    [House Hearing, 118 Congress]
    [From the U.S. Government Publishing Office]

                          PHA OVERSIGHT: HOW SCANDALS
                             AND MISMANAGEMENT HARM
                            RESIDENTS AND TAXPAYERS
    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HOUSING AND
                                    INSURANCE

                                     OF THE

                        COMMITTEE ON FINANCIAL SERVICES

                         U.S. HOUSE OF REPRESENTATIVES

                        ONE HUNDRED EIGHTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  MAY 22, 2024

                                   __________

                               Serial No. 118-93

           Printed for the use of the Committee on Financial Services

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

                                www.govinfo.gov

                                    __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    56-520 PDF                  WASHINGTON : 2026
    -----------------------------------------------------------------------------------

                     HOUSE COMMITTEE ON FINANCIAL SERVICES

                   PATRICK McHENRY, North Carolina, Chairman

    FRENCH HILL, Arkansas, Vice          MAXINE WATERS, California, Ranking
        Chairman                             Member
    FRANK D. LUCAS, Oklahoma             SYLVIA R. GARCIA, Texas, Vice
    PETE SESSIONS, Texas                     Ranking Member
    BILL POSEY, Florida                  NYDIA M. VELAZQUEZ, New York
    BLAINE LUETKEMEYER, Missouri         BRAD SHERMAN, California
    BILL HUIZENGA, Michigan              GREGORY W. MEEKS, New York
    ANN WAGNER, Missouri                 DAVID SCOTT, Georgia
    ANDY BARR, Kentucky                  STEPHEN F. LYNCH, Massachusetts
    ROGER WILLIAMS, Texas                AL GREEN, Texas
    TOM EMMER, Minnesota                 EMANUEL CLEAVER, Missouri
    BARRY LOUDERMILK, Georgia            JAMES A. HIMES, Connecticut
    ALEXANDER X. MOONEY, West Virginia   BILL FOSTER, Illinois
    WARREN DAVIDSON, Ohio                JOYCE BEATTY, Ohio
    JOHN W. ROSE, Tennessee              JUAN VARGAS, California
    BRYAN STEIL, Wisconsin               JOSH GOTTHEIMER, New Jersey
    WILLIAM R. TIMMONS, IV, South        VICENTE GONZALEZ, Texas
        Carolina                         SEAN CASTEN, Illinois
    RALPH NORMAN, South Carolina         AYANNA PRESSLEY, Massachusetts
    DANIEL MEUSER, Pennsylvania          STEVEN HORSFORD, Nevada
    SCOTT FITZGERALD, Wisconsin          RASHIDA TLAIB, Michigan
    ANDREW R. GARBARINO, New York        RITCHIE TORRES, New York
    YOUNG KIM, California                NIKEMA WILLIAMS, Georgia
    BYRON DONALDS, Florida               WILEY NICKEL, North Carolina
    MIKE FLOOD, Nebraska                 BRITTANY PETTERSEN, Colorado
    MICHAEL LAWLER, New York
    ZACHARY NUNN, Iowa
    MONICA DE LA CRUZ, Texas
    ERIN HOUCHIN, Indiana
    ANDREW OGLES, Tennessee

                        Matthew Hoffmann, Staff Director

                                     ------

                     SUBCOMMITTEE ON HOUSING AND INSURANCE

                        WARREN DAVIDSON, Ohio, Chairman

    MONICA DE LA CRUZ, Texas, Vice       EMANUEL CLEAVER, Missouri, Ranking
        Chairwoman                           Member
    BILL POSEY, Florida                  NYDIA M. VELAZQUEZ, New York
    BLAINE LUETKEMEYER, Missouri         RASHIDA TLAIB, Michigan
    RALPH NORMAN, South Carolina         RITCHIE TORRES, New York
    SCOTT FITZGERALD, Wisconsin          AYANNA PRESSLEY, Massachusetts
    ANDREW R. GARBARINO, New York        SYLVIA R. GARCIA, Texas
    MIKE FLOOD, Nebraska                 NIKEMA WILLIAMS, Georgia
    MICHAEL LAWLER, New York             STEVEN HORSFORD, Nevada
    ERIN HOUCHIN, Indiana                BRITTANY PETTERSEN, Colorado

                            C  O  N  T  E  N  T  S

                                  ----------

                            Wednesday, May 22, 2024
                               OPENING STATEMENTS

                                                                       Page
    Hon. Warren Davidson, Chairman of the Subcommittee on Housing and
      Insurance, a U.S. Representative from Ohio.....................     1
    Hon. Emanuel Cleaver, Ranking Member of the Subcommittee on
      Housing and Insurance, a U.S. Representative from Missouri.....     3

                                   STATEMENTS

    Hon. Steven Horsford, Member of the Subcommittee on Housing and
      Insurance, a U.S. Representative from Nevada...................     4
    Hon. Maxine Waters, Ranking Member of the Financial Services
      Committee, a U.S. Representative from California...............   103

                                   WITNESSES

    Mr. Bill Slover, Principal, AVCO Interests, and Former Chair of
      the District of Columbia Housing Authority (DCHA) Board........     4
        Prepared Statement...........................................     7
    Mr. Matt Doherty, Former Executive Director, Atlantic City
      Housing Authority (ACHA).......................................    87
        Prepared Statement...........................................    89
    Mr. Georgi Banna, General Counsel and Director of Strategic
      Initiatives, National Association of Housing and Redevelopment
      Officials (NAHRO)..............................................    91
        Prepared Statement...........................................    93

                                    APPENDIX

                  ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

    Hon. Warren Davidson:
        Statement from Representative Van Drew from New Jersey.......   122
    Hon. French Hill:
        Representative French Hill's letter to Secretary Fudge dated
          September 7, 2023..........................................   123
        Dr. Kimberly McClain's October 6, 2023 follow up letter to
          Representative French Hill.................................   126
        Representative French Hill's letter to Secretary Fudge dated
          January 12, 2024...........................................   129
        Dr. Kimberly McClain's January 30, 2024 follow up letter to
          Representative French Hill.................................   131
        HUD'S responses to Representative French Hill's letter dated
          February 27, 2024..........................................   132
    Hon. Maxine Waters:
        The Council of Large Public Housing Authorities (CLPHA)......   135
    Hon. Steven Horsford:
        Grand Opening of Hafen Village...............................   137

                     RESPONSES TO QUESTIONS FOR THE RECORD

    Written responses to questions for the record from Mr. Matt
      Doherty
        Representative Maxine Waters.................................   141
    Written responses to questions for the record from Mr. Georgi
      Banna
        Representative Maxine Waters.................................   142
        Representative Sylvia Garcia.................................   143

                                  LEGISLATION

    H.R. 6550, to require the Inspector General to produce an updated
      report on the status of the New York City Housing Authority....   144

                          PHA OVERSIGHT: HOW SCANDALS
                             AND MISMANAGEMENT HARM
                            RESIDENTS AND TAXPAYERS

                                   ----------

                            Wednesday, May 22, 2024

                 U.S. House of Representatives,
                 Subcommittee on Housing and Insurance,
                               Committee on Financial Services,
                                                        Washington, DC.

        The committee met, pursuant to notice, at 10:02 a.m., in
    room 2128, Rayburn House Office Building, Hon. Patrick McHenry
    [chairman of the committee] presiding.
        Present: Representatives Davidson, Fitzgerald, Garbarino,
    Flood, Lawler, De La Cruz, Cleaver, Waters, Tlaib, Pressley,
    Horsford, and Pettersen.
        Chairman Davidson. The Committee on Housing and Insurance
    will come to order.
        Without objection, the chair is authorized to declare a
    recess of the committee at any time.
        This hearing is entitled, ``The Public Housing Authority
    Oversight: How Scandals and Mismanagement Harm Residents and
    Taxpayers.''
        Without objection, all members will have 5 legislative days
    within which to submit extraneous materials to the chairman for
    inclusion in the record.
        I will now recognize myself for 5 minutes for an opening
    statement.

      OPENING STATEMENT OF HON. WARREN DAVIDSON, CHAIRMAN OF THE
     SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE
                               FROM OHIO

