUD General 
Counsel's Office before reaching out to the White House 
Counsel's Office?
    Mr. Montoya. I don't know if it was Mr. Mincberg who had 
actually reached out. I believe it might have been Henry Shi, a 
Special Assistant to the General Counsel, who actually reached 
out to the White House. I would have to clarify that, but I 
believe it was him. I don't know if he did or did not.
    Mr. Rothfus. Did you investigate whether Mr. Mincberg would 
have reached out to the White House, the liaison's office at 
HUD?
    Mr. Montoya. No, we did not, sir.
    Mr. Rothfus. Your report names a number of additional 
employees besides Mr. Mincberg and Maurice Jones: Peter 
Constantine; Jennifer Szubrowski; Francey Youngberg; and 
Jonathan Harwi. Were any of these individuals career employees 
at HUD?
    Mr. Montoya. I believe the only career employees at HUD 
were the administrative assistant to the Deputy Secretary, and 
Mr. Constantine, the ethics official. All the others were, I 
think, what we call schedule C political appointees.
    Mr. Rothfus. Your report, on page 19, says that Mr. 
Mincberg had said that his office had coordinated with the 
White House Counsel and would need assurance that HUD OIG would 
not turn the recipients' list over to the Republicans on the 
committee. Was it your impression or understanding that the 
directive came from the White House Counsel's Office with 
respect to that, not turning the information over to 
Republicans on the congressional committee?
    Mr. Montoya. No, I don't know that for sure, sir, but just 
to clarify--I was just handed a note by my staff--apparently, 
Mr. Mincberg on one occasion did suggest to our agents that he 
did reach out to the White House on the issue of whether an 
attorney could be present during our interviews.
    With regards to whether he reached out to the White House 
on whether they should disclose the recipient list or not, we 
have no information about that.
    Mr. Rothfus. Again, your report said that his office had 
``coordinated with White House Counsel and would need assurance 
that HUD OIG would not turn the recipients' list over to the 
Republicans on the congressional committee.''
    It is your testimony that you don't know whether or not 
that directive came from the White House Counsel?
    Mr. Montoya. No, we don't, sir.
    Mr. Rothfus. Did you ask whether it did?
    Mr. Montoya. I do not believe we did, sir. I think we just 
took him at face value of what he said.
    Mr. Rothfus. Was there a feeling of fear amongst some of 
the HUD employees that you interviewed?
    Mr. Montoya. I don't know that I could--that my agents 
would suggest to me there was this feeling of fear, to be 
honest with you. We certainly questioned why everybody seemed 
to have amnesia and why nobody could remember what otherwise 
was a one-time event. But with regards to fear, I am not sure.
    I think the closest we ever got to anything like that was 
in our interviews of Mr. Constantine where he made reference to 
having to work with Mr. Mincberg again once he left his acting 
role in the congressional intergovernmental relations and back 
into the office of General Counsel. We did press him on that a 
little bit, on whether that was some fear, and he never 
acknowledged that is what it was and gave us no real clarity.
    Mr. Rothfus. Was it your impression that he felt 
intimidated?
    Mr. Montoya. He never said that. I think, as a career law 
enforcement officer when I read that, I have to say that in my 
professional opinion, yes, I think there was some feeling like 
that.
    Mr. Rothfus. Did any of the other HUD staff who were 
interviewed by your Office feel similar intimidation?
    Mr. Montoya. No, I don't believe so. I don't think any of 
the others suggested anything like Mr. Constantine did.
    Mr. Rothfus. Any opinion as to why Mr. Mincberg's actions 
would have gone unchecked by his supervisors?
    Mr. Montoya. We asked that question, sir, and I appreciate 
you asking, that is a very good question. The only thing, I 
think, we could come up with was that there was this sort of 
feeling that he had this license with some authority, if you 
will.
    Just because of the active role he took in not only 
preparing this e-mail, being the catalyst of it, but quite 
frankly, also being the catalyst for the change in HUD's 
internal policy with regards to ethics and the new policy that 
recently came out.
    In his statement, he suggested to us that he had no 
involvement in re-writing the policy, if you will, after the 
fact, and yet all the other witnesses told us that he was very 
diligent and active in re-writing that policy. A policy that 
really is the responsibility of the ethics office; he is 
Congressional Affairs.
    Mr. Rothfus. Thank you, Mr. Chairman. I yield back.
