WASHINGTON – Sen. Chuck Grassley of Iowa today pressed the Treasury Department on why it has recovered only one percent -- $113,592 of $11 million – wasted on restaurant meals, employee gifts and a $500 per month company Mercedes from the Hardest Hit Fund (HHF), a program meant to help homeowners who suffered during the housing crisis.
“Treasury reiterated its stance that state housing finance agencies (HFAs) would be required ‘to repay HHF when Treasury identifies improper expenditures,’ ” Grassley wrote to Treasury Secretary Steven Mnuchin. “Yet Treasury has only recovered $113,592 so far this year, a paltry one percent of the total taxpayer dollars wasted. These wasted millions should have been used to help homeowners keep their homes, not (on) lavish meals, employee bonuses or luxury vehicles. This is unacceptable.”
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) found serious wasteful spending in the HHF program. This included more than $3 million wasted on improper expenditures at housing agencies around the country, on top of the $8 million wasted by Nevada that SIGTARP uncovered earlier. Treasury has recovered only $80,000 resulting from the Nevada inquiry and $33,592 from the states identified in a second audit.
“I want to ensure that the Treasury Department fulfills its responsibility to recover the funding outlined in the report and ensures that the states take appropriate action to correct the administrative deficiencies that led to the waste of millions of taxpayer dollars,” Grassley wrote.
In Florida, for instance, HHF funds were used to pay nearly $443,000 in employee bonuses and for a $52,000 dinner, despite that Florida reportedly provided assistance only to “20 percent of homeowners who applied to modify their loan.”
Grassley asked that the Treasury Department review HHF spending in all 19 states identified and the District of Columbia to recoup all the improperly used funding and to determine who is responsible for what happened. “Once that determination is made, there should be an appropriate measure of accountability, including potential disciplinary action,” Grassley wrote. “The management and funding of this program should be used as a prime example of the need to head off this waste.”
Grassley’s letter is available here. A response from the Treasury Department to his prior inquiry is available here. SIGTARP’s Nevada audit is available here. A SIGTARP press release on the August audit is available here.