Peering Inside HUD's Dark, Dirty Corners

WASHINGTON – The inspector general for the Department of Housing and Urban Development told a congressional panel that senior officials within the agency broke federal law and violated governmental employment practices in the hiring of a onetime lobbyist who used the position to act in favor of her former firm.

HUD Inspector General David Montoya told the House Subcommittee on Oversight and Investigations that the Office of Public and Indian Housing hired former registered lobbyist Debra Gross in February 2011 while she simultaneously served as deputy director of an industry group, the Council of Large Public Housing Authorities.

According to Montoya, during Gross' three years as deputy assistant secretary of her division’s policy office, she used her position to champion an agenda favorable to the public housing authorities. She also acted outside her authority by hiring two aides without proper vetting.

Montoya said Gross and others “provided false statements to investigators” regarding the HUD hiring process while under oath during interviews. Gross, Montoya said, denied participating in “pre-employment email communication” with key HUD officials although she ultimately admitted to having had “extensive communications.” The two employees hired by Gross were “less than forthcoming” about the nature of their hiring, although they both “stated that they were never interviewed during the hiring process.”

Furthermore, former Deputy Secretary Maurice Jones, along with four other senior HUD officials, violated agency policies and federal law in July 2013 when they dispatched an email to about 1,000 recipients asking them to lobby members of the Senate on a pending appropriations bill.  The U.S. Office of Special Counsel is currently determining whether the agency participated in prohibited personnel practices.

HUD officials also attempted to obstruct the anti-lobbying investigation and improperly influence other witnesses. The agency went so far in attempting to hide its activities, Montoya said, that it changed existing policies in the midst of the OIG investigation “in an attempt to legitimize their actions and impeded our investigation by withholding information and threatening the HUD-OIG investigating agents.”

Elliot Mincberg, then acting general deputy assistant secretary for HUD’s Congressional and Intergovernmental Relations unit, involved himself in a 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.

Mincberg resigned his position last April.

Montoya’s subcommittee appearance came less than two weeks after the inspector general’s office issued its report on HUD’s questionable dealings. He told the panel that his office has encountered examples 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.”

“While our investigation did not result in criminal prosecution, it did discern an institutional failure to follow HUD’s own existing internal policies,” Montoya said. “There were breakdowns in communication and in responsibility and a failure to adhere to existing policies and procedures.”

Montoya said misconduct within the agency runs deep and has contributed to the low morale found among employees -- HUD ranked dead last among mid-sized agencies in an employee satisfaction survey conducted last year.

“Misconduct and unethical behavior, particularly by high-ranking officials, does not, in my view, serve to enhance this unfavorable image,” Montoya said.

Montoya cited a number of examples of serious misconduct. Brian E. Thompson, a former HUD loan guarantee specialist, pled guilty to a charge of wire fraud stemming from a scheme in which he stole $843,000 of government money. This scheme was carried out from May 2013 until March 2014. He was sentenced to 26 months in prison.

Former Chief Human Capital Officer Janie Payne and other senior HUD officials committed prohibited personnel practices by engaging in nepotism, Montoya testified. In the case of Payne, while she did not hire relatives to work directly for her office, she advocated for the hiring of two of her close relatives for positions within HUD’s Office of the Chief Information Officer.

Montoya also cited several instances “to illustrate HUD’s reluctance in these matters to take strong administrative action that could serve as a deterrent to future misconduct and create an ethical environment in the workplace.”

In one case an unidentified HUD employee was found to have been sending obscene text messages to other HUD employees as well as to individuals from the employee’s former employer. The employee also improperly used his HUD position and access to a computer database to obtain personal information about these individuals.

The employee was arrested in June 2012 and HUD was notified within a few days of the arrest so that administrative action could be pursued. In September 2013, the employee pled guilty to three counts of stalking, two counts of threatening to commit a crime which will result in death or great bodily injury to another person and one count of unauthorized access to computers.

HUD was notified of the guilty plea the day after it was entered. In October 2013, the employee was sentenced to three years in prison.

“What is troubling is that the employee was on paid administrative leave while he served the 487 days in jail prior to his guilty plea on Sept. 10, 2013,” Montoya said. “He also remained on paid administrative leave while he served his last three to four months of the three year sentence until his release in December 2013.”

HUD has proposed that the employee be removed from federal service but the case is currently under appeal.

HUD officials did not testify at the hearing. But agency spokesman Jereon Brown issued a statement asserting that the vast majority of HUD’s 8,500 employees are “hardworking, ethical and dedicated civil servants.”

“The misbehavior of a small group of employees erodes the American people’s trust in their government and tarnishes the reputation of HUD’s hardworking employees,” he said.

“These actions by a small group of HUD employees detract from what my experience has shown to be the norm -- that is that the vast majority of HUD employees are hardworking, dedicated civil servants,” Montoya said. “It is a fact that poor actions and behavior are human nature and will occur throughout any industry or entity – private or government.”