    Chairman McHenry. Mr. Hultgren for 5 minutes.
    Mr. Hultgren. Thank you, Mr. Chairman. And Mr. Montoya, 
thank you very much for being here. A lot has been covered, but 
just to bring some clarity for myself, I wondered again, if you 
could discuss a little bit--if your Office interviewed HUD 
ethics attorney Peter Constantine while conducting its 
investigation and preparing this report. And what was Mr. 
Constantine's role in advising HUD regarding the ability of HUD 
officials to engage in grass-roots lobbying?
    Mr. Montoya. As the ethics official, it would be my 
contention that his responsibility was to ensure that the 
advice he gave kept everybody in an ethical swim lane, if you 
will. I think the largest concern I have is that is the issue 
kept coming to him. Several conversations with Mr. Mincberg, an 
e-mail request from Mr. Mincberg, or he discuses the words, 
``more aggressive lobbying,'' and in the words, ``Deputy 
Secretary and the Secretary.''
    It just seems to me that as the ethics official, that 
should have drawn a red flag to him, and I think as an 
attorney, as well, he had a responsibility to pin Mr. Mincberg 
down to say, ``Listen, if you are asking for an opinion, I 
expect you to give that to me in writing so I can formally 
respond to you.''
    I think he should have done more to protect ultimately what 
happened to the Deputy Secretary. I think he could have done 
more, in my opinion.
    Mr. Hultgren. How many times did your office interview Mr. 
Constantine?
    Mr. Montoya. We interviewed him, if I can remember 
correctly, no less than 3 times, sir.
    Mr. Hultgren. And how would you characterize Mr. 
Constantine's responses to your Office's questions? Do you 
believe he was forthcoming with HUD OIG and that he provided 
HUD OIG with all relevant information?
    Mr. Montoya. Oh, I can tell you almost every interview was 
different from the one before. I can tell you that when we 
pointedly asked him to provide us any documentation that he 
might have on Mr. Mincberg asking about the aggressive 
lobbying, he did not do so. It wasn't until we confronted him 
with an e-mail that he had actually responded to Mr. Mincberg 
on, just 5 months earlier on this issue, that he then said he 
didn't recall. It is ironic that all of his other staff 
attorneys had that memo and that they provided it to us. But he 
failed to do so.
    Mr. Hultgren. I am wondering, getting back to Mr. Mincberg, 
in your report you have a statement, ``He was less than 
forthcoming regarding his involvement with preparation and 
transition of that e-mail from July 31st.'' I wonder why you 
used those words, ``less than forthcoming?'' Was Mr. Mincberg 
attempting to conceal his involvement in the project, is that 
kind of what was intended by the language he used?
    Mr. Montoya. Yes, sir. I think he was trying to conceal 
just how aggressive and how involved he was, and quite frankly, 
our investigation suggests that he was the catalyst for this 
new sort of position that the Department was trying to 
undertake.
    Mr. Hultgren. You also used that same language, ``less than 
forthcoming regarding his knowledge of the anti-lobbying act 
and his knowledge of related HUD policies against lobbying.''
    Why was this the case? Why did you specifically, in those 
circumstances, believe he was less than forthcoming?
    Mr. Montoya. I think in several interviews, he claimed he 
either didn't know or couldn't remember about the policy, and 
yet he wrote one of the policies. In fact, he helped to write 
one of the policies that specifically dealt with 
Presidentially-appointed, Senate-confirmed individuals, the 
position the Deputy Secretary held. And quite frankly, included 
in that is the language that past Presidentially-appointed and 
Senate-confirmed individuals would not lobby Congress on 
pending legislation.
    He had sent the e-mail or the question to the ethics office 
in February of 2013. He was certainly familiar with that. And 
so, those are two things that I can remember off the top of my 
head that suggested to us that he was not forthcoming.
    Mr. Hultgren. Thank you very much, Mr. Chairman. I have 
completed my questions, and I would be happy to yield back my 
time to the chairman actually--
    Chairman McHenry. I certainly appreciate my colleague 
yielding back to me--or yielding to me. I do want to ask about 
one thing. HUD had an internal policy regarding grass-roots 
lobbying at the time of the July 31st e-mail, did they not?
    Mr. Montoya. Yes, sir, they did.
    Chairman McHenry. And later, after my request of you, they 
revised that policy, did they not?
