Building a Solid Foundation: Restoring Trust and Transparency in Public Housing Agencies

Benefits Fraud and Improper PaymentsHouse Financial Services Subcommittee on Oversight and Investigations · February 10, 2026 · 119th Congress
The House Financial Services Subcommittee on Oversight and Investigations held this hearing to examine fraud, mismanagement, and physical-condition failures at public housing agencies (PHAs) nationwide, and to weigh proposals for stronger HUD oversight. Begins at ▶ 0:16:51
Transcript
Highlights

Title

Fraud, mismanagement, and funding gaps at public housing agencies

Purpose

The House Financial Services Subcommittee on Oversight and Investigations held this hearing to examine fraud, mismanagement, and physical-condition failures at public housing agencies (PHAs) nationwide, and to weigh proposals for stronger HUD oversight. Witnesses included the former federal monitor of the New York City Housing Authority (NYCHA), a former HUD deputy assistant secretary, a state deputy attorney general, and a national PHA trade association representative, testifying on corruption cases, chronic underfunding, and regulatory reform. Members split along partisan lines over whether the primary cause of PHA failures is inadequate federal funding and staffing cuts or weak local oversight and accountability. Begins at▶ 0:16:51

Who spoke

• Chairman Meuser▶ 0:17:20: Opened by citing that PHAs manage roughly $40 billion annually serving 9 million Americans▶ 0:17:20, and that combined fraud, improper payment, and failed-inspection estimates could total 25-30% of that funding▶ 0:17:51; noted 32 troubled PHAs received oversight letters the day before the hearing▶ 0:20:50.

• Ranking Member Al Green▶ 0:21:41: Argued the hearing title should reflect trust "lost under the Trump administration," citing over 780 terminated HUD Fair Housing employees and 43% cuts to HUD's field workforce▶ 0:23:23; cited a ProPublica report on a Midwest PHA withdrawing a discrimination settlement after a Trump executive order▶ 0:23:48.

• Bart Schwartz, Guidepost Solutions / former NYCHA federal monitor▶ 0:28:15: Described his team's investigative work leading to 70 indictments at NYCHA involving roughly $15 million in contracts, $2.1 million in bribes, and $2.1 million in fines, questioning what happened to the remaining $11 million▶ 0:30:23; said NYCHA had no code of conduct or annual employee reviews▶ 0:31:34, and reported mold-related repairs cut mold claims by over 50%▶ 0:32:29.

• Chase Haller, Indiana Deputy Attorney General▶ 0:33:30: Detailed persistent problems at Indianapolis's Riley Towers/Luger Tower — hot water, elevator, and security failures — following 59 tenant complaints in 2023▶ 0:34:57; described a 2024 HUD takeover and a subsequent 2025 default on the compliance agreement▶ 0:35:26, plus a case where a building burned down after an owner abandoned Section 8 units in Anderson, Indiana▶ 0:36:44.

• Milan Ozdinec, retired HUD deputy assistant secretary▶ 0:38:40: Explained the HOPE VI program's origins in a 1988 national commission report▶ 0:39:55 and said roughly 25% of the nation's ~887,000 public housing units remain in troubled or near-troubled agencies▶ 0:42:12; said Brooke Amendment rent restrictions are not fully funded, and PHAs are statutorily barred from establishing reserve/sinking funds▶ 1:16:02.

• Eric Oberdorfer, NAHRO▶ 0:43:24: Said HUD's FY2025 improper payment rate drops from 5% to about 1% once inactive SAM.gov registrations are excluded▶ 0:45:41; testified the housing operating fund has historically been funded around 85-90% of need and the voucher administrative fee has not been fully funded since 2003▶ 1:49:57.

• Rep. Emanuel Cleaver (D-MO) — not present; correction, no such speaker appears.

• Rep. Ann Wagner (R-MO)▶ 1:09:04: Cited a 30-year HUD takeover of the East St. Louis Housing Authority due to mismanagement and fraud▶ 0:09:31; questioned Schwartz on procurement vulnerabilities and lack of a HUD-required code of conduct▶ 1:11:50.

• Rep. Sydney Kamlager-Dove / "Miss Williams," Georgia▶ 1:03:33: Cited a 2023 HUD OIG report finding inconsistent field-office oversight of life-threatening deficiencies▶ 1:04:03; raised the Forest Cove Atlanta complex condemnation and Millennia Housing's 5-year HUD debarment▶ 1:06:43.

• Rep. Maxine Waters (D-CA), Ranking Member of full committee▶ 0:53:32: Argued lead and mold problems should have been solved long ago▶ 0:54:58 and called for pre-entry tenant orientation programs and greater use of Section 3 hiring of public housing residents▶ 0:57:05.

• Rep. French Hill (R-AR), Chairman of full committee▶ 0:58:21: Described the Little Rock/Metropolitan Housing Alliance troubled designation with $30 million in missing funds▶ 0:58:52 and pressed witnesses on who bears accountability for the failed Luger Tower RAD conversion▶ 1:01:49.

• Rep. Nikema Williams (D-GA)▶ 1:03:33: (see above, Georgia questions on OIG findings and Forest Cove/Millennia).

• Rep. Erin Houchin / "Mrs. Wagner" — duplicate; see Wagner above.

• Rep. Jimmy Panetta / "Mr. Licardo," California▶ 1:14:22: Questioned Ozdinec on the unfunded Brooke Amendment gap and statutory bar on reserve funds▶ 1:16:02, and on HOPE VI displacement and mixed-income conversions▶ 1:16:59.

