Democrats question Miller's independence after role in White House Counsel's Office; Republicans highlight his aggressive oversight of GSA during Bush Administration

On May 5, the Senate Banking Committee held a confirmation hearing for two nominees: Brian D. Miller to be Special Inspector General for Pandemic Recovery at the Treasury Department, and Dana T. Wade to be Assistant HUD Secretary (serving as Federal Housing Administration Commissioner). Miller currently serves in the White House Counsel's Office, and Wade is the acting FHA commissioner. It was the first session the committee has held since the Senate reconvened after recessing for several weeks during the coronavirus outbreak, and most members participated remotely via video links, though some senators were in the hearing room. To offer additional space for social distancing, the hearing was held in Dirksen 106, a change from the Banking Committee's usual home in the smaller Dirksen 538. Materials from the hearing are posted here.

In his opening statement, Chairman Mike Crapo (R-ID), who was in the room wearing a protective mask, called the session a "hybrid hearing" and thanked "those of you who are here today, those appearing before us, and those who are keeping the Capitol complex safe and functioning while we honor our constitutional duty." He noted that Title IV of the CARES Act comes under the Banking Committee's jurisdiction, providing $500 billion in emergency liquidity to eligible businesses, states, cities and Tribes that have suffered losses due to the pandemic. Crapo added that the Federal Reserve and Treasury on April 9 had announced "new and expanded lending programs to provide up to $2.3 trillion in loans" through emergency 13(3) facilities, such as the Main Street Loan programs, which are "crucial components of the strategy to support the economy and promote a U-shaped recovery," and need to be operating and broadly available as soon as possible. "The Special Inspector General for Pandemic Recovery will oversee the reporting and auditing requirements of the law, and it is critical that we quickly confirm the nominee so that important work can begin," he said. Crapo said Miller was highly qualified for the post, "having served as the Inspector General for the General Services Administration for nearly a decade," and that he had been confirmed by a voice vote in 2005. He said that in that position, Miler "led more than 300 auditors, special agents, attorneys and support staff in conducting nationwide audits and investigations; and reported on fraud, waste and abuse. He has been outspoken on the need for inspectors general to have independence and access to information, and I am confident that he will carry out the responsibilities and mission of this position diligently, independently and objectively."

Turning to Wade, Crapo said she was familiar with the task before her because she has served as acting FHA commissioner, and that her experience also includes service as senior advisor to HUD Secretary Ben Carson, deputy staff director to the Senate Banking Committee and Senate Appropriations Committee, and as associate OMB director. "In the wake of COVID-19, we have already seen over 10 percent of FHA borrowers enter mortgage forbearance, FHA-insured healthcare facilities feeling significant strain, and many FHA-assisted landlords struggle to make ends meet while countless renters are unsure where their next rent payment will come from. "

Ranking Member Sherrod Brown (D-OH) attended the hearing remotely via video link, saying he was concerned by Majority Leader Mitch McConnell's (R-KY) "reckless and unwise decision" to call the Senate into session, despite continuing stay-at-home orders in Washington D.C. and elsewhere. He said the decision to convene the Senate is forcing the Capitol's contract workers like cleaning staff and food service workers to take unnecessary risks and go against the advice of public health authorities. "Most of these workers come by bus and subway, placing themselves even more at risk," Brown said. But he praised the committee staff for finding a way to make the hearing work for senators who wanted to attend remotely. Because the CARES Act gives the Treasury Secretary and the head of the Small Business Administration discretion over how to distribute relief funds, Brown said, "We've seen the loans going to large businesses, while small businesses waited and waited." Brown said President Trump's "hostility to inspectors general" is well known, as the president had recently fired the intelligence community's IG, Michael Atkinson; replaced acting Health and Human Services IG Christi Grimm after a report on pandemic preparedness; and removed the Defense Department's acting IG, Glenn Fine, who had been placed in charge of monitoring the CARES Act.

Brian Miller's prepared statement is posted here. Dana Wade's statement is here.

Questions

Chairman Crapo noted criticism that Miller would not be independent as inspector general because of his current position in the White House. Miller said he has believed for years that independence is "vital" for the effective operation of any IG, and noted that during his service as the GSA inspector general, "at every point I had to fight for independence to perform audits and investigations fairly and independently — and I met with resistance throughout my 10-year tenure [there] — including inspections of contractors and others, to the chagrin of people in leadership at GSA — and ultimately I was proven right. My tenure there helped GSA to be a better agency. Oversight is essential for the effective operations of all programs, but especially now with the pandemic recovery. We can't afford to have money diverted to fraudsters who would scheme to take that money out of [recipients'] pockets."