    Mr. Montoya. It is my understanding that shortly after 
that, they pulled down their ethics guidelines from their Web 
servers and started redrafting the new policy, a policy that 
for all intents and purposes would have not restricted or 
prohibited the activity that they had just undertaken.
    Chairman McHenry. Okay. But at the time of the e-mail, the 
e-mail violated HUD's policy, which existed at that time?
    Mr. Montoya. That is correct, sir--
    Chairman McHenry. Furthermore, when Mr. Mincberg and the 
Department responded to my question about this, they said it 
did not violate the HUD policy because they had revised it 
after. So the question about Mr. Mincberg obstructing your 
investigation, his communication with Congress was, let's just 
say, a bit clouded and white-washed as well.
    My time has expired, but I will come back to this point in 
a moment.
    I now recognize Mr. Green, the ranking member of the 
subcommittee, for 5 minutes.
    Mr. Green. Thank you, Mr. Chairman. Mr. Montoya, I would 
like to thank you on behalf of a good many people. The people 
who work over at HUD, who are not associated with this, I want 
to thank you for not painting with a broad brush. I want to 
thank you for taking a sober approach to this investigation. I 
think it is imperative that when these kinds of investigations 
are conducted, we approach it looking for facts as opposed to 
making allegations that can sometimes tarnish people for life. 
So I greatly appreciate the approach that you have taken, and I 
want to thank you on behalf of a good many people.
    I also would like to acknowledge and reiterate that you 
believe the range of administrative penalties are sufficient. I 
think that was appropriate for you to say because there are 
persons who could conclude that much more than the 
administrative penalties would be merited.
    But I believe that you have stated clearly that given the 
range, which includes firing, those penalties are sufficient. 
You have indicated that the GAO and OSC have not weighed in and 
that it is not inappropriate for HUD to receive all of the 
intelligence before making a decision as to what course of 
conduct to pursue. This makes sense.
    And I just appreciate your acknowledging these things 
because it helps us to tie up a lot of loose ends such that we 
don't leave with the allegations exceeding the conclusions that 
have been reached.
    And finally, I want to thank you for indicating, and I am 
going to have you indicate again, I believe that you have not 
found in your report that there was involvement of the White 
House. Is that a fair statement?
    Mr. Montoya. I'm sorry. Will you repeat that, sir?
    Mr. Green. You have not found that there is involvement 
with reference to the White House in this?
    Mr. Montoya. No, sir.
    Mr. Green. That is a term that is broadly used sometimes 
and just the statement can sometimes create an image of 
something that is not in any way correct. So your position is, 
after your report, a sober report, that there is no involvement 
of the White House. You have not found anything in this report 
that would indicate this. Is that a fair statement?
    Mr. Montoya. That is a fair statement. There is no 
involvement.
    Mr. Green. All right. With that said, Mr. Chairman, I am 
going to yield back the balance of my time, and I look forward 
to our second round.
    Chairman McHenry. And the first round being ended with all 
Members' time being expired, we will now enter into a second 
round, and I ask unanimous consent that we limit questioning to 
5 minutes per side. Without objection, it is so ordered.
    I will begin by recognizing myself for 5 minutes.
    Mr. Montoya, the individuals in charge, in questioning are 
Mr. Mincberg, in particular. Is he a civil servant with civil 
servant protections?
    Mr. Montoya. As a Schedule C, sir--
    Chairman McHenry. A Schedule C? Does a Schedule C political 
appointee have the same protections that career civil servants 
have in terms of hiring and firing?
    Mr. Montoya. I don't know, sir. I would have to get back to 
you on that. That is a good question, but I don't know if I can 
answer that clearly for you.
    Chairman McHenry. They can be fired at any time and they 
are Presidential appointees, so just my understanding--
    Mr. Montoya. But I want to make sure I am clear.
    Chairman McHenry. Right. So at this point, the Secretary 
could fire Mr. Mincberg and have him out the door by the close 
of business? Now let me ask you, if someone on your staff 
committed the acts that Mr. Mincberg did, would you take 
disciplinary action?
    Mr. Montoya. I think I prefer to maintain sort of an 
independent objectivity here, sir, regarding that answer.
    Chairman McHenry. Okay. I will withdraw that question then. 
Now on page 20 of your report--I just want to go through this 
because it is very important--there is an interview that you 
are having with a witness. Mr. Mincberg inserts himself into 
this interview and asks the person, tells the person that they 
should not speak with you. Is that correct? Your investigators?
