Representatives of military housing contractors testify at a hearing of the House Armed Services Committee’s readiness subcommittee on whether conditions are improving for military families living in privatized housing, December 5, 2019.
Transcript
He’ll be along shortly. Mr. Scott will stand in for him, and we’ll pick up Mr. Lynn. You can either.
[Man] I’ll read a statement.
You’ll read a statement, very good. Before we get started, I request unanimous consent that a member of the full committee be allowed to join us, Mr. Brown, who is behind me, and participate in the questions. And there’s a formal way. I ask unanimous consent that a non-subcommittee member be allowed to participate in today’s hearing after all the subcommittee members have had an opportunity to ask questions. Is there objection? There being none, the non-subcommittee member is recognized at an appropriate time for a five-minute question. Okay, with that committee will come to order. Ladies and gentlemen, I call the committee to order, the Readiness Subcommittee of the Armed Services Committee. Since February of this year, this subcommittee has been conducting extensive oversight of the privatized military housing program. We first heard about the systemic failures in the privatized military family housing program from a panel of courageous military spouses who provided graphic and disturbing testimony about lead, mold exposure, rodent infestations, rude and dismissive house management, and ineffective oversight of the program by the services. Then we heard from the assistant military service secretaries on their efforts to address the failures of oversight that led to the privatized military housing crisis and the plans of the services to continue to make improvements. Today we will hear from five of the private military housing partners for their perspective, and importantly, their plans for bringing family housing back to the level our military families deserve. I also want to make one thing clear. While we do not have all of the privatized military housing partners present today, that in no way means that those who are not here are off the hook. We’re watching them. We expect them to do right by the military families that they provide services to. Our oversight of this issue will continue. And we’re watching not only those five that are here, but those who are not. I’ve heard troubling reports about The Michaels Organization, Michaels Organization, Clark Realty Capital. I’m particularly concerned by reports about the abusive use of non-disclosure agreements. For all of the housing partners whether you are here today or not, I’m putting all of you on notice that this committee will be watching and we will not tolerate in any way the abusive and problems that we have seen. It’s deeply troubling that I’m still, after these months, getting reports that certain partners continue to show a blatant disregard for the seriousness of the issues facing our military families, and frankly, a lack of respect for our service members and their families. They deserve better. While it’s clear that the private partners and military services have been working to improve conditions and processes since we first heard from the families in February, this committee and many of our members still hear from concerned military families who continue to struggle with getting quality resolution of the maintenance concerns and some of the unprofessional property management staff. There is work yet to be done, and we will continue to follow up on these issues until they are resolved to the satisfaction of the military families and this committee. One of the themes that has permeated our discussions about privatized family housing, is the issue of ineffective management, particularly at the installation level. The symptoms of this problem have taken many forms including disrespectful customer service personnel, inexperienced maintenance teams performing low-quality maintenance, and negative consequences resulting from wrong contract performance incentives. We’ve heard about the Department of Defense initiatives to address these issues, but because day-to-day management is within the purview of the private partner, I’m interested in hearing what you have to say about what you are doing to change the culture at the installation level. As military services have recommitted to their oversight role, they are working to improve their processes and refine the metrics that we use to measure the performance of each housing project. I’m looking forward to hearing from our witnesses today with the degree to which they are cooperating with these initiatives and the steps that they are taking to ensure that the housing enterprise is as transparent as possible. Counterproductive practices such as closing maintenance work orders before the problems are resolved in order to artificially bolster closure statistics or asking tenants to sign non-disclosure agreements as a matter of routine when they move out of a unit, are simply not acceptable. All of you have had enough time to assess and scrutinize the problems, and as we move into 2020, the focus now must be on action. Not only must corrective policies and processes be instituted across the enterprise, but you must develop mechanisms to ensure that the sustainment of positive change and the sharing of best practices to ensure our families receive high-quality housing regardless of where they live. We ask our service members and their families to sacrifice enough in service to their country. We will not accept substandard housing as well. These families deserve better, and this committee will demand that they get the best. Mr. Lamborn, thank you so very much for joining us. I’ve explained that you were in a committee markup casting votes. I’m sure they are all to my satisfaction. (Doug laughs) Mr. Lamborn, please—
You’ll be just as satisfied as you will be with my votes here.
[John G.] Thank you.
Thank you for having this hearing. Thank you all for being here as witnesses. Thank you for everyone in the audience showing your concern. Today we will hear testimony from five of the companies that make the privatized military family housing model work. As someone whose district has almost 48,000 military members, and like the chairman, I have been, I am also been deeply troubled by the lack of oversight of this program, and our military families deserve better. Our committee has heard significant concerns about insufficient mold remediation and terrible customer service at numerous military installations, most recently at MacDill Air Force Base, Florida and Fort Belvoir. We’re not going to address them today, but there’s also been allegations of fraud in a few extreme cases. According to a survey released earlier this year by the Military Family Advisory Network, 63% of Fort Carson respondents who live in my district said their units needed better maintenance, repairs, or remediation. The committee has heard horror stories about mold, rat infestations, and what could generously be described as poor customer service. The Military Housing Privatization Initiative began as Private, excuse me, Public Private Ventures or PPVs in 1996 as means to modernize family housing, improve efficiency, and grow reserve accounts for future investments. Oversight of the program is challenging because each military department manages their programs differently, and the respective projects are governed by unique legal agreements. The Army has a total of 35 projects, the Navy and Marine Corps have 15, and the Air Force has 32. Oversight is further complicated for Army and Navy projects because they are partners with the developers in limited liability companies with both sides investing capital. My sincere hope is that the attention the military family housing has received over the last year has served as a wake-up call to both the military departments and to the housing partners. We need this model to work, but not at the expense of military families. Every dollar wasted through mismanagement or incompetence diminishes the long-term viability of the reserve accounts that are vital for future recapitalization. The House and Senate both passed significant bipartisan legislation in their defense bills this year, and I look forward to enacting meaningful reform. First and foremost, among these will be a tenants’ bill of rights. The military departments have an inherent responsibility to provide oversight for these projects. A recent Air Force IG report found, quote: A pervasive misperception that when housing was privatized, it was effectively outsourced. Leaders at many levels did not actively engage as they might have on other issues based upon misunderstanding of their authority, unquote. We’ve heard from Army families that some installation commanders characterized the government as the weaker or 49% partner in these housing agreements, implying that they have limited means to address shortcomings. Oversight is inherently governmental and it is not optional. On some installations there is confusion regarding the identity of the installation housing office and the office of the housing partner or third-party management company. It should be crystal clear to a family whether they are speaking to someone representing the installation commander or to a representative of the housing partner. And we must simultaneously reform while preserving the financial footing of the privatized housing projects. A 2018 GAO report highlighted and found that the military departments vary in the extent to which they use major future sustainment needs and funding to assist project sustainability. I am beginning to question the wisdom of the fiscal waterfall and why the recapitalization accounts are only paid after BPV management partners and bondholders are paid. So I look forward to hearing more from our witnesses about their perspectives on the program overall, the actions they have taken to address any health and safety concerns, and to improve customer service. We would also appreciate their thoughts on improving the overall program going forward. Thank you, Mr. Chairman, and I yield back.