Under questioning from Crapo about her posture toward homeowners and renters who have suffered during the pandemic, Wade said, "We're obviously facing an unprecedented health crisis and it's incredibly important to protect homeowners and renters. This can also be a confusing time for [them], and it's important to provide clarity and certainty from FHA in fulfilling its countercyclical duties." When Crapo asked about problems facing people in senior living facilities that are insured by FHA, Wade said, "No health care facility that FHA serves should be concerned with anything except serving their patients. … This is a time for FHA to provide maximum flexibility. We can allow these facilities to access their reserves so they can appropriately finance operations during this time."

Ranking Member Brown said that a year ago, Wade had served as the supervisor for housing issues at OMB when that agency approved one rule "that would undermine the Fair Housing Act" and another rule "compromising religious freedom to people who seek shelter." While Brown quickly moved on, later in the hearing another senator offered Wade time to respond to Brown's assertion. "Housing discrimination is intolerable, and if confirmed will do everything I can to enforce nation's fair housing laws," Wade said. "On my role at OMB, I led a resource management organization; my job was to make sure taxpayer money was spent efficiently and economically. I am proud of my work at OMB."

Brown said Miller had written an article attacking inspectors general for criticizing the Trump administration, and he reiterated his concerns over the president's recent actions against Grimm and two other IGs. Miller told him that his article had actually defended the independence of inspectors general and that Brown had mischaracterized the piece. "Inspectors general should report the facts as they see them, and not bend to any influence whatever," Miller said. When Brown asked if it was wrong for the president to remove Christi Grimm from her post at HHS, Miller said, "I'm not here to make those assessments. I believe I have demonstrated independence." When Brown asked if Miller would "view your job expansively, to the fullest extent under the law, so you don't just go after little companies and easy targets that won't upset the administration's preferred narrative," Miller said, "Absolutely." Toward the end of the hearing, Brown noted that the Federal Reserve will lend trillions of dollars to businesses under emergency 13(3) programs authorized by the CARES Act, and asked if Miller believed the Special Inspector General's authority extends to the Federal Reserve's lending facilities and to companies that receive those loans. Miller told him, "At this point, looking at the [CARES] Act, it's clear I [would] have jurisdiction over the actions of the Treasury secretary, and I consider every dollar that goes through to the Fed to also give me oversight of the Fed. If I am confirmed and analyze that later to come up with a different view, I may be knocking on your door to get more specific authority."

Richard Shelby (R-AL), who attended the hearing in person but did not wear a protective mask, offered statements in support of both Miller and Wade, whom he noted had served as his deputy staff director when he chaired the committee, and asked no questions.

Jack Reed (D-RI), who attended remotely via video link, said that the behavior of the White House counsel's office during the impeachment confrontation "suggests disregard for the office of inspector general," and that while Miller worked there, "the counsel's office completely dismissed any cooperation by the White House with Congress." Reed noted that Miller had signed a letter in response to Democrats' requests for documents that had said the White House would not offer anything in response, instead deferring to a more fulsome response letter prepared by OMB's counsel. "That suggests you will be beholden to the White House," Reed said. Miller told him that "I will follow the facts where they lead" and said Reed had "unfairly characterized the letter [he wrote] … in many ways I'm just answering the mail." Reed noted that the CARES Act's Title IV authorizes the Treasury secretary to require warrants in exchange for loans, similar to the TARP rescue programs in 2008, adding, "There are ways to write those warrants so that the maximum potential is not realized in terms of strike price." Miller said he needed to study the issue more carefully. "I want to study all the ramifications of these programs to address self-dealing … and I will subpoena that information if I can't get it otherwise."

Reed then asked Wade "where would we be" if Congress had followed the advice of the president's fiscal 2020 and 2021 budget submissions, which would have zeroed out certain public housing funds and community development block grants. Wade said, "This administration has provided unprecedented support to vulnerable populations. … It's incredibly important to focus and do everything we can so that HUD-assisted homeowners and renters remain in their homes. … This is an evolving situation and we're ready to use all the tools at our disposal."

Pat Toomey (R-PA), who attended the hearing in person but did not wear a mask, recounted Miller's standoff with then-GSA Administrator Lurita Doan during the second Bush administration, when Miller conducted "what seems like a very thorough, in fact antagonistic investigation." Miller said, "There were a number of instances where I investigated individuals and companies. At one point I had to investigate the administrator herself; I found that she had steered a contract to a friend. She ended up calling me a 'terrorist' … and members of Congress called for me to be fired. I had to fight for the office's effectiveness through independent hiring — there was a freeze placed on my ability hire anyone; there were budget cuts. But I worked through it all, and I never compromised the facts or the truth." Miller said he later encountered pressure from Obama Administration appointees as well. Toomey then said that as one of two Senate designees to the congressional oversight commission for the pandemic, "We might have similar responsibilities." Miller told him that he wanted to work cooperatively with the commission and the Pandemic Response Accountability Committee (PRAC), a panel of several inspectors general, and that "delineating our responsibilities, so there is not overlap, would be important." Later in the hearing, John Kennedy (R-LA), who attended in person without a mask, also used his questions to recount Miller's investigation of the GSA administrator as a proof of his independence, as did Thom Tillis (R-NC), who attended by video link.