    Mr. Montoya. He indicates to our investigators that he 
would instruct the individual not to speak to us.
    Chairman McHenry. Okay. And your investigator told Mr. 
Mincberg--
    Mr. Montoya. Ultimately, we told them it potentially could 
be an obstruction of our investigation.
    Chairman McHenry. Okay. At which point--and this is in your 
report on page 20--Mr. Mincberg stated that if he was charged 
with obstruction of justice, he would ensure that the 
investigators were charged, as well, based on their 
``inappropriate actions.''
    Was that a threat? Did your investigators view that as a 
threat?
    Mr. Montoya. Certainly, I think they could have viewed it 
as a veiled threat. We looked at it more as a way to keep them 
from investigating further. So I guess in that regard, it could 
be a veiled threat.
    Chairman McHenry. Okay. A veiled threat. So is this pretty 
standard? You have been doing this for how many years? In an 
investigative function?
    Mr. Montoya. In the IG function, a good 15 years--
    Chairman McHenry. Fifteen, okay--
    Mr. Montoya. This is the first time I have seen something 
from that level of an employee to an investigator. It did 
prompt an immediate phone call from me to the General Counsel, 
that I would not have that--
    Chairman McHenry. The General Counsel. And who was the 
General Counsel?
    Mr. Montoya. Helen Kanovsky.
    Chairman McHenry. Helen Kanovsky, who is now the acting 
Deputy Secretary?
    Mr. Montoya. That is correct, sir.
    Chairman McHenry. Okay. Did she know about HUD's staff 
effort to get the Department of Justice and the White House 
Counsel involved in your investigation?
    Mr. Montoya. Yes, sir. I believe she was aware of those 
calls.
    Chairman McHenry. Okay. In order to--which goes back to 
this question about threats and obstruction of justice related 
to that. And so at a time of some very questionable activity, 
she has received a promotion. Also on page 20 of your report, I 
just want to outline, midway, fourth paragraph down on page 20, 
``Additionally, after receipt of a separate committee request 
to HUD, Mincberg appears to have taken steps to conceal or 
cloud the fact that the July 31st e-mail communication violated 
HUD restrictions on lobbying by Federal employees which was in 
place at that time.''
    ``When he spearheaded the removal of HUD's internal policy 
from the--basically the HUD Web site, this occurred 1 week 
after receiving the committees' letter with the stated 
explanation that the various policies were confusing.''
    It is very interesting because this one individual took it 
upon himself to go to extraordinary lengths to obscure from 
Congress the policies of HUD in place at the time, and 
furthermore to impede your actions and your investigators' 
actions. Is that correct?
    Mr. Montoya. That is correct, and I would add that there 
were a number of attorneys in the Office of Ethics who did not 
believe that policy was confusing.
    Chairman McHenry. Okay. Now additionally, about Maurice 
Jones, this was his e-mail under his name coming from his e-
mail address? And you stated that, in essence, he got bad 
advice. Was that--
    Mr. Montoya. Since you give me the opportunity, I want to 
make sure that we are clear. We found nothing in this 
investigation to suggest that the Deputy Secretary was either 
knowingly or intentionally involved in this sort of large 
grass-roots lobbying campaign that included 46 employees.
    In fact, I think in our interview, he was surprised that it 
went out to so many people. Except for the--
    Chairman McHenry. Perhaps mismanagement but not 
malfeasance?
    Mr. Montoya. I don't know if I would even call it 
mismanagement. I think at the Deputy Secretary level, I 
certainly had countless meetings with him on any number of 
issues. He was always very engaged in matters. I think that, 
quite frankly, he was hoping and depending on his staff, 
certainly the head of Congressional Affairs and certainly the 
head of Ethics, to properly advise him. I think that is where 
the failure is here.
    I don't know that I would want to throw it at his feet. We 
could all say he is ultimately responsible, but quite frankly, 
we found nothing in this that would suggest to us that it was 
his fault, per se.
    Chairman McHenry. Okay. Now the question is about the 
obstruction piece.
    Mr. Montoya. Right.
    Chairman McHenry. Is that correct? Is it just Mr. Mincberg 
involved in that?
    Mr. Montoya. It is just Mr. Mincberg with regards to us 
having to suggest to him that his actions would potentially 
result in an obstruction matter. He was the only one with 
regard to that.
