The Real Deal Miami

$26 billion in HUD funds may have been mismanaged, investigation finds

January 27, 2011 06:10PM

The $26 billion that taxpayers give annually to provide housing for needy Americans may have been poorly spent this year, according to a joint investigation by ABC News and the Center for Public Integrity. The report found that the Department of Housing and Urban Development has struggled to combat theft, corruption and mismanagement in the more than 3,000 public housing agencies it funds nationwide, and particularly inside the 172 that HUD considers the most troubled. They range from an executive in New Orleans convicted of embezzling more than $900,000 to buy a Florida mansion to federal funds wrongly being spent to provide housing for sex offenders. Despite warning signs from within the organization, HUD has continued to supply these troubled agencies with fresh funding, including $218 million in stimulus funds since 2009, the investigation found. But those who are suffering most are poor Americans who rely on federally funded local public housing agencies to provide them with a home. “We’re failing these tenants, we’re failing the taxpayers,” said Kenneth Donohue, who recently retired as the HUD inspector general in charge of rooting out waste, fraud and abuse from the federal housing program. [Center for Public Integrity]