During a House Financial Services Committee hearing prior to the congressional recess, Rep. Sam Liccardo (D-CA) questioned Stephen Begg, the Acting Inspector General of U.S. Department of Housing and Urban Development, about the firing of the former Inspector General Rae Oliver Davis.
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00:00Chairman Yilts, the gentleman from California, Mr. Liccardo, is now recognized for five minutes.
00:04Thank you, Mr. Chair. Mr. Bragg, thank you for coming to testify today.
00:09The purpose, the function of your office, Office of Inspector General, is
00:13fair to say primarily to help identify waste, fraud, and abuse so they can be rectified
00:20and to ensure the department follows the law in executing its mission. Is that fair?
00:25That's correct. I'd add, too, that we also have a big emphasis on making recommendations to make
00:33programs more efficient and effective. As part of those recommendations, you present
00:37semi-annual reports to Congress, and I think, based on your written testimony, quite a lot of
00:44work had been done over the last year, in fiscal year 24. For example, your work resulted, I say
00:53your work, the work of your office, resulted in almost 87 million dollars in collections,
00:58identifying nearly one billion dollars in funds that could be put to better use. Is that fair?
01:02That's correct. Your investigations resulted in more than 63 million dollars in restitution,
01:11more than 14 million in total recoveries, and in 125 administrative sanctions to remove or limit bad
01:18actors from participation in HUD programs? That's correct. And you had identified 278 HUD actions
01:27that produce systemic benefits for the programs and participants and beneficiaries. Is that fair?
01:32Yes. Well, thank you for all that great work. And that work was done certainly not just by you,
01:38but by others in the office, and of course by your predecessor. I know you're acting, but the
01:42predecessor inspector general is Ray Davis. Is that right? That's correct. Our team at HUD OIG does the work,
01:48not me. And when the executive branch, in this case HUD, does not follow the law,
01:56what typically should happen? What are the remedies for the inspector general's involvement? Well,
02:02it depends on the context. In a scenario where someone's not following the law and violating criminal
02:11provisions, we would work with the Department of Justice to prosecute bad actors. In an instance
02:18where the department might not be following the law, the Payment Information Integrity Act,
02:23that noncompliance results in reporting requirements to Congress. We publicly report
02:29their noncompliance. They're required to work with OMB on corrective actions. So it really depends on the
02:36context. But there is a sanction, there's a consequence. Yes. Now, you became acting inspector general
02:45on January 24th. Is that right? Correct. President Trump became president on January 20th.
02:52Is that fair? Yes. So you took this role four days after President Trump took office
03:00because Ray Davis was fired by President Trump. That's right. Now, federal law requires the
03:07president to follow a process on terminating inspector general. Senator Grassley, as I understand,
03:11a Republican senator authored an amendment that was approved by Congress to mandate that the president
03:18provide Congress 30 days advance notice before terminating inspector general. Is that right?
03:25That's correct. And that that notice would include written in detailed communication about the rationale for
03:31the termination. That's right. Why would there need to be protections in place from the politicization of the
03:40termination of an inspector general? I believe the the genesis of those protections was designed to
03:47protect the independence of offices of inspector general. And that independence is incredibly important
03:53for you to do your job and detect waste, fraud and abuse, identify conflicts of interest and the like?
03:58Absolutely. It's the backbone of what we do. Did the president follow the law in this case?
04:03The the notices were not provided consistent with the law. That's my understanding.
04:11You know, I know Chairman Hill raised a lot of important issues with regard to poor maintenance
04:16at public housing. I think that's been well detailed in the media and I think in every community.
04:20There's been a lot of discussion of that. That maintenance is paid for by a capital fund.
04:26Uh, is that right? Yes. And that is allocated by Congress, that funding. Is that fair? Yes. And I
04:36believe that the 10 months ago, the National Association of Housing Redevelopment officials
04:40increased its estimate of the backlog of repairs needed for existing public housing stock from 70
04:46billion to 90 billion. And its words all due to Congress chronically underfunding the public housing
04:52capital fund. Are you aware of that? I am aware of the report and the figures. And in your view,
05:01is the disrepair and poor maintenance, while undoubtedly there's plenty of waste fraud and abuse
05:05in this agency and any other, uh, is it primarily the result of waste or underfunding?
05:12The need for funding is certainly an important, uh, contributing factor in this scenario. The funding has
05:18not kept pace with, uh, the needs. And so the critical problems that generate long-term physical
05:25condition issues at properties has not been addressed. So you can paint the mold on the wall,
05:30but if you don't. Chairman's time has expired. Thank you.