Toomey Presses Taxpayer-backed Housing Group on Weak Oversight
NeighborWorks’ Board Chairs Include FDIC Holdover Marty Gruenberg and Fed Nominee Sarah Bloom Raskin
Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) is raising concerns over the Neighborhood Reinvestment Corporation’s (NeighborWorks) lack of oversight.
“The Government Accountability Office (GAO) found NeighborWorks’ oversight of grant management processes were deficient and staff approved procurement contracts to former employees without additional justification,” Ranking Member Toomey wrote. “Yet, NeighborWorks continued to suffer mismanagement challenges and inappropriately awarded sole-source contracts many years later.”
As Bloomberg reported in 2015, NeighborWorks has long been plagued by scandal, including “sweetheart contracts, document fudging and unexplained departures of top officials.” Despite its long history of corruption and mismanagement, the Democrats’ March “COVID-19 relief” bill doled out $100 million in taxpayer dollars to NeighborWorks.
Federal Deposit Insurance Corporation (FDIC) Director Marty Gruenberg—whose term at the FDIC expired three years ago—currently serves as Chair of NeighborWorks’ board. Sarah Bloom Raskin, President Biden’s nominee for Vice Chair for Supervision at the Federal Reserve, served as Chair of NeighborWorks’ board from 2012-2014.
Ranking Member Toomey requested NeighborWorks turn over a number of documents no later than January 31, 2022.
Read the full letter here or below.
January 27, 2022
President and CEO
Neighborhood Reinvestment Corporation
999 North Capitol Street NE
Washington, DC 20002
Dear Ms. Rodriquez:
I write to raise concerns of troubling reports finding a lack of oversight at the Neighborhood Reinvestment Corporation (NeighborWorks). The Government Accountability Office (GAO) found NeighborWorks’ oversight of grant management processes were deficient and staff approved procurement contracts to former employees without additional justification. Yet, NeighborWorks continued to suffer mismanagement challenges and inappropriately awarded sole-source contracts many years later.
I am interested in better understanding what steps were taken to correct those management errors, and what ongoing oversight efforts are within the remit of the Board of Directors to ensure proper governance at NeighborWorks on a continuing basis. I respectfully request that you provide my staff with the following documentation:
1. The meeting minutes of the Board of Directors from November 1, 2012 through the present (please prioritize the production of meeting minutes during the chairmanships of Chair Sarah Bloom Raskin (November 1, 2012 – March 31, 2014) and Chair Martin Gruenberg (June 1, 2019 to the present));
2. A list of sole-source contracts, including but not limited to modifications and renewals, that were awarded or otherwise approved while Mr. Gruenberg or Ms. Raskin served on the Board of Directors;
3. Fiscal Years 2010 through 2013 external audits;
4. The Audit Review of the Non-Network Memorandum of Understanding/Grant Award Process, dated April 3, 2013; and
5. All reports presented to the Audit Committee, including but not limited to by the Chief Audit Executive, from November 1, 2012 through March 31, 2014 and June 1, 2019 through the present.
Please provide these materials no later than January 31, 2022. Should you have any questions about this request, please contact Nicole Christus on my staff at (202) 224-7391.
Thank you for your attention to this matter.
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