Rep Cmte Financial Services

Subcommittee Examines Legal and Ethical Violations at HUD

Witnesses testify senior HUD officials broke federal law

Washington, Feb 4 -

Senior officials at the Department of Housing and Urban Development (HUD) – some of whom were presidentially-appointed and Senate-confirmed – broke federal law and violated employment practices, according to investigators from HUD’s Office of Inspector General and the Government Accountability Office (GAO).

In testimony today before the House Financial Services Subcommittee on Oversight and Investigations, HUD Inspector General David Montoya described instances of “senior officials bending the rules and engaging in outright misconduct, sometimes with minimal risk that HUD will take appropriate action when it learns of the misconduct.”

A witness from the GAO told the Subcommittee that her agency concluded HUD officials also violated federal law by engaging in “indirect or grassroots lobbying” when they urged individuals at organizations that receive HUD funding to contact members of Congress regarding HUD’s pending appropriations bill. 

A report issued last year from HUD’s Inspector General into this same matter also revealed that HUD officials attempted to cover up their illegal lobbying activity by obstructing the investigation.

In his testimony today, Montoya recounted that episode, saying HUD officials “impeded our investigation by withholding information and threatening” investigators from the Inspector General’s office.  “In response to our report of investigation, HUD took no formal disciplinary action.” 

Montoya told the Subcommittee “that 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.”

Rep. Sean Duffy (R-WI), the Subcommittee’s chairman who called today’s hearing, recalled last year’s HUD inspector general report. “At the time, I found those revelations troubling, but I had hoped we could chalk it up to a few bad apples at HUD. 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." 

Witnesses at the Subcommittee today offered testimony about the following alleged legal and ethical violations at HUD: