Duffy calls for HUD action on tribe's misuse of funds






By DAVE DALEY | Oct. 7, 2016

U.S. Rep. Sean Duffy (R-Wis.) is asking federal housing officials to explain why grants meant to help needy members of the St. Croix Chippewa tribe may not be getting to those most needing that assistance.

In a Sept. 28 letter to the head of the U.S. Department of Housing and Urban Development, the Wausau Republican noted that a Wisconsin Policy Research Institute investigation raised serious questions about how tribal officials were using HUD grants.

The WPRI stories reported that a federal audit of $2.3 million awarded by HUD to the northwestern Wisconsin tribe in 2015 showed more than $776,000 in back rent probably would never be collected and that top officials of the tribe’s Housing Authority were, without proper oversight, loaning themselves monies from a fund designed to help the poorest in the tribe.

Duffy noted that the WPRI stories also reported that the St. Croix Chippewa did not follow proper procedures in how $308,000 in block grant funds were awarded to contractors doing housing work for the tribe.

“These findings raise serious questions about the use of federal taxpayer dollars and whether such funds are getting to the tribal members who deserve and need assistance,” Duffy wrote to HUD Secretary Julian Castro.

The 2015 audit findings were a repeat from the 2014 audit, which found that $444,929 in grant funds that year were awarded to contractors without following HUD rules on selecting and evaluating vendors. That finding was never followed up by HUD officials.

The 2014 audit also recommended tribal housing officials keep minutes to show how they reached their funding decisions and that they receive ethics training. Neither of those recommendations were followed up by HUD officials, and the negative audits appear to have had no impact on whether the tribe received more housing funds the following year.

In his letter, Duffy asked Castro whether HUD officials were aware of the 2014 and 2015 audits and whether HUD contacted the tribe about the audit’s findings and recommendations. Duffy also asked how HUD monitors the disbursement of Indian housing grants and other federal help “to ensure that resources are properly administered, allocated and accounted for by tribes.”

Duffy ended his letter by asking what impact the audit’s findings have had or will have on current or future financial HUD support to the tribe.

The stories on the HUD grants to the St. Croix Chippewa are part of WPRI’s “Federal Grant$tanding” project, a multi-year investigation of the growth in federal grants long used by many D.C. politicians to curry favor with voters.

HUD awards $660 million to 587 tribes each year to help low-income members find affordable housing. Allegations of misuse are common across the nation, and those allegations point to a fundamental and systemic problem: As sovereign nations, the tribes are not subject to the same open government laws as other federal grant recipients — meaning taxpayers and even tribal members are often kept in the dark on how the dollars are used.

WPRI’s stories on HUD funding of Indian tribes in Wisconsin and across the country reported that millions of dollars in housing aid over the years has been mismanaged.

Dozens of poor St. Croix tribal families languish on waiting lists to get into decent HUD housing, and candidates for the five-member Tribal Council that governs the St. Croix Chippewa complain election after election about closed council meetings, closed financial records and the overall lack of transparency in tribal operations.         

Questions raised by WPRI over the 2015 audit of the tribe’s Housing Authority did prompt a separate review of those audit findings by HUD’s Office of Native American Programs (ONAP). That review was completed last June, HUD officials told WPRI, but still has not been publicly released by HUD.

Links to other stories:

Dave Daley, a journalist for 30 years, covered the statehouse in Madison for The Milwaukee Journal and the Milwaukee Journal Sentinel. He is now a reporter for the Wisconsin Policy Research Institute.