Will Obama appointees who enabled fraud, then covered it up, be made to pay?

Will Obama appointees who enabled fraud, then covered it up, be made to pay?
Image: ced.sog.unc.edu

A federal agency will be breaking the law unless two of its top Obama administration appointees repay their salaries to taxpayers after barring another federal employee from telling Congress how higher-ups were allowing multi-million dollar frauds as part of a political deal.

The Government Accountability Office (GAO) determined Tuesday that the two Department of Housing and Urban Development (HUD) political appointees refused to let an employee speak with the House Committee on Oversight and Government Reform about a major scandal.

The nonpartisan watchdog agency cited a federal law barring the use of taxpayer dollars to pay executive branch officials to obstruct Congress:

No part of any appropriation contained in this or any other act shall be available for the payment of the salary of any officer or employee of the federal government, who … prohibits or prevents, or attempts or threatens to prohibit or prevent, any other officer or employee of the federal government from having any direct oral or written communication or contact with any Member, committee, or subcommittee of the Congress.

The GAO said that unless HUD’s associate general counsel and a deputy assistant secretary personally return their salaries, the department would be knowingly retaining “improper payments” on its books in violation of the law.

The oversight panel, in 2012, was uncovering the fact that then-Assistant Attorney General Tom Perez made a secret deal to make a potentially damaging lawsuit go away. He reportedly told the litigant that in exchange for dropping the suit, the government would look the other way on fraud the litigant was doing in an unrelated matter, which was being investigated by HUD.

In October 2012, the committee, then led by California Republican Rep. Darrell Issa , requested to interview the two officials plus the department’s general counsel and a regional director of Fair Housing and Equal Opportunity.

But HUD sent only the top political appointees to speak, and they “were unable to answer several basic factual questions about the timeline of events and actions of HUD officials,” because they were substantially higher in management than the specialized employees actually involved.

HUD still refused to allow Congress to speak to the regional director six months later, despite repeated requests, so the committee issued a subpoena.

The regional director then said he had wanted to talk with Congress, but HUD’s legal office told him to stop responding to the committee.

HUD’s general counsel and deputy assistant secretary claimed it was “not normal” for Congress to interview high-ranking career bureaucrats who manage day-to-day operations and have institutional knowledge. Congress should instead talk only to political appointees who typically serve short stints in federal agencies, the officials said.

They seemed to believe HUD should decide which congressional investigations into major misconduct were legitimate and which to ignore.

“We do not believe the committee has shown a particularized need for the additional interviews,” they wrote.

GAO quoted guidance noting that “federal employees are often the source of information about agency operations suppressed by their superiors [s]ince they are much closer to the actual working situation than top agency officials.”

Since HUD refused to let Congress speak with the official for six months, the salary amounts involved could have been substantial. The department claimed for those months that it was too busy with more important matters than deal with Congress. Sometimes, HUD officials didn’t even reply to congressional inquiries at all.

But they will save some money thanks to a pedantic argument that for most of the time, their delays and denials could be construed in “good faith,” whereas for a three-week period they were outright refusing in bad faith.

The GAO said during a period in April “the communications demonstrate that the delay became a denial to make the Regional Director available for interview.”

The GAO opinion that endless vague reasons for delay are tantamount to refusal is a warning to numerous agencies that increasingly use this approach with Congress.

Sen.Charles Grassley , an Iowa Republican, said in a statement that the nonpartisan report confirms that “tens of millions of tax dollars [were] potentially lost to fraud and then [officials] obstructed a federal employee from talking to Congress about it … The GAO opinion is a significant step forward in holding the Obama Administration accountable for trying to thwart oversight and to deter agencies from trying to deny a witness the opportunity to communicate directly with Congress in the future.”

Despite the ruling, the appointees, whose names HUD would not even say, are unlikely to repay their salaries anytime soon.

A HUD spokesman told The Daily Caller News Foundation that the department is “weighing a request that GAO reconsider its opinion of this 2013 case. The new opinion of the Government Accountability Office is a reversal of its earlier, 2014, opinion that concluded there was no violation of appropriations requirements.”

GAO said that evidence was withheld from it prior to the previous report and that new evidence makes the situation unambiguous.

This report, by Luke Rosiak, was cross-posted by arrangement with the Daily Caller News Foundation.

LU Staff

LU Staff

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