[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

[[Page S353]]

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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