Patrick McHenryChairman

Washington, February 4, 2015 - 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:

• HUD’s Inspector General recently found that senior HUD employees violated federal employment law practices and HUD policies by hiring former registered lobbyist Debra Gross within HUD’s Office of Public and Indian Housing.  Ms. Gross improperly used her position at HUD to champion an agenda favorable to the public housing authorities represented by her former employer.  Ms. Gross also acted outside her authority by hiring two HUD employees without proper vetting. 

• HUD’s Inspector General concluded that Ms. Gross and her two hires “provided false statements to investigators” related to their “HUD hiring and communications regarding the hiring” while under oath during interviews.  Although Ms. Gross denied “pre-employment email communication” with key HUD officials, she ultimately admitted to having had “extensive communications.”  The two employees hired by Ms. Gross were “less than forthcoming” about the nature of their hiring, although they both “stated that they were never interviewed during the hiring process.”
  

• HUD’s Inspector General separately confirmed that then-Deputy Secretary Maurice Jones, along with four other senior HUD officials, violated HUD administrative policies in connection with preparing and transmitting a July 31, 2013 e-mail requesting that 1,000 recipients lobby specified Senators regarding a pending appropriations bill.  The GAO subsequently concluded that HUD violated federal anti-lobbying laws by disseminating this email.  The U.S. Office of Special Counsel is currently determining whether any prohibited personnel practices were committed

• Individuals at HUD also attempted to obstruct the anti-lobbying investigation and improperly influence other witnesses.  Elliot Mincberg -- then Acting General Deputy Assistant Secretary for HUD’s Congressional and Intergovernmental Relations unit -- inserted himself into an ongoing witness interview, inappropriately contacted employees of HUD’s Office of General Counsel before their interviews, threatened HUD inspector general investigators that they would be “charged as a result of their inappropriate actions,” and was not forthcoming about his involvement in the dissemination of the July 31 e-mail communication. 

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