Thank you, Mr. Lamborn. It’s been good to work with you on this problem, and I know that we will continue to do so. And I like to welcome our witnesses, Mr. John Picerne, CEO of Corvias Group LLC, Mr. John Ehle, president of Hunt Military Communities, Mr. Denis Hickey, CEO of Lendlease America, Mr. Rick Taylor, president, facility operations, renovations, construction for Balfour Beatty Communities, Mr. Jarl Bliss, president of Lincoln Family Housing. Gentlemen, your formal testimony will be put into the hearing record. In the interest of time which we are unfortunately limited today because votes will occur some time after two. Perhaps, hopefully as late as 2:30. I’d ask you to limit your testimony and summarize to three minutes. So let’s start with Mr. Picerne. My apologies for the pronunciation.
Perfect. Thank you, Mr. Chairman, ranking member Lamborn, members of the committee, thank you for the opportunity to appear before you today. My name is John Picerne and I am the founder and CEO of Corvias. I’m here on behalf of 950 dedicated team members who support our service members and their families. Many of our employees are veterans or spouses of active duty military members. These talented people are generally committed to supporting those who protect and defend our nation. It’s my honor to serve in this capacity. When I was first introduced to the massive challenge facing the Department of Defense with its struggling housing program, I was moved by how poorly we as a nation were caring for our military personnel in what was the most personal way of all, their homes. The DoD was committed to creating a real long-term solution, and with our experience I believed we were well-suited to help. When I founded our company some 20 years ago, we set out to create something that could fix the housing challenges that were facing our military, and after 9/11, a very important job became a vocation. When I was last on the Hill in February, I said I was sorry in no uncertain terms. I apologized for the issues some of the residents were dealing with. I said we would do whatever it takes to do right by all of our residents. Today I want to tell you a few of the things that we have done since I apologized nearly 10 months ago. Since early in 2019, we have been making changes in a concerted effort to get back to the gold standard. Gold standard of resident service will be known when we have deployed service members who are able to speak to their families about their daily lives, what’s happening at school, and not about problems they’re experiencing within their housing. We will know that we’ve achieved the gold standard when our residents talk about Corvias and the things that they are doing at resident events, strong sense of community, and a team that has helped create a better living environment. With that goal in mind, we added neighborhood staff to work directly with families. We moved our resident service call centers back onto the installations so that our residents talk to somebody right down the street as opposed to a central call station. We launched the Corvias resident portal so that residents can use their smartphone or laptop to place service calls, track progress, and let us know if we’ve gotten the job done right. We established the role of resident advocate to work as an ombudsman for those families with more challenging issues. From the early days of the MHPI program it was well understood that to give our service members the homes they deserve, the program needed to operate in a consistent state of development, construction, and financing. Solving the housing challenges has always been based on a regular investment in homes, building new homes or maintaining homes, both new and old. An investment in these homes is an investment in the service member. That’s why we have injected new money into the program, $325 million of private capital in 2019 with another $150 million prepared for 2020. We’re also putting close to $200 million to work from our partnership reserves, $675 million all together at no cost to the government. These investments will be used to replace or completely upgrade some of the most challenging homes we maintain. More than 16,000 homes we brought up to higher energy standards like new heating, air conditioning systems that give residents a better home experience while saving the program nearly $300 million over the course of the next 30 years. As someone who’s been in the program for nearly 20 years, I can say from personal experience that the homes that we inherited were in terrible shape, in many cases uninhabitable. Through the MHPI program, we were able to upgrade or replace thousands of older homes in the early years. However, to date, 46% of our homes in our military portfolio were built before 1980 and some as old as 1870. As we look into the future, there’s a lot to be encouraged about and some real challenges as well, the priorities to deliver gold standard resident service, service older homes that cost more each year to maintain, and drive constant investment in new homes and renovations. Corvias will continue to work tirelessly for our families. We will keep innovating finding new answers to give service members the homes and resident experience they deserve. We are proud to serve our military women and men as we believe there is no higher calling in our industry. I thank you for this time and look forward to your questions and dialogue.
Thank you, Mr. Ehle.
Chairman Garamendi, ranking member Lamborn, and distinguished members of the subcommittee, good afternoon. My name is John Ehle. I am president of Hunt Military Communities. Thank you for the opportunity to be here. At Hunt we are entrusted to build quality communities for America’s heroes. We take that responsibility very seriously. During the Senate hearing in February, it became obvious to us that there were families living in our homes whose voices were not being heard. We lost their trust, we’re sorry, and we want to get it right. We have heard our residents loud and clear, and we are singularly focused on rebuilding their trust in us and improving their living experience. Over the past year we have been working diligently on that front. First, we recognized that quality homes and resident service depends on open and regular communication with our residents. We need to hear from all of our military families in order to address their issues. We have made a number of improvements to make it easier for our residents to communicate with us. In addition, we understand that maintenance is a critical part of providing quality homes, and early this year it became clear to us that we had substantial room for improvement. While maintenance issues will inevitably arise, it is our goal to provide professional, transparent, and timely service. In the last year we have enhanced maintenance processes, added key positions, and improved training. Finally, we are actively supporting reforms to ensure the long-term success of the MHPI program. We are by no means perfect, and there have been times when our performance has fallen short of our residents’ expectations. We are committed to taking the necessary actions to rebuild the trust between Hunt and our residents. We have made progress over the past year, but our work is far from done. Thank you for the opportunity to testify today. I look forward to hearing your questions, hearing your thoughts and answering any questions.
Thank you, Mr. Hickey.
Chairmain Garamendi, ranking member Lamborn, and distinguished members of the subcommittee, my name is Dennis Hickey. I am chief executive of Lendlease America. Lendlease is a proud partner of the Department of Defense.
[Garamendi] Pull the microphone up closer.
