Despite a prohibition against taxpayer money being spent to influence government, millions of dollars meant to provide housing to poor and underprivileged areas instead went to lobbying because of lax oversight by the Department of Housing and Urban Development.
The findings from HUD’s internal watchdog expose a system in which offices around the country funded by the federal housing agency used tax dollars to campaign for favorable policies and larger budgets, government watchdogs found.
The failure to police such expenditures gives good reason for taxpayers to be angry, experts told The Washington Times.
“You’re using federal money to lobby Congress to get more federal money,” said Mark Calabria, a former HUD official who then spent seven years overseeing the agency as a Senate staff member working with the Banking Committee.
“This is directly taking money that has been allocated by Congress to helping poor people and it’s being diverted to lobbying,” he said.
Investigators said the housing agencies in cities across the U.S. failed to disclose roughly $2.5 million they spent on lobbying — and that was only at nine of the 12 agencies that report engaging in lobbying activities.
However, watchdogs worry that undisclosed lobbying still could be occurring at the 3,200 other agencies HUD oversees, but which do not acknowledge engaging in any lobbying at all.
For a lack of control that has allowed its various offices to violate transparency and spending laws — and take money that could have been used to provide housing — the Department of Housing and Urban Development wins this week’s Golden Hammer, a distinction given out by The Washington Times to mark examples of waste, fraud and abuse with taxpayer money.
The Philadelphia Housing Authority failed to disclose lobbying activities for which it spent as much as $660,000 during the period 2006 to 2010, the report found. It also improperly spent $48,500 in federal funds on lobbying activities conducted through law firms, which the agency should be required to repay, the HUD inspector general said.
The Housing Authority of the City of Pittsburgh failed to disclose lobbying activities on which it improperly spent as much as $80,000 in federal funds in 2004 and 2005, and Home Forward in Portland, Oregon, failed to disclose lobbying activities conducted on its behalf.
While inspectors think the examined housing agencies may have wasted only $129,000 in federal money, they cautioned the problem could be affecting many more offices than the ones investigators reviewed, and suggested a further investigation of the problem.
“Because HUD failed to implement adequate policies to monitor agencies’ compliance with lobbying requirements HUD lacked assurance that other agencies did not spend Federal funds on lobbying activities or violate other lobbying-related requirements,” the inspector general report, released last week, found.
HUD officials said the “extremely small sample size” investigators looked at does not warrant extensive changes at the agency to correct problems, and that additional steps to “obtain, track and retain lobbying certificates and disclosures is not a necessary remedy.”
“In light of these facts, the recommendations are overly burdensome to implement in relation to limited error rate and limited staff resources,” said a letter signed by Milan Ozdinec, the deputy assistant secretary in charge of public housing.
“The suggestion that HUD staff take proactive steps to detect violations related to lobbying activities would present an enormous challenge to HUD staff,” the statement said. “To require staff to run queries on approximately 3,200 [public housing agencies] does not appear to be an effective control to cover 12 or so exception cases.”
The lobbying issues have escalated beyond the scope of a single watchdog, bringing in investigators from HUD’s internal Office of Inspector General, the Government Accountability Office and the House Financial Services Subcommittee on Oversight and Investigations.
“Millions of Americans who have fallen on hard times — veterans, single mothers, their children — they all rely on HUD’s programs,” said Rep. Sean Duffy, Wisconsin Republican and chairman of the House Financial Services Subcommittee on Oversight and Investigations.
The agency’s funding “should not be diverted to illegal lobbying efforts or overpaying a lobbyist,” said Mr. Duffy, at a Wednesday committee hearing examining HUD’s policies.
Part of the problem, the inspector general report found, was that HUD rarely monitored the housing agencies and instead relied on their word they were complying with lobbying laws.
“HUD accepted and relied on agencies’ certifications and disclosures without performing additional verification,” the IG report found. “HUD lacked reasonable assurance that agencies did not spend federal funds on lobbying activities, and the lack of accurate lobbying disclosures could create an appearance of a lack of transparency.”
HUD officials from the top down have urged their members and member agencies to lobby Congress in order to protect their interests.
Last year, HUD Secretary Shaun Donovan told an audience at the National Leagues of Cities Conference in Washington that local HUD officials should be lobbying their congressional representatives to restore funding to key programs.
The same year, the agency’s deputy secretary sent an e-mail to more than 1,000 people asking them to call senators in support of a funding bill for HUD, according to the Government Accountability Office.
“It is critical that your Senator hears from you NOW,” the e-mail read. “We need to maintain the current level of Republican support for the Senate [bill], acquire other Republican supporters and ensure vocal and active support from Democratic senators.”
The message then included a list of 17 U.S. senators that HUD wanted the public to focus on.
Instead of using its time and resources lobbying Congress, HUD officials would be better off running their programs more efficiently, Mr. Calabria said.
“We the taxpayers are having to pay the public housing industry to lobby Congress on its own behalf,” said Mr. Calabria, the director of Financial Regulations Studies at the Cato Institute, a libertarian think-tank. “If JP Morgan had used TARP money to go lobby Congress, we’d all be greatly offended.”
One of the most recent updates to the lobbying law, a 2012 appropriations act, states specifically that “no part of any funds appropriated in this or any other Act shall be used by an agency of the executive branch for publicity or propaganda purposes.”
The law goes on to say that no money can be used to distribute any kind of “pamphlet, booklet, publication, radio, television or film presentation designed to support or defeat legislation pending before the Congress.”
As for the housing agencies, the biggest culprit could be HUD’s Moving to Work program, investigators said. The IG noted that agencies involved in the program make up just one percent of all housing organizations, yet included 44 percent of all lobbying disclosure violations.