[Congressional Record Volume 159, Number 12 (Tuesday, January 29, 2013)]
[Senate]
[Pages S352-S354]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TRANSPARENCY AT HUD
Mr. GRASSLEY. Mr. President, my fellow Members know the issue of
transparency is a very favorite topic of mine, and I come to the floor
to speak about transparency as it relates to a very specific problem
within the Department of Housing and Urban Development. It is no secret
I have worked to bring greater transparency and accountability to all
parts of the Federal Government because with transparency I think we
get more accountability.
The voters of Iowa have entrusted me to continue my oversight
responsibilities no matter who occupies the White House, and since I am
a Republican, people might think I am doing it because we have a
Democratic President. I think I have a reputation for being an equal
opportunity overseer of the executive branch of government.
For several years I have been conducting oversight of the U.S.
Department of Housing and Urban Development; everybody knows this is
commonly referred to as HUD, H-U-D. HUD's core mission, according to
its Web site, is to ``create strong, sustainable, inclusive communities
and quality, affordable homes for all.'' These responsibilities have
grown larger and more complex over the last few years. The mortgage
crisis continues to affect the housing market.
Secretary Donovan was recently tapped to oversee the Hurricane Sandy
recovery in the Northeast. HUD's yearly budget is nearly $38 billion.
Secretary Donovan should understand the importance of oversight and
transparency to combat waste, fraud, and abuse. I have my doubts,
though, because while I have sent dozens of letters to HUD, the
Secretary has not signed a single reply. The responses I do receive are
often months late and don't answer some of my most pressing concerns.
For instance, last August I sent a letter requesting information on
conference spending and employee bonuses. HUD provided no conference
spending documents but instead urged me to review a list of inspector
general audit reports. My staff has reviewed these audit reports, but
none of the audit reports provide a comprehensive review of conference
spending. What is even more frustrating is that the response never
referenced bonus spending at all. It seems oversight and transparency
are not high priorities at the Department of Housing and Urban
Development.
Every year HUD provides at least $4 billion to public housing
authorities across the country--along with nearly $19 billion of
section 8 vouchers. In 2009, the Obama administration provided yet
another $4 billion in stimulus funding for the housing authorities--all
with little or no oversight. Public housing authorities operate in a
gray area. HUD argues that they are State and local government
entities, and it is thus--according to HUD--State and local governments
that bear the primary responsibility for the housing authority actions.
Up to 90 percent of their total funding comes from the Federal
Government, thus making it HUD's responsibility to ensure the money is
spent as intended.
My office went to work to determine the compensation packages for a
handful of housing authorities spread around the country--mostly in the
larger cities. Some authorities would not provide responses, but others
responded with some troubling answers. It became apparent many
executive directors were living very high on the hog. The fact is
executive salaries, and other compensation at some public housing
authorities, were a major problem and the amounts were then hidden from
the taxpayers.
Some housing authority executive directors were earning high six-
figure salaries and benefits that sometimes included a vehicle, housing
allowance, and lucrative bonuses. Many of the executive directors were
making more than even the Governor of the State they were located in.
From Los Angeles, CA, to Boston, MA, they were raking in huge salaries.
Unfortunately, no one at the HUD Headquarters in Washington, DC, was
watching or even showed any concern.
In Philadelphia, the executive director's salary was $300,000, plus a
$45,000 bonus. He had a housing authority car and driver, and the
housing authority actually paid his mortgage. This money is supposed to
help people with very low incomes afford safe and decent housing, but
instead they were concerned about their own salary and their own
housing. The taxpayers' money was meant to go to the lower income
people for safe and decent housing and all the money was not being used
for that. It is not supposed to subsidize the housing costs of a
government bureaucrat in Philadelphia who already makes $345,000 a
year. In Chelsea, MA, the executive director's salary was $360,000. He
cashed out weeks of unused leave and sick time while only spending
about 15 full days per year in the office.
These executive directors used taxpayers' money to build and protect
their own fiefdoms, usually at the expense of the poor. In
Philadelphia, this included spending millions of dollars on an army of
well-connected lawyers. Ironically, these lawyers were paid with
taxpayers' money to thwart investigations that were aimed at
safeguarding taxpayer money. The HUD Office of Inspector General had
done battle with these armies of lawyers over and over around the
entire country, and the taxpayers are funding both sides of the fight.
In addition, no-bid contracts and contracts steered toward friends
seemed to be common at many housing authorities.
As early as October 2010, I asked HUD to provide salary and
compensation information for executive directors at
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the 25 largest housing authorities. Instead of numbers, I received the
following statement:
In response to your questions related to Executive
Directors' salaries, currently HUD does not regulate
compensation for Housing Authority executive directors.
However, in light of what has taken place with the
Philadelphia Housing Authority, HUD is working closely with
our Office of General Counsel to assess this policy.
It is pretty obvious that is not an answer to anything I asked. HUD
needs to take this issue far more seriously.
Last Wednesday, the director of the Chelsea Housing Authority was
charged with four felony counts. According to the Boston Globe, he was
indicted for deliberately concealing his salary from State and Federal
entities. I hope this is a warning to other housing authorities that
abuse of taxpayers' dollars is totally unacceptable. I commend HUD
Inspector General David Montoya, the U.S. Attorney's Office in
Massachusetts, and, of course, the FBI for vigorously investigating the
problems in Chelsea. Others around the country need to take note of
what happened in Chelsea. I understand this investigation continues, so
stay tuned.
The No. 1 priority for HUD and these directors should be to provide
what the law intends with the taxpayers' money--to provide safe,
decent, and sanitary housing for people in need instead of lining the
pockets of directors. Feathering their own nests seems to have been the
focus of some for far too long. Unfortunately, instead of getting
straight answers from HUD, I must rely on courageous whistleblowers and
newspaper accounts to actually get these facts.