Sorry. Lendlease is a proud partner of the Department of Defense, and we have the privilege of overseeing 40,000 homes that contain over 130,000 people who call Lendlease communities home. Mr. Chairman, the issues being discussed here today are critical for both Lendlease and for me personally. No family, much less a military family, should be subjected to living in substandard housing conditions, and I reiterate our apology for any *** that we have caused in this instance. At Lendlease we are proud of the work we do to take care of our military families, however, we realize we have more work to do, and we must continually improve. As an example, Lendlease process over 400,000 service orders per year. Last month we processed approximately 25,000 service orders across our homes. Pleasingly, 97% of these orders were successfully completed on time and function. We think this is a good result, and we’re proud of that. However, it does mean that 3% of those orders were not effectively processed on time, and that is the big issue. So Mr. Chairmain, members of the committee, that 3% is my central focus. What can we do to get that number down? How can we take care of these families more quickly and more effectively than we currently are? In order to improve our performance, we have recently taken the following steps. Firstly, we significantly increased our focus on customer service. We’ve added new staff, new suppliers, new contractors, and instituted new training modules to train our staff. For example, we’ve instituted a maintenance academy to train all of our maintenance people. Secondly, we’ve introduced new resident smartphone app. This contains a volume of information easily accessible to residents including the ability for them to initiate and track service requests. The use of this app has doubled in the last six months across our communities. Thirdly, we’ve introduced new mold inhibiting protocols. These include new mold painting techniques, enhanced filter protections, new ventilation systems, and other initiatives. Fourthly, we continue to invest in digital technology to improve all aspects of our business. This includes modules that improve customer service, greater data analytics, and the adoption of digital twin technology that better uses predictive maintenance technology across new homes being built. Finally, Mr. Chairman, I’m particularly proud of the work that we have done in establishing the resident advisory boards on our communities. Our objective is to create an open and transparent environment where residents work collaboratively with us in order to create an active and engaged community. We look to other sectors for inspiration and identify the school and PTA model as the benchmark. We all know that when you see a strong PTA, you see a strong school. Similarly, our resident advisory boards are designed to allow residents to regularly engage with both Lendlease and the local command to work together to ensure housing issues and quality of life concerns are addressed and best practice is shared. Our goal is to have one neighborhood representative for every 400 homes, and these representatives who become members of the resident advisory board. In addition, Lendlease project director and garrison representative are members of this board. We believe this initiative is already having great impact, and this is evidenced by the correspondence I received last night from the Safe Military Housing Initiative which was founded by some of those military spouses who appeared before the Senate Committee earlier this year who asked me to read this statement on their behalf today. Quote: Lendlease and their team have embraced some of the toughest critics by sitting down and building a relationship with them. These relationships have benefited the project companies and the residents on a micro and macro level. Lendlease is leveraging their best staff to help build best practice and better serve our military families. By closing gaps and changing cultures at the local and corporate levels, Lendlease has been able to build effective relationships with their staff, government officers, project companies, family advocates, and most importantly, the residents to improve program work and its efficacy. Mr. Chairman, we appreciate the work this community has done to find sensible solutions to improve the quality of private military housing, and we remain committed to being part of the solution. I look forward to your questions.
Thank you, Mr. Taylor.
Good afternoon, Chairman Garamendi, ranking member Lamborne, distinguished members of the subcommittee. My name is Rick Taylor, president, facility operations, renovations and construction for Balfour Beatty Communities. And I appreciate the opportunity to testify before you today. We take the responsibility of serving those who serve our country very seriously. We have heard your concerns and those of our residents loud and clear. And on behalf of Balfour Beatty Communities, I’d like to apologize for having short of the high standards our military families deserve. We are working hard to regain the trust and confidence of our residents and our military partners. This has truly been a humbling experience. We have learned a lot, and we realized we needed to transform many of the ways in which we do business in order to improve our residents’ daily living experiences. That transformation is under way today, and I would like to highlight just three of our transformation efforts with you now. First, we have reorganized. This includes my appointment as president for facility operations, renovations and construction. This means there is now a president in charge of and responsible for all military housing maintenance activities. The reorganization puts me at the table with our most senior leaders in the company to ensure the highest levels of oversight and a keen focus on maintenance issues and resident support services. As a former Navy Civil Engineer Corps officer, I am especially sensitive to the types of challenges and concerns, and I am fully committed to providing solutions. Additionally, we are appointing a senior executive to the role of transformation director, another completely new position. This individual will be responsible for ensuring that an effective change management program is in place across our entire military housing portfolio. Second, we are transforming our approach to maintenance and customer service. We have delivered live mandatory code of conduct training to our employees to underscore the importance of business integrity and ethics. We have also delivered enhanced customer service training to our employees to reemphasize our commitment to best practices and high standards. We recently appointed a new vice president of training, and we have added 130 professionals to our military housing staff. And we are empowering our residents with more transparency and control over their work order requests. Third, we are improving our mandatory environmental training for all facilities management employees, have increased monitoring of all homes for life, health, and safety, and particularly mold and moisture issues. We have supplemented our local teams with additional third-party specialists, teamed with a national HVAC servicing and maintenance company, and have hired regional environmental specialists to advise our local teams, monitor environmental processes and projects, and manage that communication with our residents. I also want to make myself clear on a particularly sensitive issue for us. Balfour Beatty Communities takes the issue of fraud very seriously, including the allegations that certain members of our staff handled work orders inappropriately. We are already cooperating with the Department of Justice with respect to its own civil investigation into these allegations. Simultaneously, we have instructed our external council Hunton Andrews Kurth to lead an investigation across our entire military housing portfolio. Hunton, in turn, has engaged PricewaterhouseCoopers, a leading forensic accounting firm, to undertake an extensive review of the work order system used to support our submission to request incentive use. To summarize, over the last nine months, we have made efforts to transform and strengthen our management structure to increase staffing in a strategic, focused, and smart way to address our customers’ concerns. Going forward, I remain encouraged and 100% committed to the success of the MHPI program. I want to thank members of Congress and your staff for reforms you are undertaking in the FY 20 NDAA. We support many of the MHPI provisions offered in the House and Senate versions, reforms that I believe will strengthen the program. For example, we wholeheartedly support the creation of a resident bill of rights, a common lease, a uniform mold policy, a uniform resident displacement policy, and standardized incentive fee metrics. These are responsible and thoughtful reforms that will focus everybody, the Department of Defense, military providers, our residents on standards and agreed upon processes. The reforms will minimize ambiguity, enforce oversight, clarify responsibilities, and allow everybody’s voice to be heard. I support these efforts, and I believe the MHPI program will be improved because of them. Our customers deserve the very best, and we are determined to deliver for them. Thank you for your time, and I look forward to your questions.
Thank you, Mr. Bliss.
Chairman Garamendi, ranking member Lamborn, and members of the subcommittee, on behalf of Lincoln Military Housing, thank you for the opportunity to testify before your subcommittee today. My name is Jarl Bliss, and I’m the president of LMH. Our company welcomes this subcommittee’s oversight of the Military Housing Privatization Initiative. We hope you share our view that despite recent setbacks, the MHPI is a valuable program that has improved the quality of military housing over the DoD managed housing of the last century. We also welcome your oversight of LMH’s ability to deliver the high-quality housing and property management services our nation’s heroes deserve. Over the past year, our company has listened carefully to the concerns some families have expressed about the quality of their LMH housing. More than 1,200 LMH employees, many of whom are veterans, military spouses, or have members serving in the military, wake up everyday to serve our families with honor and integrity. But it’s obvious that some of our families feel we have come up short. As the president of the organization, I apologize to our military families for the times we have failed to live up to expectations. Beginning in 2017 working with military families and advocacy organizations, LMH undertook a holistic review of our policies and procedures to explore how we could improve. We identified, developed, and implemented several reforms to address two main goals. The first was to improve the quality of our homes and services. The second goal was to make reforms that reestablish a culture of trust, transparency, and dialogue with our residents. I’m pleased that as I sit here today, many of those reforms have been implemented. Let me list a few of these for you. First, we have worked with a military family organization to identify and place advocates in over a dozen of our communities with more in the pipeline. These advocates seek to identify issues before they become problems and try to work with families and Lincoln to resolve them. Second, our on the ground property managers and personnel have set a goal of proactively knocking on residents’ doors even when there is no work order pending just to check in with the resident and ask if there are any issues with the home that we need to address. In addition to addressing issues with the home, this reform also helps reestablish a culture of trust and dialogue with the families. Third, we have been responsive to requests from residents from approved access to communication tools. We have significantly improved our mobile phone app that enables residents to submit and track work orders. We still maintain our call center in San Diego for those who prefer to call in work orders. And fourth, we have worked with our service branch partners to get public health and medical experts involved in cases involving environmental hazards more quickly. Navy and Army have given us access to doctors and specialists who help both us and our families understand when a family should be moved while remediation is performed. These are just a few of the reforms we have undertaken. We are in the process of making further reforms, many of which we believe are consistent with several provisions in the HASC and SASC marks of the NDAA. As your subcommittees look at how LMH and other PPVs are performing, I look forward to working with you and our DoD partners to explore new and creative ways to improve our military families’ experience in our housing. We understand that the issues are not just about fixing drywall but repairing a culture of trust with our residents, a culture that recognizes the dignity of their service to our nation. I look forward to your questions and more importantly, to working with you to address the concerns of military families.