    Chairman McHenry. Okay. Thank you for clarifying that. I 
did want to give you the opportunity to do that. With that, I 
ask unanimous consent--I took 6\1/2\ minutes, so I will ask 
unanimous consent that the ranking member can control 6\1/2\ 
minutes. Without objection, it is so ordered.
    Mr. Green. Thank you, Mr. Chairman. Let's continue with the 
report and let's move to page 23, which has at the bottom of 
the page an area titled, ``Disposition of HUD OIG Report of 
Investigation.'' And what I would like to do, Mr. Montoya, is 
simply go through the disposition because the conclusions are 
also things that you support in your report. And the first 
deals with Deputy Secretary Jones, and you recently spoke of 
his acting with a lack of malice aforethought, which means that 
he didn't with intentionality do any of these acts, that he was 
receiving advice and he was acting.
    But as to Mr. Jones, the Deputy Secretary, DOJ determined 
that there was nothing in the material warranting the opening 
of a criminal investigation, and you have indicated as much in 
your report. Is that a fair statement?
    Mr. Montoya. Yes, sir, that is correct.
    Mr. Green. All right. Let's move on now to some other 
persons. Mincberg, Constantine, this sounds like a law firm, by 
the way, Mincberg, Constantine, Szubrowski, Youngberg and 
Harwi. DOJ determined that there was nothing in the--and the 
writing is small and my eyes are old--material warranting the 
opening of a criminal investigation on November 25, 2013. DOJ 
declined further review of this matter. Is that a true and 
accurate statement?
    Mr. Montoya. That is correct, sir.
    Mr. Green. All right. Moving on to the Federal 
appropriations law. You have forwarded your report to GAO for 
its use in responding. Is that a fair statement, sir?
    Mr. Montoya. Yes, sir, with regards to any violation of 
Federal appropriations law.
    Mr. Green. Exactly. And as to Deputy Secretary Jones, you 
have provided a report to the Office of Special Counsel for use 
in determining whether there was a violation. Is that a fair 
statement?
    Mr. Montoya. Of a prohibitive personal practice? Yes, sir.
    Mr. Green. Okay. And finally, I think the last 14 words of 
your report are important and I will read the last 14 words. 
They are, ``This report was forwarded to the HUD Secretary for 
any administrative actions deemed appropriate.'' And you have 
concluded that administrative actions are a fair remedy with 
reference to this report.
    Is that a fair statement?
    Mr. Montoya. I certainly can't speak for GAO or OSC. With 
regards to our report, administrative actions, yes, sir.
    Mr. Green. Yes, sir. As to your report? And you stand by 
your report?
    Mr. Montoya. Yes, sir, I do.
    Mr. Green. Okay. I thank you again, and I yield back the 
balance of my time.
    Mr. Montoya. Thank you, sir.
    Chairman McHenry. I thank the ranking member, and I would 
advise the ranking member that I will be sending a letter this 
afternoon asking for the Secretary of HUD to come before us to 
explain what actions and remedies he has taken. And I would 
gladly welcome the ranking member in joining me in that 
request.
    Mr. Green. I will look forward to perusing the document and 
making a decision after having the benefit of a perusal.
    Chairman McHenry. I thank the ranking member, and I would 
certainly take his legal advice as a career judge, and Texas 
makes a different brand of judges--and our Texas witness would 
say that, I'm sure.
    This is Mr. Montoya's second appearance before our 
subcommittee, and he has appeared before Congress multiple 
times, so thank you, again, for your testimony.
    And without objection, I would just take a moment of 
personal privilege to thank the Inspector General for his 
career of service in our government and for steadfast work and 
making sure that these important programs within your purview 
are well-executed and the taxpayer dollars are preserved and 
the delivery is actually done. And so, I thank the Inspector 
General for that.
    Mr. Montoya. Thank you, sir, for your kind words.
    Chairman McHenry. Thank you.
    The Chair notes that some Members may have additional 
questions for this witness, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to this witness and to place his responses in the record. Also, 
without objection, Members will have 5 legislative days to 
submit extraneous materials to the Chair for inclusion in the 
record.
    And without objection, the hearing is now adjourned.


    [Whereupon, at 11:18 a.m., the hearing was adjourned.]

                            A P P E N D I X


                           February 26, 2014

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