State housing agencies across the country have charged $3 million in unnecessary expenses to a fund meant to aid homeowners impacted by housing insecurity.
Instead of helping struggling homeowners, money from the Troubled Asset Relief Program’s (TARP) Hardest Hit Fund went to pay for employee bonuses, legal expenses, car allowances – and even barbecues, according to Christy Goldsmith Romero, special inspector general for the Troubled Asset Relief Program (SIGTARP). In one case, a state agency spent more than a million dollars of HHF funds on a new “customer center.”
“Congress did not authorize TARP dollars for barbecues, steak-and-seafood dinners, gift cards, flowers, gym memberships, employee bonuses, litigation, celebrations, cars, and other unnecessary expenses of state housing agencies, but those are some of the charges SIGTARP’s forensic analysis uncovered,” Romero said.
Romero said that SIGTARP had recently found “scores of people” who qualified for Hardest Hit Fund assistance but were turned down.
“Now we find that some state housing agencies are more willing to keep TARP dollars for themselves than distribute it to low-earning homeowners, a violation of TARP contracts and inconsistent with TARP law,” Romero said. “With more than $1 billion to be spent on HHF administrative expenses, the mindset must change at state agencies and Treasury. Otherwise taxpayers will continue to pay more for these services than is necessary.”
According to SIGTARP, unnecessary spending by state agencies included:
- North Carolina Housing Finance Agency: $107,578 for barbecues with Treasury employees, parties, celebrations, gift cards, gym memberships, employee bonuses and more.
- Rhode Island Housing: $1,031,210 to build a new “customer center” with a new kitchen and new furniture, marketing ,systems and rent – including three years of backdated rent – and a monthly payment to employees to defray transportation costs.
- Nevada Housing Division: $43,497 for bonuses – nearly all of which went to a CEO who was eventually fired – and employee picnics.
- Florida Housing Finance Corporation: $106,774 for bonuses, gift certificates and a barbecue.
- District of Columbia’s Housing Finance Agency: $258,333 to prepay for five years of “avoidable” online storage access.
- Illinois Housing Development Authority: $98,305 in employee cash retention awards. HHF money was also spent for a lunch “to celebrate getting new HHF funds and an employee’s upcoming wedding.”
SIGTARP is demanding that the state agencies that misused HHF funds pay the program back.
“TARP is not a source to fund state agencies’ general operations, boost state employees’ morale, or throw catered barbecues when Treasury visits,” Romero said. “TARP is not a windfall.”