For the committee members and our guests, we are scheduled votes probably about 15 minutes from now. So I’m gonna pass on my questions and turn to Mr. Lamborn and then take as many of our colleagues as possible. Mr. Lamborn.
Thank you, Mr. Chairman, and for having this hearing. Thank you all for being here. My first question or two, I just want to go down the line and have a yes or no answer for the sake of time. From your perspective, do your companies have a 51% controlling position in the privatized military housing agreements? Sir, if we could start and go down the.
[John P.] The answer is no, representative.
The answer varies from property to property.
[Doug] Okay.
It’s not as simple as yes or no.
[Doug] Okay.
Also structure may look like that, it doesn’t operate like that.
No, sir, we do not.
As Mr. Hickey said, the structure may say that, but the operating agreements don’t call for that sort of control.
Okay, thank you. And do you agree that the government and the military has a legitimate oversight responsibility for the PPV initiatives?
[John P.] Absolutely, yes sir.
Yes.
Yes.
Yes, sir.
Yes, sir.
Okay, thank you. I’m sure there’s some great questions about specific remediation progress or lack of progress that you’re making, but let me jump into the financial side of things. Should Congress intercede and require that we restructure the waterfall agreements so that the result would be that reinvestment accounts have to be fully paid up before everyone else gets paid? That’s something that would be a radical departure, but it’s the kind of reform that we may have to look at. Any thoughts on that that you’d like to offer?
Sir, representative, I think that as the program is currently structured, it was set up and is set up so that we can continue to advance investments and have continuous investments if allowed to do so. Working with our DoD partners and with support from Congress, I think we can get there without having to go through tremendously radical changes. I do believe though that an adjustment in the waterfall to make sure that investment is consistent, would be of benefit.
Any other thoughts or comments? Thank you. Mr. Taylor.
Congressman, I think certainly it’s worthwhile to consider everything’s on, should be on the table for consideration, but I’d say that we have lending agreements that would have to be maintained such that service is paid where it’s currently prescribed in the waterfall. So that being said, if we didn’t disrupt that then I think that we should certainly be having that conversation about figuring out a better way to ensure long-term sustainability.
Okay. Any last thoughts on that? And then I’ll switch to another question.
No, I support, congressman, I support that position. I think at the end of the day the objective is to make sure there is sufficient capital in the reserve account to undertake out a year development. There are a variety of solutions to do that. I think the interests of bondholders and debtholders need to be factored in mind, and so therefore it to be a complex arrangement to undertake.
Okay, and lastly for the sake of time, I’ll finish with this. Could someone comment on what we could do here in Congress to make your job easier so that the finances work better so that the investments can be made to keep properties as high-quality condition as possible? So is there something, anything like with the scoring that OMB calls for that we should reexamine?
Mr. Representative, I think that if we went back to the premise on the program or the beginning of the program was based on what was known as the Raines Memo from OMB that was rescinded over time. So we start out with the right program and the right investment philosophy and the right investment thesis but then change the game midstream. So if we just went back to that original scoring methodology, that would continue to allow us to add additional, which was always the premise, additional funding sources on a going forward basis. So if we kinda went back to the original rules, I think we would be able to solve many of the investment challenges.
Anyone else on that?
Congressman, I agree with that. I think the scoring process could be reviewed. I think at the end of the day, looking for additional sources of funding is proactive if we can do that across the structures. Also think the other issue that is around the BAH process, and I think that process is set annually and when it goes up or down regarding where it sits within relative, outside the base accommodation, I think probably the optics about how that is determined is something that is very vital because that is the revenue source of the bases in its entirety. Maybe some transparency around the optics of how the BOH is calculated would be beneficial.
Okay, I wanna thank you. Mr. Bliss, did you wanna finish?
Yes, sir, I just wanted to add. I also would say anything Congress could do to create flexibility on financing that we could use private sector tools without having scoring issues, I agree with Mr. Picerne on that.
Okay, thank you for your input. Mr. Chairman, I yield back.
Thank you, Mr. Lamborn. Presuming that votes will begin shortly, we are told that we are expected to be off the floor and back here around 2:30. So we’ll break and then, without objection, we’ll break and then return. Ms. Horn, you’re next.
Thank you, Mr. Chairman and I wanna thank this entire committee for the work that we’ve done on this incredibly critical issue in a bipartisan way. And I think the beginning of the work that we’ve done in the NDAA for this year is critically important. But I want to dig in a little bit more to the issues that we’re talking about and what this means for our military families, because the first time I heard about these issues was at a town hall in January. And a mother showed up and brought pictures of the housing that they were living in. They told me about the conditions and the health impacts that their families at Tinker Air Force Base which, Mr. Taylor, is a Balfour Beatty property. I was angry and frustrated and hoping it was a limited problem but sadly found out that it was not, and this is why we’re here today. Because the issues that have already been laid out, the infestations are rampant across Tinker. And it’s one of those things that is so outrageous to me that we’re not taking care of our service members and their families in the way that they deserve, these people that are putting their lives on the line. Balfour Beatty has responsibility for 55 different facilities across 26 states, 43,000 homes, and 150,000 people. That is not an insignificant impact. I’m incredibly disappointed that you have failed to live up to your responsibility for taking care of the people that are living in these houses. It is cheating our military families and our taxpayers, and I’ve seen it firsthand. My staff, and the Secretary of the Air Force, and others were just out at Tinker. Again, there are ongoing problems. And I wish that I could say that things were all better but they’re not. Because while things have, while there has been some progress, it seems like every other week there’s something else that’s coming out, toxic mold, safety hazards. And just week before last, November 20th, yet another report that maintenance records were being falsified to get Balfour Beatty payments that they weren’t entitled to. This is not an isolated incident because there are already 65 documented instances, over 2016 and 2017, of falsified maintenance records. And according to this same November 20th report, employees of Balfour Beatty had systematically doctored records, not just at Tinker Air Force base, but at two other bases. This is a systemic problem and not one that we have to fix, and you have a lot of work to do to fix it. The image behind me is an image of one of the homes that was brought to me by the families living there at Tinker Air Force Base. So Mr. Taylor, my question to you is even if times have improved, is this someplace that you would want to live or allow your family to live?