        Today's hearing is about a familiar topic: the ongoing
    challenges of providing housing to our constituents. That has
    frequently been explored in our previous eight housing
    hearings, but today we will look at the problem from a
    different angle. As you can tell from its title, ``PHA
    Oversight, and How Scandals and Mismanagement Harm Residents
    and Taxpayers,'' today's hearing will focus on why so many
    local housing agencies fail to do the job we pay them to do,
    namely, competently running our Federal housing programs. This
    not only hurts residents and wastes taxpayer resources, it is
    also an actual violation of Federal law. It does not suggest or
    aspire to, it does not just encourage, but it actually requires
    public housing authorities to provide ``decent, safe, and
    sanitary housing.'' That is the obligation, but instead of
    successes, too often we get horrible stories about
    incompetence, mismanagement, and overt criminal fraud.
        Some recent headlines from the Washington Post: ``D.C.
    Overpays Landlords Millions to House the City's Poorest,'' from
    February 2023. ``D.C. Residents Face Long Housing Aid Delays as
    3,100 Vouchers Sit Unused,'' from October 2023; or how about
    this from The Press of Atlantic City, ``Atlantic City Housing
    Authority Still Struggles With Heat,'' in November 2023; or
    ``Public Housing Tenants Beg City Council for Action on
    Atlantic City Housing Authority,'' from December 2023; and
    elsewhere, ``FBI Searches the Office of Nonprofits Connected to
    Little Rock Housing Authority,'' from the Arkansas Times in
    January 2024. ``Corruption, Sewage, Apathy: A Federal Watchdog
    on What He Saw at NYCHA,'' the New York Public Housing
    Authority from the New York Times in March 2024; or who could
    forget this from the New York Post: ``Seventy Current and Ex-
    NYCHA Workers--New York Public Housing Authority workers--
    Cuffed in Historic Decade-Long $2 Million Bribery and Extortion
    Bust,'' from February 2024. I believe that is the largest-ever
    bust for bribery in the history of our country.
        These troubling reports all seem to have a few things in
    common. First, they all involve well-known public housing
    agencies in prominent places like Washington, DC, Atlantic
    City, and other places, but it happens in small towns. I talked
    to a mayor in Toledo who is dealing with the same kinds of
    problems. Second, alarms have been sounded about these failures
    multiple times to little effect. In fact, two of our witnesses
    today, Mr. Slover and Mr. Doherty, even lost their jobs for
    sounding these alarms. Third, local officials often ignore
    these problems, and when they do reach out, Housing & Urban
    Development (HUD), which oversees these public housing
    authorities, often does too little too late or sometimes
    nothing at all to reform these terrible abuses.
        Today, we are here in an attempt to correct some of that
    and to give a platform to at least two former public housing
    authority employees on why some failing public housing
    authorities are so resistant to reform. We welcome their
    testimony, and I hope to see us use it to reinforce what should
    be an obvious point. If you have a broken public housing
    authority, one that is mismanaged or even corrupt, there simply
    is no amount of new money that you can pour into it and expect
    a different result. It is like pumping gas into a car with a
    broken engine or maybe more like pouring whiskey on an
    alcoholic. You are not going to get anywhere until you fix the
    underlying problem.
        Thankfully, there are men like Mr. Slover and Mr. Doherty
    who are willing to go on record and talk about why we must fix
    our public housing authorities, and we have a Congressmen, like
    our colleague, Jeff Van Drew from New Jersey, who reached out
    to us about the problems in Atlantic City, and, frankly, others
    who have reached out about problems in their areas. They
    continue to fight for their residents and for the people who
    are dependent upon a safety net for a time to do what we are
    paying for--decent, safe, and sanitary housing--and I look
    forward to this hearing today. I look forward to hearing what
    our whistleblowers have to say and collaborating with our
    colleagues to address these problems. I yield back.
        I now recognize the ranking member, Mr. Cleaver, from
    Missouri, for 4 minutes for his opening statement.

     OPENING STATEMENT OF HON. EMANUEL CLEAVER, RANKING MEMBER OF
           THE SUBCOMMITTEE ON HOUSING AND INSURANCE, A U.S.
                      REPRESENTATIVE FROM MISSOURI

        Mr. Cleaver. Thank you, Mr. Chairman, and I appreciate the
    fact that you called this hearing today. I would first like to
    point out that this is a hearing that is very personal to me. I
    grew up in public housing myself. I know the subject
    academically and experientially. I understand what it means for
    a family to have access to housing that is safe, decent, and
    affordable.
        HUD assists nearly 5 million households through tenant-
    based vouchers, project-based subsidies, and the provision of
    public housing administered through public housing authorities.
    Public housing has helped stabilize millions of families,
    including mine, who would otherwise lack access to affordable
    housing or be forced into homelessness. In the face of a
    worsening housing supply and affordability crisis, it is more
    important than ever that we preserve public housing programs
    and, to be clear, when the housing provided to an American
    family is either unsafe or indecent, it is unacceptable.
        Two months before I was sworn in as mayor of Kansas City,
    the Housing Authority of Kansas City, Missouri was placed into
    Federal receivership where it stayed for 20 years. It was a
    terrible, terrible period because we were not in charge of the
    housing authority, and even though the problems occurred under
    my predecessor, the issue was clear. We had a problem, and it
    was not being dealt with, and even receivership made it
    difficult, contentious, costly, and lengthy; so, I am very
    familiar with the challenges public housing authorities face.
        I would like to conclude by making two points. One-two
    percent of public housing authorities right now today during
    this hearing are troubled, and while there are high-profile
    cases for the average resident in public housing, it is the
    chronic underfunding of public housing that is having the
    largest direct impact on their lives. This includes a capital
    needs backlog of over $60 billion with a ``B,'' but also
    includes underfunding the Agency in a way that, identified by
    the HUD Inspector General (IG), inhibits the capacity of the
    Agency to deliver on its growing mission and program
    responsibilities. We should not minimize the impact of budget
    cuts on the conditions, accessibility, and capacity to properly
    administer public housing. It is the responsibility of the
    public housing authority to ensure that their housing programs
    are properly managed and the responsibility of HUD to hold
    public housing authorities accountable.
        I received an update this morning from the Agency on the
    status of engagement with troubled public housing authorities.
    We all have understanding concerns. There is a bipartisan
    agreement that some of the failure we see at the public housing
    authority is unacceptable. I appreciate that this hearing is
    asking for the IG to provide and update this subcommittee on
    the NYCHA, but I think we can do more than take HUD and HUD IG
    recommendations and drive improvements, and I am interested in
    hearing from all the witnesses on how we can support the Agency
    in achieving its mission. I yield back.
        Chairman Davidson. I thank the ranking member. The chair
    now recognizes the gentleman from Nevada, Mr. Horsford, 1
    minute for an opening statement.

     STATEMENT OF HON. STEVEN HORSFORD, MEMBER OF THE SUBCOMMITTEE
      ON HOUSING AND INSURANCE, A U.S. REPRESENTATIVE FROM NEVADA

        Mr. Horsford. Thank you, Chairman and to the ranking
    member, for holding this hearing, and thank you to our expert
    witnesses for appearing before the committee. I agree with my
    constituents who feel that the rent is too damn high and that
    our public housing authorities have a vital role to play for
    21.6 million American households spending over 30 percent of
    their monthly income on rent. These are the vital issues that
    we need to address today, not only the access to vouchers and
    landlords who are refusing to accept them, but the impact that
    it has on veterans, single households led by women
    predominantly, and families who are trying to get into
    affordable housing. I look forward to our full robust hearing,
    and I thank the witnesses for being here today.
        Chairman Davidson. I thank the gentlemen. Today we welcome
    the testimony of Bill Slover. Mr. Slover is a principal at AVCO
    Interests and former chairman of the District of Columbia
    Housing Authority Board. We also welcome Matt Doherty. Mr.
    Doherty is a former executive director of the Atlantic City
    Housing Authority. We also welcome Georgi Banna. Mr. Banna is
    general counsel and director of strategic initiatives at the
    National Association of Housing and Redevelopment Offices,
    NAHRO.
        We thank each of you for taking time to be here. Each of
    you will be recognized for 5 minutes to give an oral
    presentation of your testimony. Without objection, each of your
    written statements will be made part of the record.
        Mr. Slover, you are now recognized for your opening
    remarks.

     STATEMENT OF MR. BILL SLOVER, PRINCIPAL, AVCO INTERESTS, AND
      FORMER CHAIR OF THE DISTRICT OF COLUMBIA HOUSING AUTHORITY
                              (DCHA) BOARD

        Mr. Slover. Thank you. Chairman Davidson, Ranking Member
    Cleaver, and members, thank you for the opportunity to discuss
    the impact failing public housing authorities have on housing
    access. My name is Bill Slover, and I have over 30 years of
    experience in public and private sectors. Today I will focus on
    my 10 years of service in the D.C. Housing Authority Board,
    emphasizing the challenges I faced, the rampant waste, fraud,
    and abuse I saw, and the recommendations for reform.
        DCHA's mandate is broad and critical, housing over 18,000
    families with an annual budget of $500 million. When I was
    appointed chairman in 2009, my goal was to increase access to
    quality housing for DCHA's clients. Immediately recognizing the
    need for fundamental change, I called for greater
    accountability and improved operational and financial
    management. My efforts faced quick resistance, resulting in my
    swift removal as chair, ending my term without tangible
    progress. Rejoining the board in 2015 as the advocate
    representative, one of two independent seats on the Board, I
    again pushed for efficiencies reform, better financial
    stewardship from a more protected perch.
        Despite my best efforts, the Agency's decline was
    accelerating. By the fall of 2021, having exhausted all other
    avenues, I reached out to HUD for help, resulting in a scathing
    review published in September 2022, highlighting DCHA's
    systematic failures through 80-plus findings that left no part
    of the Agency unscathed, validating my concerns.
        HUD identified five principal issues contributing to DCHA's
    failure: inadequate oversight, poor management, lack of
    expertise, to name a few. In short, the Agency was failing on
    all fronts. Rather than addressing HUD's findings
    collaboratively, the mayor and the city council's solution was
    to disband the independent board that rang the alarm bells,
    replacing it with 100-percent of mayoral appointees without a
    single public hearing. This drastic response removed all
    independent voices from the Board, sending a loud and clear
    message to anyone and everyone that any attempts to get in the
    way of the city's agenda would not be tolerated, and that even
    independent seats on an independent agency's board could be
    eliminated very easily, leaving little doubt who was in charge.
        Eighteen months later, there is no evidence of reform.
    Recent news highlights continued mismanagement in use of
    algorithms of all things to determine rental rates. The need
    for decisive intervention has become more acute. Millions of
    dollars continue to be wasted, and HUD continues to be slow to
    cure. Despite my experience, I am a strong believer in Public
    Housing Authorities (PHAs). The structure is there. We need
    better leadership. Through PHAs, HUD is the largest owner and
    operator of multifamily real estate in the country. It is
    important to remember that HUD does own these public housing
    units and directly funds housing subsidy payments, and because
    of that, they have a fiduciary obligation to make sure that
    PHAs maximize the value of those resources. HUD does not seem
    to understand this. Their hands-off funder approach has failed
    far too long. How HUD has run its PHAs is nothing short of
    total failure. In far too many instances, it has been allowed
    to go on for far too long.
        How long have we been talking about HUD's failures? It is
    simple math. If a housing agency is inefficient, spending more
    money on basic operations, fewer people get housed, negatively
    impacting the entire housing space, costing more money, less
    production. Translation: failure. HUD needs to reform its
    management of PHAs as the current process is failing far too
    often. Absent this, no amount of money pumped into PHAs will
    result in measurable progress, increased access to housing.
    Money will not solve what is a failure of execution compounded
    by lack of oversight and accountability and leadership.
        HUD should do three key things before providing any
    additional funds to PHAs. HUD must revamp its management of
    PHAs, creating a structure that tracks results and triggers
    intervention as soon as an agency gets off track; act like the
    fiduciary that it is; change the governance structure. PHA
    governing bodies need to be held directly accountable to HUD
    rather than local municipal leaders. HUD is conceding its
    fiduciary of billions of taxpayer dollars to local governments,
    which is no way to exercise fiduciary responsibility and have
    resulted in very poor outcomes. Demand qualified leaders until
    PHAs can execute the basic core functions of running a real
    estate company, they will continue to underperform. PHAs are
    complex operating businesses and need to be run as such.
        I hope my experience can help inform this committee as it
    considers how to best allocate taxpayer dollars toward our
    Nation's housing challenges. PHAs represent a unique
    opportunity for the Federal Government to participate in the
    housing crisis. Real reform could have a meaningful impact on
    so many people. We owe it to them to try. We need to take stock
    in why housing costs are so high and production is so low and
    begin to make the market corrections needed. HUD needs to be
    held accountable for the money they deploy.
        I will leave one last thing. DCHA is considered a high-
    performing agency by HUD, and in the report that the HUD did,
    they indicated that if it were not considered a high-performing
    agency, it would be in receivership. I will just leave you with
    that, so thank you.

