Subcommittee Testimony Reveals Violations by HUD Officials

Investigators from HUD's Office of Inspector General (HUD OIG) and the Government Accountability Office (GAO) testified before the House Financial Services Subcommittee on Oversight and Investigations on Wednesday that some senior officials at HUD violated federal law and obstructed investigators' efforts to uncover wrongdoing.

Some of the individuals identified were presidentially-appointed and Senate-confirmed, according to testimony. HUD Inspector General David Montoya testified to the Subcommittee that some senior officials were guilty of "outright misconduct."

Witnesses offered testimony to the Subcommittee that senior HUD employees violated federal employment law practices as well as HUD policies by hiring Debra Gross, a former registered lobbyist, for a position with HUD's Office of Public and Indian Housing. Witnesses said Gross misused her position with HUD to further an agenda favorable to her former employer's public housing groups and also by hiring two HUD employees without proper vetting.

The HUD Inspector General found that Gross obstructed with the investigation of these actions by "providing false statements to investigators" and denying key HUD officials access to pre-employment email communications. Witnesses testified that the two employees were "less than forthcoming" regarding their hiring and both had stated they were never interviewed prior to being hired.

In a separate case, HUD's Inspector General testified that then Deputy Secretary Maurice Jones and four other senior HUD officials violated HUD's administrative policies by engaging in a grass-roots lobbying campaign. Witnesses said Jones and the four others re-transmitted a July 21, 2013 email urging 1,000 recipients to lobby specified Senators regarding a pending appropriations bill. In addition to violating HUD policy, GAO found dissemination of this email by Jones and the others to be in violation of federal anti-lobbying laws.

Testimony before the Subcommittee also revealed that certain HUD officials attempted to obstruct the investigation in that case by attempting to improperly influence witnesses, threatening investigators from HUD OIG they would be "charged as a result of their inappropriate actions," and withholding information regarding their involvement with the dissemination of the email.

"(T)hat case illustrated what can happen when senior government officials veer from the course of ethical decision-making, skirt the edges, and act in a manner that is not in the government’s best interest," Montoya told the Subcommittee.

Montoya testified that a HUD OIG report issued last year regarding the anti-lobbying investigation detailed attempts by HUD officials to cover up their illegal activity, but he said HUD took "no formal disciplinary action" in response to the report of the investigation.

"At the time, I found those revelations troubling, but I had hoped we could chalk it up to a few bad apples at HUD," said U.S. Representative Sean Duffy (R-Wisconsin), Chairman of the Subcommittee. "But we're back here today to discuss what happened with those so called 'bad apples' because of other, completely unrelated allegations that have surfaced."