[Rick] Congresswoman, that picture is unacceptable. Absolutely unacceptable.
Thank you, I appreciate that. It’s just, to me this is unconscionable, and we have to fix it. And it’s going to require a lot of effort. It’s going to require getting down to the heart of the problem, not just putting Band-Aids and painting over things and patching walls which is, may make it look good for a few moments, but it’s basically like putting Band-Aid on a gaping wound. And that’s what people have been living with in far too many places. We have to get to the heart of this issue. In fact, I just spoke to the Secretary of the Air Force earlier today and what we talked about was the need to get down, and this goes for everybody, we’ve gotta get down to the heart of this issue. We’ve gotta stop putting Band-Aids on gaping wounds. We have to identify and get down to the core of the issue. So my next question to you is will you commit to making whatever investments are necessary to put in place long-term solutions, solutions of culture, solutions of reorganization, and if it needs to be tearing down properties and starting over to get to the heart of these issues, so that we are doing right by our military members and their families?
Congresswoman, I alluded to it in my opening remarks, we have made significant changes in the way that we are conducting our business. Putting clear line of sight for the technical issues, these fall in that area, clear line of sight all the way up to the top of the organization, and that rests on my shoulders. And so I am committed to, and I shall be held accountable for the changes that we need to make.
I will be holding you accountable to that. I only have a few seconds left, I also wanna, I also wanna follow up with one final question. From the documents I’ve seen, it appears that your company earns about $4.3 million in performance bonuses each year these properties. Over these years that is tens of millions of dollars in performance bonuses that were paid out while documented evidence that Balfour Beatty, and it doesn’t matter if it was an employee down the line, Balfour Beatty was falsifying maintenance records, tens of millions of dollars. What I want to know is that will you commit to taking every single penny at least of this money that was paid based on falsified maintenance records to invest that in fixing the problems at all of these housing units?
Congresswoman, as I mentioned, those allegations are quite shocking to us, and we are undertaking a thorough review. I mentioned that we’ve invested with outside council to investigate that. The Department of Justice is undertaking the investigation into those very same issues. We have committed to providing the results of our findings to the DOJ. In the event that we are found to have falsified records, then we are absolutely committed to refunding any incentive fees received back to those projects. And further, in the event that any of our individuals are found to be at fault, not compliant with our code of conduct which we take extremely seriously, to the extent that we find that anybody has strayed from our code of conduct, we will take appropriate disciplinary action—
Mr. Taylor, we’re, I’m over time. I just think that it’s important for us to say we are gonna continue to work on this, but the confidence that our communities have and that our service members have and their ability to trust their families to your care, collective care, has been seriously eroded. And it is going to take a lot of work, transparency, and contrition to get to the root of this. Thank you.
Thank you, Mr. Chairman, ranking member Lamborn. In February we had a round table with the spouses and military members affected by these housing issues. And I wanna tell you that I found those spouses and those soldiers who were there, primarily spouses, to be extremely professional and credible. And I was a little taken back at a couple of things. One of the things I was taken back at it’s our fault or the DoD’s fault, I don’t think our base commanders and I don’t think the DoD took this issue serious enough in many cases. I think where we had good base commanders, it was taken serious, and then in other areas, maybe poor base command allowed allowed part of these things to happen. But the primary issue that got my attention was the complexity of the landlord-tenant contract written by lawyers of extremely large corporations that you represent, that is then handed to a soldier who may be, quite honestly, just out of high school, in many cases. And so when you hand these service members the contracts their provisions in these contracts and the mediation contracts that are intentionally designed to, and have the impact, the financial intimidation of our service members and their families that say that if they take you to mediation, if that’s their only course of action where they can resolve the issue and they don’t win, then they have to pay your legal fees. And so my question is this, are these provisions still in your contracts? We’ll just go down the line.
To the best of my knowledge, congressman, we have been adapting the provisions to not have any forms of that type of language, language of intimidation or languages that would provide remuneration back to us as a company if a suit was filed or filed forcedly.
[Austin] Let me move, Mr. Ehle, yes or no?
All of our lease forms are under review, in fact, the industry’s working on a common lease form that would—
All right, that’s not a yes or no. So I’ll assume that you still have the intimidation provisions. Mr. Hickey.
Congressman, to the best of my knowledge, they don’t exist in our contracts.
Mr. Taylor.
I’m not aware that they exist, but I can tell you that we have never pursued recovery of those fees from residents.
They do still exist, but we’re in the process of working with the services with their approval of removing those clauses.
Okay, thank you. I think that when we have our landowners, I think when we have our soldiers’ bill of rights, housing bill of rights, I think those provisions will be struck. That is, that’s unacceptable to me to ask an 18-year-old soldier straight out of high school to sign a contract that makes him responsible for the legal fees of a multi-million dollar corporation. With that, Mr. Chairman, I’d like to yield the remaining provisions to my colleague from North Carolina, Ms. Stefanik. I’m sorry, New York.
[Elise] That’s all right, Mr. Scott.
[Austin] You talk like you’re from North Carolina.
No, I talk like I’m from New York, Upstate. (everyone laughing) Gentlemen, thank you for being here today. Earlier this year, we heard from the services and military family members, and it was really stunning to hear about the challenges that these military families have faced. I have the honor of representing Fort Drum, home of the 10th Mountain Division, the most deployed unit in the US Army since 9/11. So these are families that have faced multiple, multiple deployments in Iraq, in Afghanistan, around the world. It is extremely important to me that they not have the stress that their family members face at home because of housing issues. Mr. Hickey, as you know, Lendlease is the primary private partner for the mountain community homes in The Timbers located at Fort Drum. And I wanna ask you, for the record, because this gets to this feeling that people don’t have a voice and they don’t have an adequate response time when there are complaints, if a military tenant has a complaint or concern, how can they absolutely count on Lendlease to address this concern in a timely, professional, and adequate manner? And most recently, snow removal has come up in the north country. I know some of you don’t face that, but that is a significant concern and came up at a town hall just recently.
Thank you, congressman, for the question. We operate in a structurally very clear protocols of responding to queries we give residents multiple access points to, if any concerns, they can come straight to our project director, they can come through our customer service. They can come through our resident apps. We monitor all of the requests digitally so it’s all done through a system so it’s not a manual process, and we can track anything that’s not monitored or not accessed in time comes as an exception to us. So we have a management regime looking at the things that are not addressed in a appropriate manner. I think in addition, the residents advisory board that we’ve actually put in place, which will be rolling out onto Fort Drum as well very soon, is the other for info which residents can get voices and access in because we will have those community representatives on small areas and making sure that there are several opportunities for them to get heard and get opportunity to voice their concerns or ideas proactively or negatively.
Thank you, yield back. I’ll do my round after.
[John G.] Okay, I’ll turn to Ms. Houlahan.