        [Prepared statement of Mr. Slover follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Davidson. It is an interesting data point. Thank
    you, Mr. Slover. Mr. Doherty, you are now recognized for your
    opening remarks.

       STATEMENT OF MR. MATT DOHERTY, FORMER EXECUTIVE DIRECTOR,
                 ATLANTIC CITY HOUSING AUTHORITY (ACHA)

        Mr. Doherty. Thank you. Thank you, Chairman Davidson and
    Ranking Member Cleaver for having me today, along with the
    other members of the committee. Thank you for allowing me the
    opportunity to present a firsthand account of the corruption
    and mismanagement I encountered at the Atlantic City Housing
    Authority, ACHA, which has grievously impacted the lives of the
    most economically vulnerable Americans. It is critical to
    acknowledge that ACHA is not just the housing authority, it is
    also the largest slumlord in Atlantic City. If they were a
    private concern, they would have been put out of business a
    long time ago.
        After my service as mayor in Belmar, New Jersey from 2011
    to 2018, and subsequent role as executive director of the New
    Jersey Casino Reinvestment Development Authority in Atlantic
    City, I was appointed as executive director of the ACHA in May
    2023. Unfortunately, I was fired in September 2023 for exposing
    the deeply ingrained corruption within the ACH board and its
    vendors. I witnessed and spoke out against systemic corruption
    and financial misconduct by the board and its vendors. The
    leadership under chair, Stephanie Marshall, and treasurer,
    Geoffrey Dorsey, has cultivated an environment ripe with
    corruption that has directly contributed to the degradation of
    living conditions for the residents.
        I observed mismanagement involving approximately $7.4
    million allocated to no-bid contracts, which brought about very
    limited improvements. There were instances of invoices being
    paid for uncompleted work, purchase orders with no contracts or
    scope of work, contracts that were never bid out, and bids that
    were rigged, exemplifying a severe disregard for procedural
    norms regarding procurement. The procurement process at the
    ACHA violated their own written procurement policy. A simple-
    to-understand instance involved a $1,200 invoice for the labor
    to install three window air conditioning units under a no-bid
    contract, which I rejected. The manager who requested the work
    also refused to approve the invoice because they believed it
    was fraudulent. Despite this, the board overrode my decision
    and proceeded with the payment.
        This corruption has dire consequences for the residents,
    especially concerning their basic living needs. Over the last
    two winters, ACHA has failed to provide consistent heating and
    hot water, and we anticipate similar failures in the coming
    2024-2025 winter season. This neglect stems from a
    misallocation of funds diverted away from essential services to
    corrupt dealings by the Board. Procurement processes have been
    manipulated to benefit the Board members, removing all
    oversight from the executive director's office. This was
    structured through the appointment of an external contractor,
    Jerry Volpe, who was instructed by Board resolution to report
    directly to the Board, further enabling their unchecked control
    over financial transactions. Additionally, the Atlantic City
    Council, which is supposed to oversee the ACH Board, has shown
    a lack of will to act and hold hearings.
        I have spoken about the fraudulent activities at the ACHA
    with various law enforcement officials, including New Jersey
    State Police, HUD's Office of Inspector General, the FBI, and
    assistant U.S. attorneys. While I understand and appreciate the
    need for them to conduct a thorough and comprehensive
    investigation that supports charges leading to convictions,
    this process is inherently time consuming. Given the urgent
    needs of residents who are suffering under the current
    management, I strongly recommend that HUD immediately assume
    control of the Board and the management of the Authority.
    Congressman Van Drew has also spoken about this as well. The
    residents cannot afford to wait for the criminal justice system
    to take action against the Board members.
        In addition, I would propose a few simple recommendations
    for HUD that include, first, implement strict oversight
    mechanisms that empower HUD to audit and, if necessary, remove
    corrupt housing authority board members and ban vendors who
    commit fraud. Second, ensure that HUD and its Office of
    Inspector General have unrestricted access to all housing
    authority records and communications, such as emails, to
    facilitate transparency and prevent further abuses. The level
    of corruption at ACHA is not merely a breach of ethical
    standards, but a critical failure that inflicts real harm on
    the community. It is crucial that HUD takes immediate and
    forceful action to dismantle these corrupt practices and
    reinstate integrity and effective management at the Atlantic
    City Housing Authority.
        Thank you for your attention. I look forward to your
    questions and the opportunity to assist in any way possible in
    these reformative efforts.

        [Prepared statement of Mr. Doherty follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Davidson. Thank you, Mr. Doherty. Mr. Banna, you
    are now recognized for your opening statement.

    STATEMENT OF MR. GEORGI BANNA, GENERAL COUNSEL AND DIRECTOR OF
      STRATEGIC INITIATIVES, NATIONAL ASSOCIATION OF HOUSING AND
                    REDEVELOPMENT OFFICIALS (NAHRO)

        Mr. Banna. Chairman Davidson, Ranking Member Cleaver,
    Ranking Member Waters, and members of the committee, thank you
    for the opportunity to testify today about the performance of
    our Nation's public housing agencies. My name is Georgi Banna,
    and I serve as general counsel and director of Strategic
    Initiatives for the National Association of Housing and
    Redevelopment Officials, NAHRO. NAHRO has worked for over 90
    years to ensure that all families have access to safe, secure,
    affordable housing in strong, resilient communities. In my
    roles at NAHRO, I have had the pleasure of working with NAHRO's
    2,500-member housing agencies, and there are more than 26,000
    incredible housing and community development member officials
    nationally. NAHRO members administer more than 3 million homes
    for more than 8 million people.
        Public housing agencies--PHAs--overwhelmingly administer
    the public housing and Housing Choice Voucher Program
    successfully and are responsible stewards of Federal taxpayer
    dollars. The public housing assessment system provides a
    comprehensive evaluation of an agency by measuring their
    physical, financial management, and capital fund conditions.
    HUD's latest data shows that 73 percent of PHAs receive a high
    or standard performer designation. Only 5 percent were
    designated as troubled.
        PHAs are local governmental entities that represent the
    communities that they serve. More than 1.6 million people live
    in public housing, and more than 5 million people are housed
    through the Housing Choice Voucher Program. Public housing
    provides critical housing to families, seniors, and individuals
    with disabilities, including over half a million children. The
    vast majority, approximately 77 percent, of families receiving
    housing assistance earn less than 30 percent of the area median
    income. Only 4 percent of assisted families rely on welfare as
    a major source of income.
        PHAs effectively provide housing assistance to millions of
    Americans despite consistent underfunding of HUD programs. A
    significant amount of America's current public housing stock
    was built between the 1950s and the 1970s. In 2010, HUD
    conducted a national public housing capital needs assessment
    that determined that the total backlog of public housing
    capital funding was $26 billion. The report also determined
    that Congress would need to appropriate $3.4 billion per year
    to meet all public housing capital needs, but the backlog
    continued to grow. NAHRO now estimates that the Capital Fund
    backlog is over $90 billion, and although Capital Fund
    appropriations have increased in recent years with all-time
    highs in 2022, they have not once reached the annual capital
    need amount of $3.4 billion established 14 years ago. Providing
    adequate annual appropriations is critical to ensuring that
    aging public housing units remain decent and safe, leading to
    the long-term sustainability of this essential program.
        During the recent coronavirus disease 2019 (COVID-19)
    pandemic, PHA served as invaluable community hubs providing
    food, healthcare, and other necessities of daily life. PHAs
    embraced new technologies and modes of operation to ensure that
    residents were still well served. Many PHAs quickly and
    successfully implemented new waivers that provided broad
    flexibilities and created new processes to ensure the health
    and safety of their residents. For example, many PHAs did their
    first remote video inspections and virtual eligibility and
    annual income examinations that allowed them to safely monitor
    unit conditions and serve the residents. When provided the
    appropriate tools and flexibilities to respond through local
    community needs, PHAs quickly adapt to ensure their residents
    are provided critical services.
        As I conclude, I ask Congress to take the following steps
    to support the success of PHAs. One, increase investments in
    affordable housing programs. Congress should fully fund public
    housing, Housing Choice vouchers, project-based rental
    assistance contracts, and community development programs to
    guarantee that all families have access to safe and secure
    housing. Second, streamline Federal regulations. Although some
    guardrails are necessary to ensure statutory compliance, they
    must allow for efficient and cost-effective operation of
    housing programs so that agencies can better address the unique
    needs of their community. Finally, demonstrate congressional
    support for local flexibility. Congress must ensure that
    housing authorities have the necessary flexibilities to meet
    local needs effectively, acknowledging the importance of local
    expertise and community engagement in the affordable housing
    sector.
        Thank you again for this opportunity to testify, and I look
    forward to any questions that you may have.

