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HUD Gets Conned

Auditing the Department of Housing and Urban Development (HUD) is like draining the septic tank: it needs to be done, but you won’t like what you find.  The WaPo reports that HUD just added another scandal to a forty-six year tradition:

At a joint housing and oversight hearing of the House Financial Services Committee, the former HUD inspector general and the acting deputy inspector general described long-standing breakdowns within HUD’s HOME Investment Partnerships Program, which awards grants to state and local governments to develop affordable housing.

The program does not aggressively monitor or track thousands of local construction projects, putting federal money at risk and opening the door to fraud, the officials testified.

It’s much easier for federal agencies to write checks than to make sure they’re spent well. According to Acting Deputy Inspector General John McCarty, some of the perpetrators of the fraud had been planning on duping HUD all along, because they knew that it was easy to dupe.  After all, HUD has even laxer standards than Fannie and Freddie.

The fact that con-artists know HUD is an easy target speaks volumes about the department.  HUD has refused to learn from its history and therefore has been condemned to repeat it. None of this is surprising, but at least the congressional hearing reminds us that something is wrong.

The biggest puzzle: why more Democrats don’t care that the federal agency charged with helping poor people get affordable housing works so badly.  Surely the Congressional Black Caucus should be out there denouncing the fraud, organizing poor people to demonstrate against the thievery and generally working to make sure every precious dollar appropriated to help the poor actually got to its destination…

Yet there is a silence: CBC, ACORN, MORE, the unions, the establishment media.  Nobody on the left seems to care very much about an institutionalized rip-off of some of the neediest people in our society. It’s almost as if there is some kind of persistent and powerful invisible force at work warping public programs, weakening accounting standards, and stealing money from both taxpayers and the poor.  If Via Meadia weren’t convinced otherwise, we might almost suspect that endemic political corruption in many big city machines, winked at and perhaps participated in by local and national elected officials, systematically perverts these programs and fights any effort to expose corruption that benefits powerful players.

But that can’t be true.  This is America, after all.  And the left, unlike those evil red state racists and hillbillies, truly cares.  Right?

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  • Nate

    This is really frustrating. I work with HOME funds at a local non-profit and put them to good use in building (real) affordable housing. Our state agency (South Dakota) monitors all funding and reimbursements. Plus, the “grant” is paid back over the life of the loan at 0 percent interest, which leads to more affordable housing.

    The fact that HUD can’t keep its house in order (particularly in regards to monitoring state and county agencies) means that we will all suffer. It is incredibly frustrating seeing people abuse decent programs.

  • ALS

    It’s of course very likely that there’s some fraud and even very possible that there is corruption behind the fraud, but I would suggest that a major reason the left isn’t out organizing against HUD is that whenever a social welfare program gets criticized people tend to want to slash its funding rather than reform it. I would love to see these program operating better, but I’d rather see them continue to operate, period, than risk a backlash against the idea that government can help poor people. Does that seem fair?

  • Jacksonian Libertarian

    The Government Monopoly like all monopolies suffers from the lack of feedback that competition gives to the free enterprise system. Monopolies are therefore characterized by waste, corruption, empire building, feather bedding, etc… Not by continuous improvements in Quality, Service, and Price like the private sector.

  • Luke Lea

    An incident like that surface here in Chattanooga a few months ago. About half a million dollars that was supposed to have been used in the purchase of some local real estate simply disappeared. The minority group in charge of the funds didn’t even try to offer a plausible defense. Instead, it would appear, they were betting their books would never be audited. Anonymous local officials were quoted in the paper to the effect that moneys appropriated to this group were tacitly assumed to be going down a rabbit hole. I

    Does that not amount to collusion in the creation of a moral hazard? I’m not sure, but HUD is investigating.

  • Gene

    ALS, in answer to your question, no.

    If you really believe these programs are important, people like you should be the ones screaming the loudest for transparency and accountability. And maybe a little less cynicism about your countrymen (yes, that includes the ones you hate for their alleged callousness toward the poor) would serve you well. You might find out they really do have beating hearts and a sense of compassion. Although, god knows its more fun and easier to just insult and dismiss them.

  • NaSa

    You are probably not going to see ALS reply to your post.

    Thank you for demonstrating yet again how callous and completely flippant collectivists can be with other people’s money and why conservatives advocate for limited government – the road to hell is paved with the noblest of intentions -only those intentions are abused by the so called “looking out for the common good” people.

    Utterly disgusting.

  • ErisGuy

    “The biggest puzzle: why more Democrats don’t care that the federal agency charged with helping poor people get affordable housing works so badly”

    Joking, again. The Democrats don’t care where the money winds up because it winds up greasing the right palms.

  • Corlyss

    Personally, I’ve always thought DoT, DoE, HUD, and miscellaneous few other agencies born in the mid-60s to early 70s were excuses to tear down thriving old neighborhoods in SW DC in a kind of Federal “how-to” for of urban redevelopment. The ugly soviet-style grey monstrosities now occupying the sites were not a fair trade, IMO.

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