Thank you, Chairman, and thank you gentlemen for joining us today. Just by way of background, I’m third-generation military. My mom was a resident of military housing, as was her six brothers and sisters. I was a resident of military housing, as with my brother. I have four active duty cousins right now who serve. We represent the Army, we represent the Navy, we represent the Air Force. I also was an educator in a community that was very, very underserved, and the population lived in very, housing conditions that looked a lot like this. And as an educator and a person who lived in housing like this, I can say that I really worry for the children. I worry for the children who are exposed to lead and who are exposed to mold, and I’m worried that what I’m hearing is that people are not using the word mold because it would create problems. They’re creating, your organizations are creating the opportunity to sort of hide things. And so the first thing I’d like to ask because of time, for the record, would you guys be able to submit your policies on lead and mold remediation and amelioration so that we can understand what they are, and what kind of, what you do in terms of what timelines you expect to remediate those? And also what you do to make sure that people, you talked a lot about displacement, what happens when they’re displaced? And also for the record again, what compensation do families have when their goods, their home goods are destroyed. Having had that experience as a child, I understand that. That I would like to have for the record. The other thing I’d like to understand maybe individually is in the case where there is a child who has been affected by this who will be permanently be disabled because of this, what responsibility do you all have and do you all plan for with your for-profit businesses to make sure that those children and those families are being taken care of? Or do you expect that the government will do that for you?
Representative, in our case, we work directly with when an instance like this comes up, we work directly with the medical community on the installation, with the garrison commander. And we try to define where the, or divine where the problem really is. We have had instances where although believe that it was home causing it, it turned out that it was lead in the munitions plant that the soldier was actually working in. So if—
Let’s just assume that it is something that’s identifies being a housing issue that happened in the past, what is the process that you go over?
If we find out that it is determined that the home is in fact the cause of the illness, then we will support that child or its medical costs.
And Mr. Ehle, is that how you pronounce it, Ehle?
Yes, Ehle, sorry.
Ehle.
We’re obviously supportive of the process of determination and through dispute resolution and so forth. If there’s fault that’s determined, we’ll certainly work with whatever the termination is.
Thank you, congressman. We’ll provide you with all our protocols. They’re very clear, clearly outlined. We have a 24-hour response time just to let you know that if anything happens within that 24-hour response, if the residents feel uncomfortable, we will relocate them immediately and so forth. So there is a whole clear regime around how we deal with mold and lead-based paint which I’ll be happy to share with you. If in the instance that yes, we are the cause of any medical condition, then we absolutely look to financially compensate through any structure that is appropriate.
[Chrissy] Thank you.
Congresswoman, I would agree with the other gentleman. If we’re found to be at fault, we’re complicit then—
And you’re planning for that because you guys have been at this for a few decades, and there will be decades worth of kids, who are now presumably grown, that may have those problems that can be attributed possibly back to that.
If attributed to our conduct, then yes, ma’am.
[Chrissy] Thank you.
[Jarl] Congresswoman, we’ll also provide you—
Thank you.
The protocols and whatnot. To answer your question about medical, again if we are proved to be at fault at that, then we work with the families and medical to figure out what’s the best resolution to solve that issue.
Thank you, and with the last 45 seconds of my time, I would like to know. I’ve heard a lot of go down the line and say yes, yes, no, no, no. Having been a former entrepreneur and businesswoman myself, I think the best practices are definitely something that you each are talking about individually. But do you have a group that you share your best practices across all of your different organizations so that each one of your standards is similar or the same and that you’re sharing somebody who said they have an app that people can use. Or you said you have a round table. Do you have a best practice round table?
Yes, representative. We actually formed the Military Housing Association, MHA, specifically to do that. As an outcome of challenges we’ve had, we’ve realized that we do share individual best practices, but we didn’t share ’em or weren’t sharing as an industry so we have started to do that on a much grander scale. And I think it is starting to provide some of the benefits that you will be seeing or have been seeing thus far.
And I know I’ve run out of time and I wanna give everybody else their time so I would love to just hear if you guys could together on that and get back to us. Thank you. I yield back.
[John G.] Thank you, Mr. Wilson.
Thank you, Mr. Chairman, and thank each of you for being here today. Mr. Taylor, I’m really grateful that for the leadership at Fort Jackson commander Brigadier General Milford Beagle has inducted a town hall with your company, with Balfour Beatty, to address the issues of housing. Complaints were raised about the broken sidewalks, long lines for the completion of work orders, shoddy work repairs, and no-shows by the maintenance staff. What have you done to correct these deficiencies? Is there a residency advisory board established, and is there a project manager that you can report to on a 24-hour basis?
Thank you, congressman. I think universally across all of our portfolio, we are getting better at forming resident groups that we can meet with and we do that in concert with our military partners at the individual installations as well. Town halls that are, we’re starting to see an increase in the frequency of town halls that we participate, again, alongside our military partners. Those are great ways for us to get the information to understand what concerns our residents are facing. In terms of processes, changes that we’re undertaking, as I indicated in my opening remarks, we certainly recognize that we could be better in many locations. And so we’ve addressed that through a number of staffing level increases, looking at the policies and procedures that we do have in place, and where we saw that they were deficient, we’re addressing those. It’s not as simple as one, addressing one area to address a more broad problem. We’re taking on a number of different areas to improve but all of that is through process procedure, making sure that we’ve got appropriate staffing—
Is there a hotline where a resident could report an issue?
Yes, sir. We have a, we have an 800 toll-free line that any resident, employees, anybody can call to let us know at the corporate level any issues that they’re facing that aren’t being addressed locally.
Thank you. Mr. Ehle, Joint Base Charleston is a Hunt Military Community, however, there is some confusion about the structure of your deal with the military. I understand there’s a 50-year deal. The agreements are not contracts, and that you’re considered a partner not a contractor. Can you explain this and how the system works?
All of the LLCs that we have are 50-year ground leases. The land owned by the government and the partnership element is that these are meant to be true public-private partnerships. With the Air Force, which is what JBC is, the Air Force is not a legal member of the LLC like the Navy or the Army are on their projects. But the Air Force does have an investment in the form of government direct loans so they have a financial interest in the project, and so there is a partnership. And of course none of these can succeed without having a really good functioning partnership, and a partnership is both cooperation but also mutual accountability. It works very well with the Air Force.
Thank you, and I yield the balance of my time to Congresswoman Elise Stefanik.
Thank you, just to follow up. One of the aspects in the NDAA that we focused on is the importance of a common tenant bill of rights. I want to hear from each of you, and I’ll start with you, Mr. Hickey, just because of the importance of your answer to my district. What rights are you proactively ensuring that are afforded to our military families who are leasing your properties, and how do you measure that success?
Thank you, congresswoman. For the question, we have all been working diligently with the services on a common bill of rights. So we’ve participated, we’ve put forward our suggestions, and so that’s well-documented. I think that we’re almost solution. But putting in the ability for residents to receive refund, for example, if they’re in a situation where they are in a house that has not been maintained properly, they can get refunded rent, putting in plain English version contracts, right to actually terminate contracts if there is something wrong with the house, giving more flexibility back to our residents is something that we’ve been focused on.
Sure, and I know you’ve communicated that to the services, what about to the families? Have you solicited feedback from military families for suggestions for that tenant bill of rights?