        [Prepared statement of Mr. Banna follows:]
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Davidson. Thank you, Mr. Banna. Before we proceed
    to questions, I now recognize the ranking member, Ms. Waters,
    for 1 minute for an opening statement.

        STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
       FINANCIAL SERVICES COMMITTEE, A U.S. REPRESENTATIVE FROM
                               CALIFORNIA

        Ms. Waters. Thank you very much, Mr. Chairman. I am pleased
    that we are having this hearing today. I am one who has worked
    very hard to do everything that we can to improve public
    housing. As a matter of fact, I have legislation that first
    showed up in Build Back Better, and I have the Crisis Response
    Act that would provide $65 billion to address the backlog of
    public housing repairs that threaten residents' lives.
        We know that when poor people are piled on top of each
    other with not the proper resources and the deterioration that
    has taken place, there are going to be problems. If you would
    contact me, I will work with your representative to see what we
    can do about following up on the concerns, but I do not want to
    demonize all public housing. As you have said, I guess the
    larger percentage of them are operating successfully. It is
    only about 5 percent that we have these problems with. We
    should work on correcting them but not on demonizing them. I
    will yield back the balance of my time.
        Chairman Davidson. I thank the ranking member. I also ask
    unanimously consent to read into the record a statement from
    Representative Van Drew from New Jersey.
        Without objection, ``The Atlantic City Housing Authority
    has failed the people of Atlantic City. The Authority has
    squandered millions of taxpayers dollars through illicit no-bid
    contracts that failed to deliver any results. Mr. Doherty's
    testimony is a damning indictment of the illegal practices that
    left our most vulnerable residents in cold, infested, and moldy
    apartments. We must ensure that this never happens again. I
    concur with Mr. Doherty's recommendations for greater oversight
    and accountability, and that HUD assume control of ACHA. I
    thank the House Financial Services Committee for working with
    me to set up today's hearing and shine a light on this
    appalling crisis.''

        [The information referred to can be found in appendix.]

