Cummings calls for closer look at misuse of federal housing funds

By Vicki Needham - 05/17/11 04:09 PM ET

House Oversight and Government Reform ranking member Elijah Cummings (D-Md.) wants to take a closer look at allegations that a federal housing program misused hundreds of millions of dollars.

Cummings sent a letter to panel Chairman Darrell Issa (R-Calif.) on Tuesday asking that the committee investigate possible financial mismanagement at the Department of Housing and Urban Development (HUD) in a construction program that provides affordable housing.

"If these allegations are accurate, they are very troubling," Cummings wrote.

A yearlong investigation by The Washington Post found that nearly 700 projects receiving $400 million in grants distributed to developers have stalled or been otherwise abandoned and haven't undergone sufficient federal and local agency oversight. There are legal impediments that prevent recouping money from failed projects.

Cummings is requesting a briefing from HUD to begin the process.

The newspaper examined every major project currently funded under the HUD program — a database of 5,100 projects worth $3.2 billion — examining more than 600 satellite images and collecting information from 165 housing agencies nationwide.

He said the issue presents "an opportunity for bipartisan and constructive oversight" to examine "potential flaws in the block grant process that allegedly led to fraud, waste and delay."

“At a time when so many Americans are struggling to stay in their homes, it would be deeply upsetting if these allegations proved true,” Cummings said. “Our committee should help ensure that contractors actually do the work they receive taxpayer funds for, and that local and federal agencies properly oversee funds they distribute. We should also correct any deficiencies in the law that prevent agencies from adequately monitoring projects and recouping taxpayer funds if necessary.”

Senate Banking Chairman Tim Johnson (D-S.D.) and ranking member Richard Shelby (R-Ala.) said their committee will look into The Washington Post's yearlong investigation into how HUD spent billions of dollars on local housing programs.

“We are deeply concerned by these reports, particularly at a time when so many Americans are in need of affordable housing," they said in a joint statement.

The committee hasn't scheduled a hearing or said how they will move forward.

"The committee takes its oversight responsibilities very seriously, and we plan to get to the bottom of this issue,” they said.

The Post investigation found that local housing agencies received funding with few rules to follow, protections or even a way to track projects designed to provide affordable housing to the working poor.