Letter to The Honorable Shaun Donovan, Secretary, U.S. Department of Housing and Urban Development- Make Public Housing Authority Salary Data Public
Letter
Sen. Chuck Grassley of Iowa is urging the Department of Housing and Urban Development to make public the salary data it collected from public housing authorities across the country under pressure from Grassley and amid numerous salary scandals. The Administration made only aggregate information public in announcing a salary cap proposal this week.
"Making only a handful of the information public is a missed opportunity," Grassley said. "We've seen several significant gold-plated compensation packages at housing authorities. The abuses have grown in the absence of oversight. My review has shown that the housing authorities that go off the rails count on a lack of transparency to do what they want. If salaries are public, there's a deterrent for abuse."
This week, HUD released aggregate salary data from 2010 from the nation's housing authorities and announced a proposal to cap the federal part of housing authority salaries.
Grassley has been scrutinizing abuses by certain public housing authorities since 2010, working to hold HUD accountable for the way federal housing dollars are used and to protect those dollars from wasteful and abusive spending.
In addition to seeking transparency of the existing salary data, Grassley said he intends to look at the Administration's salary cap proposal to make sure it closes the many loopholes around compensation caps. A cap on federal funding for salaries does not apply to local funding, so salaries could still be high if the local agencies choose to supplement the salaries, another reason for transparency, Grassley said. Housing authorities sometimes give bonuses and significant perks such as vehicles, accrued vacation pay, and rolling contracts that make it expensive to remove the top employee.
The federal government spends roughly $6 billion to $7 billion per year on public housing. Another $4 billion was provided by the 2009 economic stimulus legislation. More than 3,000 public housing authorities nationwide manage public housing programs. "The federal government needs to pay a lot more attention to what happens at local housing authorities," Grassley said. "Taxpayers are paying for safe, clean public housing for those in need. HUD has to make sure the services are delivered and that the taxpayers' money is spent as intended. Better transparency would be a good start."
Via Electronic Transmission
The Honorable Shaun Donovan
Secretary
U.S. Department of Housing and Urban Development
Robert C. Weaver Federal Building
451 Seventh Street
Washington, DC 20410
Dear Secretary Donovan:
Last night, my staff was briefed by Department of Housing and Urban Development (HUD/Department) officials regarding the release of compensation data for public housing authority (PHA) top wage earners. Over the past two years, my investigations have found exorbitant compensation along with waste, fraud, and abuse at PHAs large and small across the country. Many PHAs have operated with nearly zero oversight, allowing a culture of corruption to rule. A few of the problems include: outlandish bonuses, nepotism, and large law firm/consultant billings that have become the norm at far too many PHAs.
In August 2011, HUD requested compensation data for the top five highest compensated employees at PHAs across the country (HUD form 52725). While this action was encouraging, I also urge HUD to make this data public for greater transparency and accountability to the taxpayer. Specifically, HUD should post all salary and compensation data on their website. In a December 15, 2011, response from HUD, the Department stated that it "notified all PHAs in late August that they will be required to report, on an annual basis, the compensation paid to their top five paid employees. This information will be posted on a HUD website, consistent with applicable law. We are now in the process of collecting this information for the first time, and expect that is will be posted during the first quarter of the year."1 Unfortunately, the Obama administration has chosen to only make aggregate data public.
It is my understanding that HUD has some concerns regarding the release of the compensation data but making this data public would greatly increase transparency and might deter some bad actors. Meanwhile, more examples of waste, fraud and abuse at PHAs around the country continue to pop up. According to The Associated Press, at least two PHA executives made more than $600,000 each in 2010.2 It appears the outrage over certain salaries has finally moved HUD into taking action. In the beginning of 2012, Congress imposed a one-year cap of $155,500 on the federal funding that a PHA could use towards executive salaries. This was a good start but I am concerned about a loophole that allows for large bonuses and other compensation that are not covered by the one-year cap.
To further learn how HUD plans to make all 2010 data, along with the upcoming year's data, available to the public, I request the following:
1) When will the executive compensation information of each PHA be posted on the HUD website?
2) How many PHAs have not yet submitted the required HUD form 52725? Please provide a complete list of non-compliant PHAs. What steps are being taken by HUD to enforce this regulation?
3) HUD Form 52725 does not require the PHA to differentiate forms of compensation including such compensation as vehicle and housing allowances, retention bonuses, and deferred compensation -- provided to employees. Instead the PHAs are only required to report a lump sum. Explain how HUD will capture and make transparent all forms of compensation.
4) What, if any, review of the compensation reporting is being conducted by HUD to ensure that the PHAs have provided accurate information?
5) Congress recently included a provision in the FY2012 HUD appropriations bill which limits federal funds from being used to pay housing authority employee salaries that exceed specific limits. How is HUD enforcing this new provision of the law? Has any action taken place due to noncompliance? If yes, please explain the instances.
6) What action is HUD taking to ensure the bonus loophole will be addressed? Does HUD know the total amount of bonuses awarded by PHAs in fiscal year 2010?
7) Will HUD post PHA compensation data collected for upcoming years on its website?
8) Has HUD collected the yearly amount PHAs spend on outside law firms/consulting groups? If not, why not?
2 Jim Kuhnhenn. "Obama administration sets housing agency pay caps." The Associated Press. June 4, 2012. Found at: http://www.washingtonpost.com/politics/congress/obama-administration-sets-limits-on-housing-agency-pay-following-furor-over-high-compensation/2012/06/04/gJQAO17gEVstory.html
The Honorable Shaun Donovan
June 5, 2012
Thank you in advance for your prompt attention to these matters. I would appreciate receiving a response by no later than June 19, 2012. Should you have any questions, please contact Brian Downey or Janet Drew of my staff at (202) 224-5225.
Sincerely,
Charles E. Grassley
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