        Chairman Davidson. We will now turn to member questions, so
    I now recognize myself for questioning.
        First of all, I would like to thank again Mr. Slover and
    Mr. Doherty for coming before us today. It takes a lot of
    courage to face down, essentially, a system or a machine of
    local government and public housing agencies to get your
    stories told. We are interested in hearing from both of you in
    your own words exactly what happened and why, and, frankly,
    thanks for having the moral courage to risk your livelihoods to
    do the right thing.
        Mr. Doherty, when you first became aware of the
    mismanagement problems in the Atlantic City Public Housing
    Authority, what actions did the local governments take to
    address the problem and what was the result?
        Mr. Doherty. When I first became aware of it was really
    within the first couple of weeks of being there. I simply asked
    for a list of vendors, and there was no list. I was met one
    morning by two detectives from New Jersey State Police who
    asked how vendors were being selected. I said I had no idea, I
    just got there, but when I contacted the chair of the Board and
    let her know that there were two detectives from the State
    police, which is quite alarming when you show up to work, her
    and the treasurer, Geoffrey Dorsey, called me back, and Mr.
    Dorsey informed me that I do not talk to the police. That is
    when I knew that the Authority was heading in the wrong
    direction, telling----
        Chairman Davidson. When did things get bad enough that HUD
    became involved?
        Mr. Banna. HUD became involved when I started sending them
    purchase orders. I sent them one purchase order that had no
    contract, was never bid, for $200,000 that had no scope of
    work, and it was not done during any emergency period. I sent
    it to them, and it literally went into a black hole. I followed
    up and they said we would be asking for additional information,
    and nothing ever came of it.
        Chairman Davidson. Do you think they would have even done
    that if you had not pressed the matter?
        Mr. Doherty. No.
        Chairman Davidson. That is disappointing. Mr. Slover, as
    you were pointing out that the D.C. Public Housing Authority
    gets a passing grade and higher praise than that by HUD, it
    sort of reminds me of a school system where everyone gets an A
    or you can pass people on to the next grade because they are
    proficient in math or reading, and then when they graduate,
    they cannot read or do math. I think that is the concern with a
    lot of D.C. public housing authorities. I sent a letter in
    December to HUD Secretary Fudge on what I called the
    ``unacceptable and inhumane conditions of the D.C. Public
    Housing Authority.'' Public housing authorities do have this
    obligation under law to provide ``decent, safe, and sanitary
    housing,'' so it is not debatable. Why do you think public
    housing authorities and HUD are not upholding the law?
        Mr. Slover. That is a great question. It is hard to
    understand what the answer to that could be because we
    basically have 6,000-plus public housing units left in the
    District of Columbia. I think everybody wants to talk about how
    housing authorities are underfunded. I think that is the
    continued sort of comment--``underfunded, underfunded,
    underfunded.'' My point is when you are wasting millions and
    millions and millions of dollars, as an example, the capital
    budget for D.C. Housing Authority is $32 million. The amount of
    money that makes it to capital projects was $2 million in 1
    year because all the money gets scraped away. It gets used for
    pet projects, for the police force, for other things, and so it
    is gross mismanagement and failure to understand what the
    mission of the Agency is and being dragged by local
    jurisdictions who want a different outcome. They are not so
    interested in zero to 30 percent of area mean income. They are
    interested in supporting their own housing desires, but they do
    not have the resources to do it. So they use the local agency
    to do it, and what does not get served is the clients and
    residents of public housing. They become a secondary thought.
        Chairman Davidson. Yes. Thank you, and I think the number
    of unused, unoccupied units here in DC really sounds the alarm.
    I think the other thing we did not mention is the voucher
    system because the public housing system was not working as
    well, so we have areas that have used some of these very
    effectively, and even that system has failed. I just cannot
    stop thinking about 70 current former employees of NYCHA,
    single largest public housing authority in the Nation, arrested
    in a massive Federal sting operation. Charges involve more than
    $2 million in bribes taken over 10 years, nearly one-third of
    NYCHA's developments. The New York Times called it ``the
    largest number of Federal bribery charges the Department of
    Justice (DOJ) has ever handled in a single day.'' These arrests
    follow the conviction of 12 vendors who pled guilty in 2021 to
    paying bribes to NYCHA employees.
        If you look at the reporting on this; we need to give far
    more attention to it. I look forward to the future testimony of
    our inspectors general, and I now yield 5 minutes to the
    ranking member from Missouri, Mr. Cleaver, for 5 minutes.
        Mr. Cleaver. I want to make sure that I am clear in the
    ambiguity in what I say. If somebody is stealing money, they
    ought to go to jail. I do not care if it is public housing or
    public bathrooms, they go to jail. I am always, and I said to
    myself this morning in the shower I was not going to take
    anything on a personal level because I lived in public housing,
    and then I ran a public housing at least for 2 months before it
    went into receivership. I know how it runs and I know how it
    operates, and I do not think anybody that I know is going to
    say, ``Well, let us keep the corruption going in public
    housing.'' Nobody is going to say that but let me also be
    clear. Funding does matter, and for us to suggest that funding
    does not matter, it just does not compute because if housing is
    collapsing in and there are problems in public housing that
    cannot be fixed otherwise, those problems do exist.
        I mean, I do not think anybody living in public housing got
    equipment when they started knocking down walls and tearing up
    furnaces. Those things get old and they have to be replaced,
    and they often are not replaced because there is not enough
    money. I am not telling you what I heard. I am not telling what
    I read in a sociology book. I am telling you what I have seen
    and experienced. I lived in 405, Unit B, for 7 years, and the
    people who lived there wanted to live under the best
    circumstances they could because that is what we want to do in
    our country. Right now, Mr. Banna, what tools do we have in HUD
    that you are aware to deal with these issues?
        Mr. Banna. Thank you for the question, Ranking Member.
    There are mechanisms in place for oversight of housing
    authorities. There is the Public Housing Assessment System,
    which does evaluate housing authorities at various levels and
    provides a score. It does not look at the condition of the
    properties. It looks at their financial condition, their
    management condition, and their capital fund conditions. Those
    mechanisms are in place, and agencies receive scores on,
    generally, an annual basis, and based on those scores,
    continued and additional oversight, if necessary, is provided
    by HUD. There are mechanisms in place that currently do provide
    that oversight from the HUD level to the local housing
    authority.
        Mr. Cleaver. Mr. Doherty, so I am assuming that the
    problems you noticed or that there were in your community with
    public housing, once it was brought to the attention of
    officials, that the proper law enforcement agencies were
    brought in and that any other problems existing in public
    housing in terms of how people lived, that was also addressed.
        Mr. Doherty. Thank you for the question. Law enforcement
    was brought in, but what unfortunately happened is while law
    enforcement is actively seeking evidence to prosecute, at the
    same time, people are suffering. If HUD Office of Inspector
    General (OIG) could communicate with HUD and say, look, we have
    an active investigation and we think this is going somewhere,
    that should trigger something in HUD to say, all right, let us
    take a look at this authority and take it over so that people
    no longer have to suffer through terrible living conditions.
        I will give you one example. Last year, because the
    procurement process was so terrible, there was no extermination
    for roaches and mice for about 7 weeks during the summer. Now,
    if you have lived in public housing and you do not exterminate
    for that long, particularly in the summer months, you know that
    you are going to get a terrible infestation. There were people
    living in those conditions, young families, seniors, children
    living in deplorable conditions because the procurement was so
    inadequate and was done improperly. Again, law enforcement is
    involved, and they should be involved, but I think it is time
    that HUD takes it over and improves the conditions of the----
        Mr. Cleaver. With what money?
        Mr. Doherty. Pardon me?
        Mr. Cleaver. You said it would be time for HUD to take it
    over. With what money?
        Mr. Doherty. I would say HUD should take over the
    governance of the Board----
        Mr. Cleaver. I know. Okay. With what money?
        Mr. Doherty. Sir, the Board is----
        Mr. Cleaver. I appointed a board. I know how it is. I want
    to know what money is going to be used to make the improvements
    necessary.
        Mr. Doherty. I do not have an answer to that question, sir.
        Mr. Cleaver. Thank you, Mr. Chairman.
        Chairman Davidson. The gentleman from Wisconsin, Mr.
    Fitzgerald, is now recognized for 5 minutes.
        Mr. Fitzgerald. Thank you, Chair. I want to talk about the
    city of Milwaukee. HUD reports in December 2022 and April 2023
    showed the Housing Authority of the city of Milwaukee was at
    risk for fraud and abuse and allegedly mismanaged millions of
    dollars. In May 2023--that may be some of the dollars we were
    just talking about--HUD deemed some of the Housing Authority's
    programs, including the Section 8 Program, ``troubled.'' In
    recent years, residents have come forward and expressed
    complaints about bedbugs, rat infestations, apartment break-
    ins, and mold. For its financial conditions, the Housing
    Authority scored zero of 25 points. The physical conditions of
    its properties, too, received a poor grade, scoring just 26 of
    40 points.
        HUD recently ordered the Housing Authority to hire an
    outside agency, the Department of Neighborhood Services, to run
    inspections of the Housing Authority's more than 4,000 units.
    HUD also ordered the Housing Authority to bring in an outside
    vendor to help the Section 8 office go through every single
    participant in the Housing Choice Voucher Program and make
    corrections if needed. While leaving the Housing Authority as
    the administrator, which is key in this discussion, I think,
    after that, Department of Neighborhood Services (DNS) had the
    ability to fine and hold the Housing Authority of the city of
    Milwaukee accountable.
        Mr. Slover, Mr. Doherty, you have both mentioned so far
    today kind of a need for more direct accountability to HUD. Let
    me ask you first, Mr. Slover, is this a situation where HUD
    should have stepped into the Milwaukee situation sooner, and is
    this typically what you see in other larger metropolitan areas?
        Mr. Slover. No, absolutely, HUD needs a quicker trigger.
    They wait way, way, way too long, and by the time they get
    there, the damage is so bad that it is really hard to unwind,
    and then they do not even do it then.
        Mr. Fitzgerald. Very good. Mr. Doherty, would conditions
    that I just described in Milwaukee be more likely to be
    improved if the Authority or its vendor were held accountable
    directly to HUD?
        Mr. Doherty. No. If there were more accountability and more
    enforcement, I think you would see improved living conditions
    for the residents in public housing.
        Mr. Fitzgerald. Then, the question to both of you, how can
    Congress, how can those of us sitting in this room right now
    kind of refocus the accountability of public housing agencies
    to HUD for greater accountability for tracking and the
    reporting and the achieving results because what I think many
    Members of Congress find frustrating is this problem is so
    massive across the country right now. It is hard to figure out
    what can we do to specifically target something.
        Mr. Slover. I will take a shot at that. There are 3,000
    public housing agencies in the country. Again, it is the
    largest real estate operating business in the country. The
    largest private landlord is you. You are right there, but you
    do not run it that way. You run it as if you are sending money
