The Justice Department and the Department of Housing and Urban Development are using mortgage settlements with big banks to steer money toward “left-wing radical groups,” according to Rep. Sean Duffy (R-Wis.), chairman of the House Financial Services Subcommittee on Oversight and Investigations.
“I think it’s pretty clear you won’t find any right-leaning groups in these settlements,” Duffy said Friday on a press call organized by the Cause of Action Institute, a Washington-based government watchdog group. “It’s become clear to us that as this deal was structured there was a keen eye to make sure conservative groups could not access any money through these settlements.”
Duffy, whose subcommittee held a hearing yesterday to examine whether the DOJ and HUD has sidestepped the congressional appropriations process with how it allocates funds from bank settlements stemming from faulty mortgages that contributed to the financial crisis of 2008, said the settlements have benefited groups such as the National Council of La Raza, the nation’s largest Latino organization, and NeighborWorks America, a nonprofit housing and development organization.
“Not all of these third-party groups are activists,” he said, adding that “others are left-wing radical groups.”
He described the allocation of funds to those groups, instead of more money directly to mortgage crisis victims and to the U.S. Treasury, as “political cronyism” and possibly “corruption.” Duffy said his subcommittee will continue to press for documents from both DOJ and HUD regarding communications leading up to the settlements.
Last month, the Justice Department announced a $1.2 billion settlement with Wells Fargo & Co. over the bank’s alleged improper mortgage lending practices. The department said such settlements have contributed more than $4 billion to the Federal Housing Agency fund and to the Treasury.