Robert Menendez (D-NJ), who attended remotely via video link, got Wade to commit to "making sure FHA plays a strong countercyclical role in the mortgage market to help finance a home, now that private lenders may be less willing to do so." Turning to Miller, Menendez asked him, "If the president or someone from the White House calls you to discuss the recovery, would you take the call?" Miller said, "I don't think I will receive such a call, but it depends on what the call is about. I will not be pressured to stop an audit or investigation, but I wouldn't be able to answer you without knowing the nature of the call." When Menendez asked if Miller had played any role in the termination of intelligence community IG Michael Atkinson, Miller said, "I read about the firing of Inspector Atkinson in the newspaper. … I don't know the facts or what went into that decision," adding that White House deliberations are confidential.

Mike Rounds (R-SD), who attended remotely via video link, asked Miller how the committee could do its oversight "as quickly as possible in real time." Miller told him Congress "has the opportunity to clarify the [CARES] Act. If we find out things aren't being done well in a particular area, the Senate should be able to change it." Rounds asked if the Special IG's office could set up a "procedure … so that when members of this or other committees want to get in touch with you, it is seamless in nature? So that information we get can be passed down to your team?" Miller said such information-sharing is "vital" and that he could see his office "functioning as a sort of clearinghouse" for information.

Under questions from Jon Tester (D-MT), Miller said the Special Inspector General's Office would initially need 75-100 employees. He told Tester he would inform Congress if he came under pressure from political appointees not to pursue investigations or reviews. When Tester asked about the signing statement attached to the CARES Act — in which President Trump asserted that any reports by the inspector general to Congress about lack of cooperation with the executive branch couldn't be sent without the president's permission — Miller said, "I'm trying to avoid stepping into battles between the executive and legislative branches. … I will report any undue influence on me from whatever source." When Tester asked if Miller had any involvement in the removal of Glenn Fine from the leadership of the "PRAC" panel of IGs, Miller said, "My ability to respond to questions about what goes on in the White House counsel's office may be limited by ethical obligations." He said he would follow the example Elena Kagan set when she was questioned, during her confirmation hearings for the Supreme Court, about activities of the counsel's office where she had served.

Chris Van Hollen (D-MD), as Sen. Reed had earlier, questioned Miller about the letter he had signed in response to Democrats' requests for documents during the impeachment. "The GAO concluded that the administration's withholding of funds to Ukraine was illegal under the Impoundment Control Act, which raises concerns about stonewalling," Van Hollen said. "You personally participated in that, as a lawyer saying the White House would not offer a substantive reply. … If you're confirmed and you wrote to an agency seeking information and they refused to respond, would that be acceptable to you?" Miller said he had simply "stepped in and made sure they got a reply. The letter said the general counsel of OMB had responded to their questions." But Van Hollen questioned whether the OMB's response "met all the requirements to be fully truthful and honest."

After some difficulties with her audio, Elizabeth Warren (D-MA) said the CARES Act "created a $500 billion slush fund for giant corporations. … You would have broad authority to investigate all the money handed out by Treasury and the Fed, and what companies do with the loans and grants." She asked, "How do you plan to use your authority? … If a giant corporation gets a bailout financed by taxpayers, and then lays off or furloughs workers, would this constitute an abuse of bailout funds?" Miller told her he will investigate "any misuse of taxpayer funds." Warren then asked, "If a giant corporation lobbies Congress or the White House and gets a bailout financed by taxpayers, is that waste or abuse? Generally, is that the kind of thing that would trigger an investigation?" Miller said, "Where companies are laying off workers seems like a situation I would investigate. … I will investigate any area that I think is an abuse of these monies." He said it's "possible" that lobbying meets that standard. Finally, Warren asked, "If Treasury doesn't put in restrictions in loan documents, or ask for information about how the money will be used, or restrict lobbying or avoid conflicts of interest, would you request information" from loan recipients?" Miller said, "I will request and subpoena it if I don't get it," and that he would release that information to the public unless it is part of a criminal referral.

Tina Smith (D-MN) said she had heard from constituents who had problems with recovery rebate payments, such as payments going to the wrong bank; payments based on outdated 2018 tax information; and payments to "dead people … just the kind of waste and mismanagement the inspector general should look into — but the IRS tells me that people should just wait until next year, and these issues will be resolved. Do you believe you have jurisdiction over these recovery rebate payments?" Miller told her, "If the CARES Act gives me authority, certainly I would. I would work with the Small Business Administration inspector general and the PRAC accountability committee to see if they're examining how the payments are being misdirected. … The lesson learned from SIGTARP is to form task forces over areas that need to be explored."

———————————————