    and do not really care what happens. I do not want to say
    ``care,'' but there is no demand for a return on the
    investment. There are plenty of models out there. There are
    franchise models, there are business models, there are many
    models of accountability. When someone checks into the Days Inn
    in Austin, Texas, they know how much that room rate was, and
    they know what their profit was. The technology exists.
        This government and this Agency, HUD, does not want to know
    that level of information because then we have to really
    start--Accountability is a really difficult thing, and it is
    going to be a very difficult road, but we have to start because
    the results are just ineffective. Again, it is not a money
    problem. It is an execution problem. There is a saying out
    there, 20 percent idea, 80 percent execution. We do not have
    any execution capacity within this vast enterprise.
        Mr. Fitzgerald. Very good. Mr. Doherty, do you have a
    comment on that front?
        Mr. Doherty. I think Bill handled that really well, so I do
    not want to answer.
        Mr. Fitzgerald. Very good. Thank you. I yield back.
        Chairman Davidson. I thank the gentleman. The chair now
    recognizes the ranking member from California, Ms. Waters, for
    5 minutes.
        Ms. Waters. Thank you very much. I would like to direct
    this question to Mr. Doherty. You were the mayor. Did you have
    an appointment to the Board when you were mayor?
        Mr. Doherty. Yes, ma'am.
        Ms. Waters. How many appointments did you have?
        Mr. Doherty. Just to be clear, I was mayor of my town in
    Belmar, but I served as the executive director for the Atlantic
    City Housing Authority. When I was mayor in Belmar, I had one
    appointment to the Board.
        Ms. Waters. You had how many appointments?
        Mr. Doherty. One appointment as the mayor.
        Ms. Waters. One appointment, and so who selects the head of
    the Housing Authority? What is your understanding of how one
    gets to be the director, the head of a housing authority?
        Mr. Doherty. Yes, ma'am. In New Jersey, under State
    statute, every housing authority has 7 members. Five are chosen
    from the Council, one from the mayor, and one from the
    Department of Community Affairs, which, ultimately, is the
    Governor. Those--
        Ms. Waters. How is the executive director?
        Mr. Doherty [continuing]. Those 7 do a search for an
    executive director, and the Board appoints an executive
    director by resolution.
        Ms. Waters. Does the mayor have any responsibility in that
    appointment at all? Is the City Council involved with that
    appointment, or is it simply done by the Board of the Housing
    Authority?
        Mr. Doherty. By the Board of the Housing Authority.
        Ms. Waters. So, knowing what you know, would you propose to
    change the way the makeup of the Board takes place and involves
    the City Council and the mayors more?
        Mr. Doherty. No. The mayor and council only appoint the
    Board, and they have oversight over the Board as well.
        Ms. Waters. I beg your pardon?
        Mr. Doherty. The Council appoints 5 members of the Board,
    and they have oversight for the Board, so it is a whole----
        Ms. Waters. Okay; so, that is the City Council?
        Mr. Doherty. Yes ma'am.
        Ms. Waters. Okay, tell me, when you were mayor, what you
    did working with the City Council to deal with the issues that
    you are bringing here today.
        Mr. Doherty. Again, ma'am, when I was mayor in Belmar, we
    had a very small housing authority, only 46 units, all seniors.
    I was the executive director at the Atlantic City Housing
    Authority, two completely different towns.
        Ms. Waters. Okay. That is different, but even when you were
    mayor, what did you do in this small town working with the City
    Council and the mayor about the oversight of public housing?
        Mr. Doherty. Fortunately, in Belmar, we had a very well-
    run, public housing authority. There was minimal oversight. We
    worked together. They were not in a troubled status. They
    performed well.
        Ms. Waters. So, because that was well run and having been
    the executive director of another, you saw the difference?
        Mr. Doherty. Yes, ma'am.
        Ms. Waters. The difference that you saw has been discussed
    with, worked with the mayor and the City Council?
        Mr. Doherty. Everything has been brought up to the mayor
    and City Council, yes, ma'am.
        Ms. Waters. Not just brought up, but the City Council as a
    vote, and they have some authority, and they have some
    responsibility. What did you do, working with the City Council,
    the elected officials, about the problems of the housing
    authority that you were executive director of?
        Mr. Doherty. I both spoke privately and publicly at an
    Atlantic City Council meeting and asked them to hold hearings,
    and they had refused.
        Ms. Waters. Did they hold the hearings?
        Mr. Doherty. No, ma'am.
        Ms. Waters. When they did not hold the hearings, what did
    you do?
        Mr. Doherty. I kept pushing as much as I could. I talked
    with the Congressman who represents Atlantic City, Jeff Van
    Drew. I reached out to our United States senators, including
    Bob Menendez, who himself has also called for HUD to take over
    the Atlantic City Housing Authority, and now I am here in front
    of you today, ma'am.
        Ms. Waters. Given the knowledge, both from a mayor's
    standpoint and from executive director's standpoint, what do
    you advocate in terms of helping to get better oversight and
    supervision? What is your advice?
        Mr. Doherty. On a micro scale, when it comes to the
    Atlantic City Housing Authority, I advocate for HUD to take
    over the Board and management of the Authority immediately, and
    on a grander scale, for HUD to have more oversight and also to
    have more authority into housing authorities. One of the things
    I have learned through this process, which was quite eye
    opening and makes no sense to me, is that HUD, including HUD
    Office of Inspector General, have no authority to look at
    emails on housing authority servers. These housing authority
    servers are paid for by HUD with Federal dollars, and they are
    not granted access to those email servers.
        Ms. Waters. Thank you. I yield back.
        Chairman Davidson. I thank the gentlewoman. The gentleman
    from New York, Mr. Lawler, is now recognized for 5 minutes.
        Mr. Lawler. Thank you, Mr. Chairman. Housing affordability
    is a serious crisis in our Nation right now. We are well over
    6.5 million units underbuilt at the moment with mortgage rates
    at multidecade highs, limited supply, and continued supply
    chain and construction issues. For many, it is the most
    difficult time to purchase a home in a generation. These, among
    other factors, have forced many potential home buyers into the
    rental market, driving up rental demand and prices with it.
    This topic is critical, which is why we need to be working
    together as elected officials, government agencies, nonprofit
    organizations, local stakeholders, and key figures from
    industries like real estate development and construction and
    insurance. At such a crucial time with so many families
    struggling to get by, so many vulnerable and low-income
    Americans are relying on access to decent, safe, and sanitary
    housing from public housing authorities.
        The New York City Housing Authority, NYCHA, is by far the
    largest public housing authority in the Nation, consisting of
    almost 180,000 apartments. As such, it received over $2.8
    billion of Federal funding in 2023 through a range of different
    Federal programs. Yet despite the funding and all the money
    poured in from the State and local sources, NYCHA has exhibited
    a complete and total failure to adequately house New Yorkers.
    Go to many of these locations or read the reports from
    advocates about the horrific conditions of many of the
    Authority's units: reports about mold, apartments freezing cold
    during winter and scorching hot during summer, infestations of
    pests and rodents, and a host of life-threatening safety
    violations. Meanwhile, as the chairman alluded to, NYCHA just
    saw the largest number of Federal bribery charges the DOJ had
    ever handed out in a single day resulting from millions in
    bribes. This is from a Housing Authority that already has a
    Federal monitor resulting from their failure to adequately do
    their job, and while NYCHA may be arguably the biggest and
    baddest offender, these issues are reflected nationally in
    public housing authorities.
        Mr. Slover, HUD is the Federal Agency tasked by statute
    with funding and overseeing public housing agencies and has
    many tools to conduct supervisory and enforcement actions. Do
    you believe HUD was properly overseeing DCHA or responsive to
    issues that have been known and reported on for many years or
    even prior to the audit report?
        Mr. Slover. Actually, I am the one who had to call HUD
    because I spent over 3 or 4 years elevating issues, getting the
    Board to discuss them, getting articles written in the
    Washington Post and every other newspaper in the city. I
    finally reached out to HUD and basically begged them to come
    in. They came in 9 months to issue their report, and, again, a
    year and a half later, there is no meaningful reform at the
    Agency, and again, it is still considered a high-performing
    agency. Absolutely, funding it makes zero sense that an agency
    that has a 25 percent vacancy rate, 25 percent collection rate,
    they have a vacancy of 25 percent.
        Mr. Lawler. In your opinion, are there additional
    authorities or tools that Congress should consider in order to
    compel HUD to act sooner and more effectively with respect to
    troubled PHAs?
        Mr. Slover. I think the problem is, as I articulated in my
    testimony, that HUD does not consider themselves a fiduciary.
    We keep talking about oversight, oversight. This is not an
    oversight matter. This is management. Oversight would lead you
    to believe that they are just there to make sure everything is
    okay. This is an operating business. I do not think the
    government runs any other operating businesses. Maybe the U.S.
    Mint. They make money. They sell it, right? This is an
    operating business. That is the thing that I do not think is
    resonating here.
        It is almost like you have to, I hate to use the word
    ``authority,'' to manage an authority problem, but it is almost
    like you have to take these public housing agencies out of HUD,
    spin them out into something that has accountability. It is its
    own Profit and Loss (P&L). If I am going to give you X billion
    dollars, I want to see what the result is.
        We do not have that today. We have the technology, we have
    the ability, but there is nobody who wants that information
    apparently. Everybody wants to talk about housing
    affordability. We are not even talking about affordable housing
    here. We are talking about subsidized housing. They are very
    different things. We cannot even get our subsidized housing
    correct. Imagine what affordable housing problems we have and
    do subsidize.
        Mr. Lawler. To that end, can you just briefly in the time I
    have left share some examples of how families living and
    housing provided by DCHA have been impacted from a health and
    safety perspective?
        Mr. Slover. I am currently a receiver for the D.C. Superior
    Court. I have a thousand units in Washington D.C. I run through
    receivership. The D.C. Housing Authority properties are all,
    without question, in worse condition. The business is not run
    well. The capital budgets are not spent well. We overspend on
    the Voucher Program. We do everything possible to----
        Chairman Davidson. The time of the gentleman has expired.
        Mr. Slover [continuing]. and not manage this process.
        Chairman Davidson. The gentleman's time has expired. The
    gentleman from Nevada, Mr. Horsford, is now recognized for 5
    minutes.
        Mr. Horsford. Thank you, Chairman and Ranking Member. As a
    country, the National Multifamily Housing Council estimates
    that we need to build an astounding 4.3 million new apartment
    units in the next 10 years to keep up with demand. That is only
    to keep up. Even at that pace, we would not even begin to deal
    with the shortfall that renters face today. Yet in the face of
    this daunting challenge, our public housing authorities remain
    dedicated to expanding affordable housing resources to all who
    need it. Now, I understand that the other side might want to
    focus on what does not work, but I would like to focus on what
    does and use it as a model for replication.
        The Nevada Rural Housing Authority has been using unique
    public-private partnerships to bring safe, clean, and
    affordable apartments to portions of the State in rural Nevada
    that have faced decades of neglect.
        I ask unanimous consent to enter into the record of MOAPA
    Valley Progress article from April 30 titled, ``Grand Opening
    of Hafen Village.''
        Chairman Davidson. Without objection.