Yes, we have. Yes, as I said before, we’ve been liaising with the Safe Military Family Initiative. We’ve been liaising directly with, we’ve been holding town halls all over, across all of our bases including Fort Drum, and getting that feedback and asking what would they like to see. So it has been a collaborative approach.
Okay, and the rest I’ll take the answer for the record ’cause my time’s expired.
[John G.] Thank you. Yes.
[Deb] Thank you, Chairman.
Ms. Haaland.
Thank you, Chairman, thank you. And thank you all so much for coming. I appreciate you being here and taking the time to be with us today. My district is in New Mexico’s 1st congressional district. I have Kirtland Air Force Base, and we have 365 days of sun per year and the climate is extremely dry. And yet we have still had reports of mold there for whatever reason. It sounds kind of strange, but nonetheless, that is one of the issues that my constituents have reported to me. I am a daughter of a 30-year career Marine so I grew up in military housing all along southern California and in Virginia both. Luckily, I have nothing but good memories of those times, unlike many of the families who unfortunately do not share that same, will not share the same memories that I do. I do hear some good things from my district. For example, I hear the new maintenance comment cards include information about the technicians coming into the homes, as well as what work they’re doing, and that quality of the repair work has improved. There are better communication and that’s absolutely vital. And I’m glad to hear that Hunt is taking these steps. Also hear about the fall festival and other family activities. Those are all good things. Unfortunately, substantial challenges remain. Families continue to receive inconsistent treatment and information from Hunt staff. My first question is for you, Mr. Ehle. Can you please share what steps your company is taking to improve in standardized customer service?
Yes, representative. The lack of consistency is something we’re extremely focused on all across our portfolio. It’s one of the reasons why we are focused on promoting standardization across, not just our portfolio, but the industry. So we look at things like variances in response and completion standards, not just a prerogative across the portfolio and across the industry. We’re very much in favor of doing that. In fact, we’ve already done that in our own portfolio, is establishing a Hunt standard for, standards of consistency, and so our residents should start seeing that very shortly. In terms of our environment concerns, environmental concerns are on the rise. In the last couple of years, we’ve seen mold in ways we’ve, to an extent that we haven’t seen in a long, long time. Primarily caused by some extreme climactic conditions that haven’t historically been seen, but I don’t think that’s gonna change in the future. So we’re beefing up our environmental expertise on-site and at the corporate level. We’re beefing up our environmental training for our maintenance techs. We’re adding maintenance techs, we’re adding QA/QC professionals to ensure quality of work completion. And we’re have made a great deal of progress in filling all those positions. And then of course, increased training across all of our people.
Thank you. I’d like to turn to the issue of mold. And thank you for raising that yourself. It continues to be a major challenge, and we’ve heard that from my colleagues. Many families want to have licensed and certified third-party experts conduct testing in their homes. Some have been told that Hunt and other housing companies won’t accept these results or that third-party experts would not be permitted to enter the homes. Mr. Ehle, what is Hunt’s policy regarding mold testing by licensed third-party experts?
We tend to follow the EPA guidelines related to testing. And the EPA tends to advise against testing because they find it to be inconclusive. As examples from elsewhere in our portfolio is we’ve had tests on houses that don’t readily apparently have mold that the tests come back high. On the other hand, we’ve been in houses where there’s obvious mold all over a wall and the test comes back that there is no mold in the house. So we’ve found that it’s difficult to find a reliable test.
Would you allow families to seek a second opinion on the presence of mold in their homes by licensed third-party experts?
We support anything that our residents choose to pursue for evidentiary purposes. Again, we’ve found that testing is unreliable because it can go either way. It could be a false positive or a false negative.
Thank you. I’d like to, how much time do I have? Chairman, I yield
[John G.] Thank you, Ms. Stefanik.
Thank you. One of the aspects of this crisis that I think is really important is prevention and mitigation. And at Fort Drum we have a relatively young population, of young soldiers, young military families. Oftentimes this is the first time that they’re responsible for their home that they’re living in. How are you, Mr. Hickey, investing and providing educational materials for those young family members and young service members to know to contact you before something gets to a crisis level that we’ve seen in some of these photos?
Thank you, congresswoman for the question. We actually share your same concern. Many times they are 18, 19-year-old people who have just moved out of home, and they have to maintain a house and think about issues about avoiding damp conditions arising in a house and so forth. At every move-in, anytime somebody moves into a residence, it’s a personal handover. We take a personal tour of the house with them. We explain some of the issues. We explain how things work in the property. We explain some of the maintenance obligations and how they go about looking for things that are problematic. We also do a 30-day and a 90-day check-in with them to make sure, how are things going? What are we doing? If they want any help in terms of looking after their home and also do a yearly inspection on all of the property. So in all of those times, we seize the opportunity to help train them or help educate them or give them visibility as to what they can do better. And we also tell them that the minute they’ve got a concern is to ring us straight away, and then we’ll come out and talk to them. So there’s a little bit of education. We can do more of it, and we like to do more of it, but there’s also training them to help themself at the same time. So that’s what we do and we continue to invest in that.
Thank you, yield back.
Thank you, Mr. Chairman. I thank the committee, the subcommittee for allowing me to participate in today’s hearing. Let me just start by saying, look, I support the Military Housing Privatization Initiative. I support things like enhanced use lease on military installations. I support public-private partnerships. In Maryland we’ve done a lot of good things from the port of Baltimore to the Purple Line to travel plazas on interstate roads. But I support them only when we can ensure that we deliver quality safety, reliable value products and services to the public, what the public demands and what they deserve. And in this case, when we’re talking about privatizing military housing, the public is that very cherished public, our military families. And here we fell short. My concern is this, I get that circumstances may have changed over the decade or so when started the program to where we are today. I hear about the drawdown. I hear about the reductions in the BAH rates, and how that put pressure on the ability to deliver quality, but what concerns me is it took the courage of military spouses to come to Congress. The Pentagon didn’t come to Congress and say, “We have a problem.” You didn’t come to Congress and say, “We have a problem.” The framework, the model, the formulas that we based these agreements on years ago doesn’t work because of a changed environment. Instead military families got squeezed and it was military spouses who stepped up. And that’s a shame on you. It’s a shame on the Pentagon, and we’ve gotta fix it. Mr. Picerne, I got that right, Picerne? Close enough? Yeah, in February of 2019 earlier this year, at a SASC hearing you stated we hire world-renowned specialists at no cost to the government to renew our mold and mildew procedures so that hereto we are living up to the gold standard. Yet today, you are now saying it’s, quote, “It’s going to some time to get back “to the gold standard of communication and service “that residents enjoyed “in the early years of our MHPI partnerships.” Why have you, this is the question, why have you not been able to return to the gold standard that you promised to Congress, and more importantly, to our service members? Why has your position changed?
Mr. Congressman, our position has not changed. We endeavor to return to the gold standard. As I mentioned in my testimony, the gold standard really will be when a deployed soldier is able to call back which is one of the tenets that we founded our business on. Recall back from forward deployment and talk to his family or her family about what’s happening in their lives and not deal with homeowner or home issues. We are getting closer and closer back to that standard. We’re not there yet—
Let me ask you this question.