• Rep. Rich McCormick / "Mr. Lel," Georgia▶ 1:19:45: Asked about PHA compliance costs and cited a $70 billion physical needs backlog▶ 1:22:08; noted a senior Atlanta Housing Authority executive's arrest for steering Section 8 funds to family▶ 1:24:32.

• Rep. Rashida Tlaib (D-MI)▶ 1:25:00: Criticized proposed HUD work requirements and time limits on housing vouchers, noting 40% of voucher holders already can't find an accepting landlord▶ 1:25:29 and that 19 of roughly 3,000 PHAs that tried time limits later abandoned them▶ 1:26:34.

• Rep. Anna Paulina Luna / "Mr. Herodopoulos," Florida▶ 1:30:09: Asked Schwartz and Ozdinec for their top recommendation to improve PHA oversight; Schwartz emphasized integrity-culture and codes of conduct▶ 1:31:15.

• Rep. Ritchie Torres (D-NY)▶ 1:35:31: Pressed Schwartz on NYCHA's funding crisis, noting a 14% ($100 million) federal funding cut, that NYCHA receives only a fraction of formula funding (as low as 82% since 2001), and detailed NYCHA's aging infrastructure — 755 boilers, over 3,000 elevators, 1,764 roofs, buildings up to 91 years old▶ 1:36:43▶ 1:39:05▶ 1:40:02.

• Rep. Andrew Garbarino (R-NY)▶ 1:40:39: Asked whether NYCHA's problem is fundamentally about funding versus maintenance culture, citing a November boiler explosion that displaced 84 residents despite the issue being known since 2018▶ 1:44:15.

• Rep. Al Green (D-TX), Subcommittee Ranking Member▶ 1:46:00: Noted the FY2026 appropriations bill cuts overall public housing funding by nearly $500 million including a 15% cut to the operating fund▶ 1:46:00, and pressed Oberdorfer on chronic underfunding of the voucher administrative fee.

• Rep. Mike Flood (R-NE), Subcommittee Chairman on Housing and Insurance▶ 1:50:58: Raised rat and bed bug infestations in New York, Atlantic City, Indianapolis, and Omaha▶ 1:51:27; asked about shoddy repairs allegedly used to mislead inspectors at the New Albany Housing Authority▶ 1:52:23; asked about the value of experienced boards and executives at PHAs▶ 1:52:52.

Key moments

• Schwartz testified NYCHA's 70 corruption indictments involved about $15 million in contracts and $2.1 million in bribes, but only $2.1 million in fines were levied — leaving an unexplained gap of roughly $11 million▶ 0:30:23▶ 0:30:54.

• Torres pressed Schwartz on NYCHA's scale versus funding: 755 boilers, over 3,000 elevators, 1,764 roofs, and a 91-year-old building, while NYCHA has received as little as 82% of formula funding since 2001 and faces a 14%/$100 million appropriations cut▶ 1:37:44.

• Hill and Haller detailed the failed RAD conversion at Indianapolis's Luger Tower, where the property could not sustain enough rental cash flow to fund operations, prompting a 2025 default and departure of management/security vendors▶ 0:35:26▶ 1:01:28.

• Oberdorfer said HUD's headline $1.5 billion "improper payment" figure in a $33.9 billion program drops from a 5% rate to about 1% once inactive vendor SAM.gov registrations (not actual fraud) are excluded▶ 0:45:11.

• Green highlighted that the FY2026 appropriations bill cuts overall public housing funding by nearly $500 million, including a 15% cut to the operating fund, calling the underfund-then-cut logic incoherent▶ 1:46:00▶ 1:50:28.

• Hill said $30 million is unaccounted for at the Little Rock housing authority after 11 years of complaints to local, regional, and HUD offices before state prosecution occurred▶ 0:58:52.

• Ozdinec confirmed PHAs are statutorily barred from establishing reserve/sinking funds for capital replacement, unlike private-sector property managers▶ 1:16:02.

• Waters criticized the absence of pre-entry tenant orientation programs across public housing nationwide and underuse of Section 3 resident-hiring requirements, citing Jordan Downs where 50% of redevelopment work went to local residents▶ 0:56:17▶ 0:57:05.

• Flood referenced allegations that the New Albany Housing Authority instructed maintenance staff to perform shoddy fixes to mislead inspectors▶ 1:52:23.

• Schwartz and Torres disputed the framing of the hearing itself: Torres argued Schwartz's testimony risked being used to delegitimize public housing rather than highlight its irreplaceable value amid chronic underfunding▶ 1:35:31.

Metadata

CommitteeHouse Financial Services Subcommittee on Oversight and Investigations
Chamber / CongressHouse · 119th Congress
DateFebruary 10, 2026
TypeHearing
Witnesses
Mr. Bart Schwartz — Co-founder & Chairman, Guidepost Solutions
Mr. Milan Ozdinec — President, Vargas Premier Corporation Consultants
Mr. Eric Oberdorfer — Director, Policy and Legislative Affairs, National Association of Housing and Redevelopment Officials
Mr. Chase Haller — Deputy Attorney General and Section Chief, Homeowners Protection Unit, Office of the Indiana Attorney General
Videoyoutube
Transcript315 caption blocks · 15,576 words · 1:56:46 runtime
EventCongress.gov 118949