WASHINGTON – Sen. Chuck Grassley of Iowa, chairman of the Senate Judiciary Committee, received a response from the Department of the Treasury following several inquiries into wasteful spending of the Troubled Asset Relief Program’s (TARP) Hardest Hit Fund (HHF), a $9.6 billion program meant to help homeowners who suffered during the housing crisis. In a letter to the Special Inspector General for the TARP program (SIGTARP), the Treasury Department said it determined that only $82,172 of the more than $8 million SIGTARP recommended be recovered “were made in violation of HHF program requirements,” and that “recovery of certain other expenditures was not warranted.” In another letter to SIGTARP, the Treasury Department said it “has taken steps to control administrative spending since the outset of the program.”
Grassley has been conducting oversight of HHF since October, 2016. Grassley has pressed for better management of the program amid reports that the Nevada state agency engaged in “widespread waste and abuse in spending” and “abused the Hardest Hit Fund with, seemingly, a sense of entitlement and no appreciation for the fact that it was taking funds for itself from the homeowners the program intended to help,” according to a 2016 audit. After the Nevada audit, Grassley asked SIGTARP to review the program nationwide for wasteful expenses. An August 2017 audit found $3 million in unnecessary expenses to HHF, including barbecues, gift cards, a new customer center, bonuses, picnics and more. Grassley has also commented on mismanagement of HHF in Georgia.
Grassley made the following comment on Treasury’s response to his latest inquiry.
“Treasury’s explanation of the significant discrepancy between the $8 million that TARP’s watchdog said was misspent and the $82,172 recovered from Nevada HFA is inadequate and unconvincing. Recovering only one percent of misspent funds is unacceptable and does little to demonstrate that future abuses won’t be tolerated. The department says it has taken steps to prevent future mismanagement of taxpayer dollars, but if it’s unwilling to take serious corrective action on past mismanagement, then that declaration is more bark than bite. Preventing abuse of taxpayer dollars starts with fostering a culture of accountability. The department should work to recover the full $11 million the TARP’s Special Inspector General determined was wasted. Treasury should also improve its internal policing mechanisms department-wide to prevent the abuse of taxpayer dollars in the first place.
“It’s unclear whether the Treasury Department’s ongoing internal review covers the reporting process or the wasteful spending itself. Both are lacking and warrant a thorough examination. Every dollar from this program spent inappropriately is a dollar that homeowners in need won’t receive. Taxpayers deserve better. I look forward to receiving the results of Treasury’s review and updated information on steps the department is taking to recoup wasted taxpayer money.”