        [The information referred to can be found in the appendix.]

        Mr. Horsford. Also, I would like to share one of the
    resident's experience, June Jones, who moved into a 1-bedroom
    apartment at Hafen Village. She said, ``It is so peaceful here
    and quiet. I do not have to worry about traffic or crime or
    overcrowding. I am just so glad to be here.'' This is part of a
    96-unit project, the largest to date to be built by the Nevada
    Rural Housing Authority. It offers 1-, 2-, and 3-bedroom units
    ranging from 680 square feet to over 1,100 square feet. The
    units feature patios and balconies, attractive kitchens and
    baths, beautiful flooring, extra storage space, and air
    conditioning. The common spaces offer picnic areas, a dog park,
    a community garden, children's playground, computer lab,
    library, laundry room, fitness facility, and an entertainment
    space with kitchen.
        It is not just an apartment, it is a home. It is a home
    with dignity, and they have done it the right way. It was only
    made possible, though, through years of work by our State's
    housing authority, community banks, developers, various
    nonprofits, and essential funding from the Federal Home Loan
    Bank of San Francisco. It was their shared commitment to
    providing rural Nevadans an affordable and safe place to call
    home that made this partnership work. This is who we should
    have testifying today.
        Mr. Banna, as we have had consistently and adequate funding
    at the Federal level to increase the construction of affordable
    housing, we have seen an increase in PHAs that are turning to
    innovative and new partnerships to serve their residents. In
    your experience, how can effective partnerships, both with
    private developers and local municipalities, maximize a public
    housing authority's ability to deliver new, affordable units in
    the face of continued funding cuts?
        Mr. Banna. Thank you, Representative Horsford. Excellent
    question. I think housing authorities, these are a key partner
    in many housing developments to again, tackle that lack of
    housing supply that we have now. We need all hands on deck,
    more partners, more cooperation. Also, by housing authorities
    being part of that partnership and local communities, private
    industry, additional resources do come to the table through
    those partnerships and then working with the public side of the
    partnership as well. There are other advantages at the local
    level as well.
        Mr. Horsford. Thank you.
        Mr. Banna. This is a time for all to be at the table so
    that we can tackle the lack of housing supply----
        Mr. Horsford. Thank you very much. It is great to know that
    our public housing authorities are able to do what is necessary
    to carry out their vital mission. However, public-private
    partnerships do come with their own challenges, namely an
    inherent lack of transparency and accessibility surrounding
    data collection. Tenants searching for affordability periods of
    specific buildings within the Low-Income Housing Tax Credit
    Program have nowhere to look as no centralized public database
    exists presently. This means that tenants could be unaware of
    impending rent increases until they are notified by their
    management. That is why today, I am introducing along with the
    ranking member, Mr. Cleaver, the Housing Market Transparency
    Act to allow the collection and consolidation of critical data,
    such as habitability standards, recent inspection information,
    ownership status, development costs, and more.
        We all know we have an affordability housing crisis in this
    country, but the only way to understand the magnitude of the
    crisis is to get a holistic view of our current affordable
    housing stock. By centralizing this information at HUD,
    researchers, regulators, advocates, and administrators will be
    able to make affordable housing development programs more
    efficient and keep tenants well-informed. That should be at the
    center of our housing policy. I yield back.
        Chairman Davidson. I thank the gentlemen. The gentleman
    from New York, Mr. Garbarino, is now recognized for 5 minutes.
        Mr. Garbarino. Thank you, Chairman, thanks to the ranking
    member for having this hearing, and thank you to all the
    witnesses for being here. I will say, housing authorities, some
    of them are very, very well run. We have a couple on Long
    Island where I am from, a couple in my district that have done
    a great job, but we also have some that have issues.
        Specifically, I want to talk about the latest scandal that
    hit New York City's Housing Authority, NYCHA, which led to 70
    current and former NYCHA superintendents and staff being
    arrested for allegedly pocketing bribes in exchange for
    granting no-bid or micro-contract repair work. This 10-year, $2
    million classic pay-for-play corruption scheme was the largest
    number of Federal bribery arrests brought in a single day in
    DOJ history and included public housing employees at
    developments in every borough. Unfortunately, we have seen
    consistent examples of waste, fraud, and abuse at many other
    housing authorities across the country, ranging from multiple
    NYCHA examples to the FBI's years-long investigation of missing
    and unallocated funds of the Little Rock Public Housing
    Authority.
        Mr. Doherty, to speak more generally, why do these types of
    problems appear to be so widespread and persistent for so long?
        Mr. Doherty. Thank you for the question. I could tell you
    that well-run housing authorities far outnumber poorly run
    housing authorities, but housing authorities should be well
    run. It is serving the most vulnerable population in this
    country, and it is such a basic need to have decent, clean,
    healthy housing. What I am really here to highlight is the
    Atlantic City Housing Authority. Next door to us is the
    Pleasantville Housing Authority. It runs great. There is no
    reason why a housing authority should not run well, no matter
    what the scale, whether it is the smallest one or the largest
    one. They all should be running well, and if they are not, that
    is when HUD should either exercise its ability to take it over
    while law enforcement is researching and prosecuting corrupt
    practices, but the focus really needs to stay on the residents
    that are supposed to be served by the housing authorities.
        Again, I would just reiterate, housing authorities should
    be running well. Most of them are. The real focus needs to be
    on the ones that are not because it is residents that are
    suffering because of it.
        Mr. Garbarino. Yes, and I agree with you. A lot of them do
    run well. In my previous life as an attorney, my firm
    represented a housing authority, and the smaller ones seem to
    run great, but we have had the New York City Housing Authority
    with thousands and thousands and thousands of people.
    Unfortunately, it is usually the residents that are being hurt
    by all the corruption that happens there.
        Following the NYCHA incident, Department investigations
    released more than a dozen recommendations for the Housing
    Authority to implement. Of those recommendations, three were
    repeat recommendations from a 2021 incident, in which 9
    contractors were charged with bribery, following another scheme
    that took advantage of the micro-contract process. The
    recommendations include shifting responsibility for approving
    micro-contracts to NYCHA centralized staff instead of building
    superintendents, as well as identifying cost estimates for
    common, repeat no-bid repair jobs, making it easier to spot
    pricing anomalies. However, NYCHA ultimately rejected these
    recommendations and appeared to continue with its ways.
        Mr. Slover and Doherty, in your opinion, what can be done,
    and you touched a little bit, Mr. Doherty, in your last
    comments, what can be done to hold public housing authorities,
    especially repeat offenders, more accountable for failures to
    make meaningful reforms? I know, Mr. Doherty, you just said HUD
    could take over for a little bit, but what other ideas are
    there?
        Mr. Doherty. I just think it is a repeat theme, which is
    there has to be some sort of expectation and accountability to
    the money from the beginning. In other words, HUD should not be
    coming in and going, oh my god, something happened here. They
    should know on a day-to-day basis what their money is being
    used for and whether that is being successful so you can course
    correct midstream versus 2 or 3 years after the fact. If HUD is
    still making recommendations to NYCHA, after all we have read
    about NYCHA for the last 3 years, do you not think that is a
    little bit odd? They should not be making recommendations
    anymore because, clearly, they are not listening and, so----
        Mr. Garbarino. Here is the question. I mean, the governance
    structure, how do we change it? How do you change the
    governance structure?
        Mr. Doherty. You change the governance structure by saying
    you do not report to the mayor, to the Council, to whomever. It
    is not their money. It is HUD's money. HUD is doing zero to 30
    percent of area mean income. Local jurisdictions typically do
    not do that work. That zero to 30 percent is what the Federal
    dollars are for, so they should be focusing 100 percent of
    their attention on that, and so, again, it needs to be an
    operating business that reports to HUD, not to a local board.
        Mr. Garbarino. I yield back. Thank you.
        Chairman Davidson. I thank the gentlemen. The gentlewoman
    from Massachusetts, Ms. Pressley, is now recognized for 5
    minutes.
        Ms. Pressley. Thank you to our witnesses for joining us
    today. I want the record to reflect that under this Republican
    majority in the 118th Congress, colleagues across the aisle
    have been trying to defund climate investments, diversity,
    equity, and inclusion initiatives, the Consumer Financial
    Protection Bureau, and now public housing. I am not sure what
    they actually want to fund.
        Public housing is a lifeline for millions of families,
    especially our elders, people with living with disabilities,
    working families with children, and in many communities, there
    is no other source of housing more affordable or readily
    available to low-income households than public housing, and
    that is important to recognize. Being low income, being poor is
    certainly not a character flaw. Being poor is the hardest job
    you will ever have. It has nothing to do with work ethic or
    character. It is usually because of broken systems and
    shortsighted or failed policies. Everyone is deserving of more
    than just shelter or housing. They are deserving of a home, a
    place where when you open the door, you feel a sense of
    belonging and refuge and safety away from the pressures of the
    world.
        The chronic underfunding of public housing is a disgrace to
    our values, and it has real consequences. I have constituents
    in my district, the Massachusetts 7th, living in households
    with backed-up raw sewage, rat infestations, dark hallways with
    broken lights. A father recently explained to me how black mold
    in his apartment endangered and actually resulted in his child
    having severe asthma, so much so that they would rather sleep
    in their car instead of in their apartment. This is shameful,
    and it is preventable. This committee can and should and must
    take decisive action on improving the quantity and quality of
    public housing.
        Mr. Banna, from your perspective, why have we not seen the
    investments that we need to address the housing crisis?
        Mr. Banna. Investment is needed. It is critical for both
    the preservation and for the development of new units. I think
    a choice has been made and decisions made to, again, with
    limited resources fund where those funds will go. I think the
    housing crisis that we have, the lack of affordable units that
    are currently in the system, there is a need to focus on
    affordable housing and reinvest into affordable housing; so
    again, that all Americans may have that home that you
    mentioned.
        I think it is critical that we focus and, one, to preserve
    the hard units, the locally owned units----
        Ms. Pressley. Thank you.
        Mr. Banna [continuing]. and to develop new units.
        Ms. Pressley. Thank you. Massachusetts, the third most
    expensive State to live in across the United States, we have
    over 180,000 people on a wait list for subsidized apartments,
    and yet thousands of units remain empty. The primary reason for
    this is chronic underfunding, which has delayed repair,
    renovation, and the hiring of necessary staff. Mr. Banna, given
    the many problems with public housing and the thousands-long
    wait list, can you outline how families are impacted when both
    HUD and public housing authorities are chronically underfunded?
        Mr. Banna. An example in the Housing Choice Voucher
    Program, approximately only 1 in 4 eligible families receive a
    housing voucher to be used in the private market. The limited
    resources lead to longer waiting lists both in the public
    housing and the Housing Choice Voucher Program, and, again,
    without the resources to provide and develop new units, the
    waiting lists only grow longer that directly affects our
    residents and families.
        Ms. Pressley. I want to just also say since housing is not
    only about health outcomes and economic and social mobility,
    but it is also about dignity. When you walk into a space that
    is eroding in real time around you, it takes a toll on your
    psychological well-being. You feel invisible and that your
    government does not think you are worth investing in, so this
    is also about dignity. Many public housing authorities have
    turned to the Rental Assistance Demonstration Program in the
    face of congressional inaction. This program converts public
    housing units into privately managed Section 8 housing. Roughly
    10 percent of our public housing stock nationwide has been
    converted through Rental Assistance Demonstration (RAD), often
    taking place with little government oversight. Instead of
    compromise programs like RAD, we have to ensure that HUD and
    public housing authorities have the funding and the staffing
    they need to repair and renovate public housing while ensuring
    the health and safety of public housing residents. Thank you,
    and I yield.
        Chairman Davidson. I thank the gentlewoman. The gentleman
    from Nebraska, Mr. Flood, is now recognized for 5 minutes.
        Mr. Flood. Thank you, Mr. Chairman. I would like to start
    by thanking our witnesses for your testimony today. The cases
    of the D.C. and the Atlantic City Housing Authorities are
    deeply disturbing, and I have a number of questions on how
    Congress can best prevent cases like this from happening again.
    Mr. Slover and Mr. Doherty, please help me clarify what
    authority does HUD has to intervene and address malpractice and
    fraud at public housing authorities, and, specifically, what
    tools do they have at their disposal to make changes at
    individual PHAs?
        Mr. Doherty. HUD does have the ability to take over a
