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Here’s Why HUD Often Hires Incompetents And Criminals

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Luke Rosiak Investigative Reporter

Giving jobs to incompetent people and convicted criminals due to poor background checks is a hiring staple at the Department of Housing and Urban Development (HUD).

The department “does not have an effective case management system for the timely review and evaluation of the character, background, and history, of candidates for employment,” resulting in “inability to timely identify candidates for employment who have a criminal record, or a pending criminal charge,” according to a 2013 inspector general report prompted by discovery of a mortgage fraud scheme involving a government employee.

The “systemic weakness” report is being made public for the first time after it was obtained by The Daily Caller News Foundation through a Freedom of Information Act request.

The same report said HUD also has an “inability to take timely and appropriate personnel action relative to employees who pose a personnel security risk,” and recommended that the department “should immediately develop and implement” procedures to prevent bad hires and to deal with those who slip through.

But since then, as exclusively reported by TheDCNF, HUD’s Government National Mortgage Association — Ginnie Mae — hired David Fender as its chief financial officer, even though he falsely answered “no” when asked if he had been fired in the last five years and also whether he was delinquent on federal taxes, according to HUD’s inspector general.

He was hired despite a pre-hire background check that said he was not recommended “for a government security clearance or employment” after his previous boss told screeners he had been dismissed for incompetence and running a side-business on work time. Fender claimed on his application that he hadn’t been fired recently, meaning HUD knew he was dishonest at the time it hired him.

 

HUD spokeswoman Gina Screen refused to tell TheDCNF if HUD ever implemented the IG’s recommendations from 2013. The IG has repeatedly said HUD officials often leave known shortcomings uncorrected.

In a 2014 case, HUD officials hired an intern for a full-time job overseeing millions of dollars in federal grants even though she had been caught while still an intern stealing a housing project unit for her sister and lying about it to investigators.

For years, HUD’s senior officials have flouted basic federal ethics laws enforced by the Office of Government Ethics (OGE) requiring the filing of financial disclosure forms showing conflicts of interest.

Officials hired Debra Gross as deputy assistant secretary for Public Housing while she simultaneously worked for a lobbying trade group representing the housing authorities she was in charge of regulating.

Gross didn’t file the required OGE form that would have shown the conflict of interest. The HUD General Counsel did nothing, even though Gross also lied under oath. The IG said such lying “was not an isolated occurrence” because only three of 16 highly paid HUD officials with known outside employers filed required ethics reports.

This month, the Office of Special Counsel concluded that HUD Secretary Julian Castro violated the Hatch Act by using his government position for partisan political purposes. He faces no penalties because President Barack Obama decided Castro’s admission of a mistake was sufficient.

In 2013, then-Deputy Secretary Maurice Jones used HUD resources to ask employees and recipients of HUD money to lobby Congress for more money for the agency. HUD’s high-ranking congressional liaison then tried to sabotage an investigation by Congress.

“HUD officials 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,” HUD’s IG told Congress.

“In response to our report of investigation, HUD took no formal disciplinary action. Elliott Mincberg resigned from his HUD position in April 2014 and [top ethics official] Peter Constantine was verbally reprimanded.”

Brian E. Thompson, a HUD loan guarantee specialist, stole nearly a million dollars from the government. He was hired despite convictions for armed robbery, check deception and felony theft.

HUD’s top three human resources officials all separately violated civil service regulations that bar using their positions to get government jobs for relatives.

HUD’s associate general counsel and a deputy assistant secretary told a company they would intentionally look the other way on millions of dollars of fraud as part of a political deal, and violated the law to block a subordinate from telling Congress about the corruptions. The Government Accountability Office ruled that by law, that meant the officials personally had to give back their salaries, but HUD hasn’t asked them to, and they haven’t done so.

Part 1: Feds Put Fake-CPA Tax Cheat In Charge Of $1.5 Trillion In Mortgages

Part 2: Meet the Serial Con Artist Who Talked His Way Into Managing Nation’s Mortgage Portfolio

HUD Won't Stop Hiring Criminals

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