Thanks to what investigators are calling a “pervasive culture of waste and abuse,” millions of dollars from the federal government that were supposed to help struggling Nevada homeowners keep their homes instead went to pay for cars, holiday parties, employee bonuses, employee gifts, employee outings, staff lunches, and a number of other wasteful expenses, a scathing investigation by a federal watchdog found.
According to a new report from the Office of the Special Inspector General for the Troubled Asset Relief Program (also called SIGTARP), the state-designated contractor in charge of Nevada’s portion of the government’s Hardest Hit Fund wasted $8.2 million that was designated pay for the administration costs of the program, all while dramatically cutting the number of struggling homeowners that the program actually helped.
According to Christy Goldsmith Romero, Special Inspector General For The Troubled Asset Relief Program, the Nevada Affordable Housing Assistance Corporation used the program as a “cash cow for every expense imaginable while all but stopping admitting new homeowners.”
Per SIGTARP data, Nevada’s acceptance rate for borrowers into the Hardest Hit Fund program plummeted by 94% from 2013 to 2015, while at the same time, the Nevada Affordable Housing Assistance Corporation used federal money on “wasteful expenses.”
According to the SIGTARP report, the number of homeowners admitted to the program plummeted from 2,111 in 2013 to 541 in 2014 and 117 in 2015.
But at the same time, the NAHAC continued to spend millions of dollars in administrative expenses.
“While Nevada homeowners continue to struggle to recover from the financial crisis, federal dollars designated to help them have been used on holiday parties, luxury office rent, employee gift cards, and other wasteful expenses—even a $500 car allowance for a Mercedes Benz,” Romero said. “That is the textbook definition of waste and abuse.”
“We found a pervasive culture of waste and abuse, coupled with a lack of performance,” Romero continued. “To allow this contractor to remain in this program puts millions of taxpayer dollars at significant risk and is a lost opportunity to give Nevada homeowners a fresh start to receive these funds.”
The SIGTARP investigation found that n 2015 the Nevada state agency kept nearly one TARP dollar for itself for every TARP dollar it provided to a homeowner.
For six months in 2015, NAHAC kept more in TARP money for itself than it distributed to homeowners.