    housing authority. It did it recently in Irvington, New Jersey
    where they disbanded the Board, took over complete management,
    terminated the executive director, and put it into receivership
    to turn that Housing Authority around; so, it does have the
    ability to do it. It just seems as though the process to get
    there seems longer than it should be, and until they get to
    that point of taking over and putting in receivership, the
    residents continue to suffer on a regular basis. There is a
    mechanism there. It is, as Bill mentioned before, pulling the
    trigger sooner to take over the housing authority.
        Mr. Flood. Mr. Slover?
        Mr. Slover. Yes, I would agree with that. The D.C. Housing
    Authority was taken into receivership about 20, 25 years ago
    through D.C. Superior Court. It came out of receivership and
    was basically put back on the same trajectory. It began because
    the Board that is now running the agency is majority controlled
    by the mayor. Again, I keep elevating it back to the same
    place, which is that without lines of accountability, without
    an understanding that PHAs are a subsidiary of HUD, not an
    adjunct development company for a city. In other words, the
    cities who take advantage of it use it for their disposal
    versus what HUD's mandate is. They are getting away from the
    zero to 30 percent of area mean income.
        HUD needs to run PHAs as if they are the owner and operator
    of those businesses. That is not what they do today, and the
    results are what you get. That is why I am talking about,
    funding, we do not know if funding is the problem because just
    at the D.C. Housing Authority, I watched millions and millions
    and millions of dollars wasted on contracts, consulting fees,
    this, that, and the other thing. We have no idea what it costs
    to run that business.
        Mr. Flood. If you could go back and waive a wand at the
    D.C. Housing Authority, what should have HUD done, when and how
    and how fast and how extreme?
        Mr. Slover. There are basic metrics, basic metrics of
    occupancy and rent collection. Those are the two easiest things
    to monitor. As soon as they went below 90 percent, they should
    have come in. We went down to 70 percent, and they still have
    not come in.
        Mr. Flood. Come in and do what?
        Mr. Slover. They got to come in and say why is the
    occupancy low. Why are you doing this? Why are you doing this?
    Put them on a PIP, a performance improvement plan.
        Mr. Flood. Do those work?
        Mr. Slover. In the private sector, they do. The private
    sector comes in, and they do not tolerate mismanagement because
    the money walks. The problem with this business is it is the
    biggest subscription business in the world. The money just
    keeps coming in, and the results do not happen and the money
    keeps coming and so, what is the compelling reason to improve?
        Mr. Flood. Can HUD come in and fire people and assume
    control?
        Mr. Slover. That is the thing. HUD owns this business,
    again, getting back to my testimony, which is to say it needs a
    complete reorganization. Right now, it is a local jurisdiction
    issue: the local board this, the independent that. It is not
    working. On enough places, it is impacting.
        Mr. Flood. I appreciate that. There is one more question I
    want both of you to answer, and that is, you were both fired
    from your positions after reporting examples of mismanagement,
    fraud, and corruption. Are there any relevant whistleblower
    protections for people working in PHAs? Is that something
    Congress should consider, Mr. Doherty?
        Mr. Doherty. There are no protections that I know of, but I
    would imagine, yes, that is something that Congress certainly
    should consider.
        Mr. Flood. Mr. Slover?
        Mr. Slover. Absolutely. The mayor, through emergency
    legislation, reconstituted the Board and removed my independent
    seat. This is an independent agency that she is not supposed to
    have control of, and yet they were able, within 2 weeks, to
    remove my seat, so that is not an independent board.
        Mr. Flood. Thank you both for your testimony, and I yield
    back.
        Chairman Davidson. I thank the gentleman. The gentlewoman
    from Michigan, Ms. Tlaib, is now recognized for 5 minutes.
        Ms. Tlaib. Thank you all three of you for being here, and
    thank you, Chair, for this important hearing. I want to start
    off, and I know some maybe have brought this up, but the PHAs,
    it is understatement, are facing decades of underinvestment. Do
    you have any idea how much underinvestment we are talking
    about, Mr. Banna?
        Mr. Banna. Thank you for the question. NAHRO does estimate
    that the current capital fund backlog is over $90 billion.
        Ms. Tlaib. Yes, $60 to 90 billion. Those are the amounts.
    Did you know that Mr. Doherty?
        Mr. Doherty. Yes. I would imagine that it is severely
    underfunded, which was also what made it more frustrating for
    me----
        Ms. Tlaib. Yes.
        Mr. Doherty [continuing]. because we had limited resources.
        Ms. Tlaib. Sure.
        Mr. Doherty. To see those resources not going to benefit
    the residents made it even that more challenging.
        Ms. Tlaib. In terms of oversight and accountability, while
    our witness' testimony discuss an important role of HUD, HUD's
    OIG, PHA board's role in oversight, there is one group that has
    not received as much attention, and those are the PHA residents
    and voucher holders themselves. Today the Public Housing
    Assessment Scoring System is based on four categories: physical
    conditions, financial conditions, management operations, and
    capital fund usage. Until 2011, the Public Housing Assessment
    System also included an additional category, which was the
    resident assessment subsystem, or what they call, I think, RAS?
    Is that correct? All three of you, are you familiar? Just nod.
    That is fine.
        [Witnesses respond by nodding.]
        Ms. Tlaib. Okay. You are not familiar with it, Mr. Doherty?
        Mr. Doherty. No.
        Ms. Tlaib. Okay. This category assessed residents, whether
    or not they were satisfied in a number of areas, including
    maintenance and repairs, communication, safety, services, and
    housing property appearance. Should HUD bring back a resident
    assessment category, and, if so, are there any changes--and,
    Mr. Banna, we will start with you--would make it or it is
    weighting overall PHA scores?
        Mr. Banna. There currently is a resident component to,
    generally, board membership. There is usually a resident
    commissioner at the agency as well.
        Ms. Tlaib. So, they have no input, the residents.
        Mr. Banna. On the Public Housing Assessment System (PHAS)
    system, the RAS, the resident subsystem, currently is not part
    of that. The management and through occupancy is one way that
    the residents can speak. Again, if the units are not occupied
    is one way of having the resident input but housing authorities
    regularly hold their public meetings a lot of times----
        Ms. Tlaib. Yes. No, no, but do they get any input in
    scoring? Do they----
        Mr. Banna. Not at this time
        Ms. Tlaib. No.
        Mr. Banna. Not directly.
        Ms. Tlaib. Last year, HUD updated its physical inspection
    process with the New National Standards for Physical Inspection
    of Real Estate System as part of the so-called, what is it,
    NSPIRE--there are many acronyms--process.
        Residents can add up to five units to the inspection list.
    The process also includes a very brief survey, right? However,
    the resident-selected units are not necessarily included in the
    inspection score, and the resident survey is not factored into
    the score at all. I think this is a really big, missed
    opportunity here. To all the witnesses, should the current
    NSPIRE process factor resident assessments into the physical
    inspection score? Bill?
        Mr. Slover. I agree a hundred percent that tenant feedback,
    client feedback is one of the most critical elements. I mean, I
    was the advocate----
        Ms. Tlaib. That is who we are serving, right?
        Mr. Slover. I was the advocate representative on the Board
    for 7 years. I represented the tenants. That was my job.
        Ms. Tlaib. It is helpful. How about you, Matt?
        Mr. Doherty. You are a hundred percent right, and I would
    tell you; I think the residents in Atlantic City Housing
    Authority would tell you that they do not voice their opinion
    anymore because no one cares.
        Mr. Banna. Yes, that is right.
        Ms. Tlaib. Yes. How about you, because this quasi-
    governmental authority thing, we do it with water now. We do it
    with housing. We have been doing it for the housing, and I am
    being honest. It is like a step removed from the actual
    residents being able to have any real say about their quality
    of life and their housing.
        Mr. Banna. The resident units are in addition to the NSPIRE
    system. They were not in the former system, so that is an
    improvement to have additional input from the residents so the
    residents can actually be part of the inspection process that
    they were not necessarily part of previously.
        Ms. Tlaib. Yes. Just to all my colleagues--not many of us
    here--I really think this is a very important factor because
    there is a saying we say in Detroit, mayors come and go, but
    neighborhoods and community do not go anywhere. We are still
    there, and it is like we have no real say or input or any kind
    of a sense of real self-determination of what we consider
    quality. That was the whole point of creating housing
    commissions, but now, again, there does not seem to be a direct
    accountability for our residents on those PHAs. Thank you so
    much. I yield.
        Chairman Davidson. I thank the gentlewoman. The gentlewoman
    from Texas. Ms. De La Cruz is now recognized for 5 minutes.
        Ms. De La Cruz. Thank you, Mr. Chairman, for holding this
    hearing today, and thank you to the witnesses for appearing
    before us.
        Today's hearing is simple. Our Nation's public housing
    agencies serve a critical function. We have talked about that.
    I have heard that from the reps over and over but ensuring
    access to housing for those that qualify for it starts first
    with proper oversight and transparency at HUD. It also is a
    critical step to ensure that we are being good stewards of our
    tax dollars. That is why I introduced H.R. 7280, the HUD
    Transparency Act, which was reported favorably out of this
    committee with a bipartisan 50 to zero vote. This is not a
    partisan issue, and transparency at HUD hand-in-hand with HUD's
    ability to achieve its stated goals, which, for the public
    housing program, is to provide a decent and safe rental housing
    for eligible low-income families, elderly, and persons with
    disabilities.
        That being said, for today's witnesses, just how critical
    proper oversight and accountability is at HUD and at local
    PHAs, and, unfortunately, how there seems to be a vacuum of
    that leadership. Mr. Slover, you said something that stuck with
    me in response to the internal backlash you received at the
    D.C. Housing Authority. This backlash was for simply requesting
    an audit, I might add. You stated, and I quote in part, That is
    my job. I have a fiduciary responsibility to oversight. If I
    see something wrong, I have to say something. In addition to a
    fiduciary responsibility, did you feel that requesting an audit
    was also in the best interest of the residents, many of whom
    are elderly that DCHA serves?
        Mr. Slover. One hundred percent. I think the purpose of the
    audit was to sort of ferret out the mismanagement and say,
    well, the mismanagement is really what results in poor
    conditions. As soon as somebody sees something in poor
    condition, they say we need more money. Maybe somebody should
    step back and say, ``Well, how did it get to these poor
    conditions?'' Well, it was so poorly managed that we need to
    manage it; so, management is critical, that was the purpose of
    the audit to come in from a top-to-bottom analysis.
        Ms. De La Cruz. Now, did that same audit that you request
    find that there were more than 80 deficiencies at DCHA?
        Mr. Slover. There were 80, but I would offer to you that it
    was a scratch of the surface. I was more surprised at what was
    not in the report than what was.
        Ms. De La Cruz. Very interesting. Why do you think, I
    should ask, why do you think there was so much internal
    opposition to this audit?
        Mr. Slover. You have to understand, if you take a look at
    the construct of just the D.C. Housing Authority Board, you
    have people on that Board who are basically making money off of
    the enterprise in one way or another. They are a mayoral
    appointees. They are there to push favors. I do not want to say
    nobody, but it did not seem that anybody was there who
    understood that their job was to work for the Authority, not
    for somebody who put them on that Board, and that is the
    problem with these boards is people are there for the wrong
    reason. They do not understand who their boss is. The boss is
    the Agency. Their client is the resident. That is it at the end
    of the day. All your decisions need to be made on how to
    improve the enterprise, not what you can get out of it.
        Ms. De La Cruz. It almost seems like it is a culture within
    the Agency. Would you agree with that?
        Mr. Slover. Absolutely, if you look at the money and where
    it goes. We had a scandal with the chairman of the Board who
    drove a $4.5 million contract to his girlfriend. Everybody knew
    it, and so it just goes on and on and on. DC's a unicameral
    form of government. There is only one party, and we are in a
    government that has very few checks and balances, and so the
    result is we are all part of the same fraternity. Everybody,
    let us do our thing.
        Ms. De La Cruz. Leadership always starts at the top, and
    you see the results of leadership all the way down, and that is
    what you are clearly stating here. I only have a couple more
    seconds to go. Thank you, gentlemen, for your time. I yield
    back.
        Chairman Davidson. I would like to thank our witnesses for
    their testimony today, and as we talk so much about D.C. Public
    Housing Authority, the ranking member and I were pointing out
    that the current Acting Secretary at HUD is a former director
    of D.C. Public Housing Authority. I think your testimony is
    incredibly important. I hope it rallies our committee to
    address these problems
        Without objection, I ask that all members have 5
    legislative days who wish to submit additional written
    questions for the witnesses to the chairman, which will be
    forwarded to witnesses for their response. If forwarded, I ask
    our witnesses to please respond promptly as you are able.

        [The information referred to can be found in the appendix.]

        Chairman Davidson. This hearing is now adjourned.

        [Whereupon, at 11:27 a.m., the subcommittee was adjourned.]

                                A P P E N D I X

                                  May 22, 2024

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