Due to mounting pressure, HUD requested the compensation data for the
top five highest compensated employees at housing authorities across
the country. The results must be really embarrassing because the Obama
administration would make only aggregate data available to the public.
That way, the administration has made it impossible to tell which
authorities are the worst offenders.
I asked that HUD make all salary data public in a June 2000 letter I
wrote to Secretary Donovan. It is one of many letters the Secretary has
failed to answer. In fact, no one at HUD responded to the letter at
all. I have also sent letters to HUD requesting information about
conference and travel spending, as well as the number and the cost of
take-home vehicles for HUD and all public housing authorities. Letters
were also sent about problems at New York City, Houston, and Port
Arthur, TX, housing authorities in those cities. I am still waiting for
responses from Secretary Donovan.
Most recently, I sent letters in October of 2012 to Senate
appropriators and the Senate Banking Committee with jurisdiction over
these issues. There needs to be public hearings into the massive waste
of taxpayers' money at HUD. My colleagues need to know the extent of
the problems and that I am ready to work with Members of this body to
address these issues.
Mr. President, before I finish, I ask unanimous consent to have the
referenced letters printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Committee on the Judiciary,
Washington, DC, October 17, 2012.
Hon. Robert Menendez,
Chairman, Subcommittee on Housing, Transportation, and
Community Development, Committee on Banking, Housing and
Urban Affairs, U.S. Senate, Washington, DC.
Hon. Jim W. DeMint,
Ranking Member, Subcommittee on Housing, Transportation, and
Community Development, Committee on Banking, Housing and
Urban Affairs, U.S. Senate, Washington, DC.
Dear Chairman Menendez and Ranking Member DeMint: Since
March 15, 2010, I have been investigating the Department of
Housing and Urban Development (HUD). During those two years I
have been writing to HUD Secretary Shaun Donovan regarding
concerns about waste, fraud, and abuse of taxpayer money by
Public Housing Authorities (PHAs). Many of those letters have
gone unanswered, and I ask for your help to receive responses
from HUD. I have attached copies of the most recent
correspondence for your review.
Many PHAs continue to receive funding despite having a long
track record of such problems. Over the weekend the Boston
Globe reported on numerous issues that plague PHAs in
Massachusetts, and I have attached the article for your
review. These problems have been found at PHAs large and
small across the country. Most recently, I have raised
concerns about HUD conference spending, PHA take-home vehicle
abuses and the need for greater transparency of PHA executive
director compensation packages.
Given your responsibilities as Chairman and Ranking Member
of the Housing, Transportation, and Community Development
Subcommittee with jurisdiction over HUD programs, I'm seeking
your help. These issues need to be investigated thoroughly,
and it is your subcommittee's responsibility to ensure that
tax dollars meant to provide housing to the poor are not
further wasted or diverted to other purposes. Ultimately, it
is the residents of public housing who are being cheated and
abused as a result of this mismanagement.
Thank you for your prompt attention to these important
issues.
Sincerely,
Charles E. Grassley,
Ranking Member.
____
U.S. Senate,
Committee on the Judiciary,
Washington, DC, October 17, 2012.
Hon. Patty Murray,
Chairman, Subcommittee on Transportation, Housing, and Urban
Development, and Related Agencies, Committee on
Appropriations, U. S. Senate, Washington, DC.
Hon. Susan M. Collins,
Ranking Member, Subcommittee on Transportation, Housing and
Urban Development, and Related Agencies, Committee on
Appropriations, U.S. Senate, Washington, DC.
Dear Chairman Murray and Ranking Member Collins: Since
March 15, 2010, I have been investigating the Department of
Housing and Urban Development (HUD). During those two years I
have been writing to HUD Secretary Shaun Donovan regarding
concerns about waste, fraud, and abuse of taxpayer money by
Public Housing Authorities (PHAs). Many of those letters have
gone unanswered, and I ask for your help to receive responses
from HUD. I have attached copies of the most recent
correspondence for your review.
Many PHAs continue to receive funding despite having a long
track record of such problems. Over the weekend the Boston
Globe reported on numerous issues that plague PHAs in
Massachusetts, and I have attached the article for your
review. These problems have been found at PHAs large and
small across the country. Most recently, I have raised
concerns about HUD conference spending, PHA take-home vehicle
abuses and the need for greater transparency of PHA executive
director compensation packages.
Given your responsibilities as Chairman and Ranking Member
of the Appropriations Subcommittee with jurisdiction over HUD
funding, I'm seeking your help. These issues need to be
investigated thoroughly, and it is your subcommittee's
responsibility to ensure that tax dollars meant to provide
housing to the poor are not further wasted or diverted to
other purposes. Ultimately, it is the residents of public
housing who are being cheated and abused as a result of this
mismanagement.
Thank you for your prompt attention to these important
issues.
Sincerely,
Charles E. Grassley,
Ranking Member.
Mr. GRASSLEY. To sum up, oversight, whether it is about HUD or any
government bureaucracy, is necessary to protect the taxpayers. I take
this duty seriously. I am not going away and will continue to
vigorously oversee problems at HUD. I urge Secretary Donovan to make
executive compensation and all funding data available to the public. It
would shed light in an area that has rarely been seen with the light
shining in. As some Supreme Court Justice said sometime, sunlight keeps
mold from happening, or something to that effect.
Transparency is not the only solution, though. HUD also needs to put
controls in place to prevent waste, fraud, and abuse. But transparency
may be the quickest and most effective way to curb the worst abuses.
The Obama administration could release that executive compensation data
today if it wanted to, and it should release that data.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. King). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. HARKIN. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Ms. Warren). Without objection, it is so
ordered.
(The remarks of Mr. Harkin pertaining to the introduction of S. 168
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
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