I also don’t want to accept the fact that we got there because it’s an ever growing—
Let me ask you this question. At Fort Meade, Maryland, and you had mentioned in your testimony today that town halls and greater communications with service members is a big part of it, and their families. It’s my understanding that at least one service member has been denied access to those town halls or those communications. Are you familiar with that?
Congressman, I am not familiar—
Okay, I would ask you please to familiarize yourself with that so that when we say that service members are in both formal and informal communications with you, that that means all service members. Mr. Chairman, I ask unanimous consent to enter into the record a letter that I have sent today to the installation commander at Fort Meade asking the garrison commander, Colonel Spragg, to really step up his oversight at Fort Meade. Because I really believe that you guys are not even making forward progress as you had committed earlier this year. Without objection, Mr. Chairman, can we enter this into the record?
[John G.] Without objection is my turn. There’ll be no objection.
Thank you.
So ordered.
Another question. Several of the service members that are stationed at Fort Meade have conveyed to me that they’ve experienced direct retaliation from your company in response to their attempts to resolve maintenance issues with their homes. These behaviors include obscene gestures, drive-by harassment, denying access to the resident response group which I just mentioned, and a refusal to address maintenance issues until a service member receives a PCS. First of all, are you aware of that? If so, whether you are or not, do you condone this behavior. And finally, what actions are you gonna take to ensure that harassment immediately ceases?
So congressman, we actually take any form of retaliation, retribution, or harassment seriously and not condone that behavior. I am not aware of any specific cases where that has taken place. I will look into it immediately, and I will report back to you once we have our findings.
Well, I appreciate that ’cause these are serious allegations. And look, when military families are stepping up and just protecting their own rights, they certainly do not warrant retaliatory measures. With that, Mr. Chairman, I yield back.
[John G.] Thank you, Mr. Brown. Ms. Escobar.
Thank you so much, Chairman. I’m very grateful for this hearing. Thank you to our panelists. I appreciate your presence here. I wanna also recognize and thank the military families who have expressed so much courage in the face of potential retaliation and after years of frustration and incredible difficulty, thank you all so much for being here. I’m very, very grateful for your strength and your courage. The round table that we had with military families, and I’ve had some of these conversations with you all personally, not everyone but with most of you. Those conversations at the round table were shocking, heart breaking, difficult to hear, and to be honest, infuriating. I am very grateful that there’s been a spotlight placed on all of this, and that there has been a demonstrated desire to preserve the private-public partnership, but to improve it in order to sustain it and make sure that we continue it. Mr. Taylor, we had a conversation about all of this but as I mentioned to you all in my office, what was particularly troubling on top of the many issues that families brought forward, issues that literally meant that people’s lives were upended, that health was put at risk, children were put at risk through mold and through everything else, what was particularly troubling for me was the fraud allegations. And we talked about everything that you all are doing to not just remedy but to investigate, and I appreciate the investigation. But I’m gonna ask you here in this hearing publicly, the same thing that I asked you in my office, and this is about accountability. Because too often accountability is swept under the rug or as I mentioned to you, lower level employees sometimes are fired, but the high-paid, high-level folks who should have known and who should have created a culture of accountability, remain untouched. So I’m gonna ask you here in this hearing what I asked you privately, which is I’d like to know the number of dismissals that have occurred as a result of the fraud allegations. Any other disciplinary actions that have been taken, and how will leadership, how far up the chain will that accountability go? How will leadership be held accountable? And if you could answer all of those questions for me. I’m not asking for names of folks. I’m not asking for you to disclose anything that is in personnel files. This is important to understand in terms of accountability for me, the general information, please.
Thank you, congresswoman. I do recall the conversation and it gave me an opportunity to go back and interrogate our information so that I would be prepared to respond. Before I give you the number, I will just say this, and I’ll repeat it, a comment, a remark I made earlier. We are all accountable. We are all accountable to provide the service that we are entrusted to provide. It doesn’t matter where we sit in the organization. Since the allegations of fraud were levied earlier this year, I went back and I asked our staff to look at how many folks that were on our staff were let go because they didn’t comply with our policy’s procedures, our code of conduct because that’s really at the heart of our organization. If we don’t have staff members that are willing to follow those policies and procedures, that’s an obvious weakness in any organization and since the beginning of this year, we found 17 instances of where we’ve let people go because they were not compliant with the standards that we set for our employees. Where they sit in the organization? Without naming specific positions, there were managers that were let go. Those folks were at project sites, I grant you. I will tell you this that, and again, to reiterate a comment I made earlier, regardless of what the investigation reveals, if it identifies wrongdoing by any member of our staff, it doesn’t matter if it’s at the top of the organization, the middle of the organization, or wherever it sits. Rest assured that we will take the appropriate action to make sure that those folks no longer are employed by our company.
Thank you, and I’m just about out of time, but I will just say to all of you, it will be very important that the improvements that you’ve made that you report back to us. We need to know the number of calls, the number of people using the apps, et cetera. We need to see within a time certain of reporting back, complete transparency, because that’s the only way that we can hold you all accountable as well as ourselves accountable. Mr. Chairman, I yield back.
Thank you, Ms. Escobar. Votes have been called. So I’m gonna just wrap it up with a couple of comments. I’ve noticed that the quality of questions from both sides here have asked most everything I would’ve asked, but I want to make a couple of comments. First of all, this hearing is one of a series. We will not let this issue go. As long as I’m sure the members of this committee are still members of the House of Representatives, we’re gonna stay on this. And certainly the committee will, certainly during my chairmanship, and I’m sure should that lapse and somebody else has it, it’ll carry on. So be aware, gentlemen. And for those who are not here, that are part of this system, they too are going to be held accountable along the lines that the questions asked by the committee. Two things or several things need to be noted. First of all, we knew right at the outset that part of the problem was the base commanders did not take responsibility. That is changing. That needs to be addressed. The Pentagon is well aware of it, from the previous secretary all the way down the line. And we’ll see to it that that accountability remains within the military and the base commanders. Secondly, there will be a bill of rights. It is in final or near final form. We’ve not had a chance to review it. I am told the Pentagon is awaiting the passage of the NDAA and the final version of it which will have some, may have some impact on the bill of rights itself. But it will be forthcoming, and it will in many ways deal with many of the issues that we’ve heard here today. Secondly, the question of the lease contracts themselves. We will push that all leases across the entire military reach the highest standard of any state lease. A homeowner’s and tenant bill of, tenants laws and the highest standard which I’ve been told might be Massachusetts but I claim California. We’ll see. If any of the members think that their tenant rights are better in North Carolina, well, bring it forward and we’ll see. But in any case, we will try to achieve consistent with the multiplicity of contracts that do exist between the military and the private housing providers. We’ll make sure that the lease contracts protect the tenants so that tenants will be in the first order. Secondly, many questions about metrics. How do we observe quality or lack thereof across the whole range of issues? Those metrics are under review, and I would ask any member that has ideas about what should be in those metrics to bring it to us, and we’ll drive that forward. Finally, with regard to the role of the tenants and the communities themselves, there are efforts underway on many of the bases, but I suspect not all, that there be formed within the home owning, excuse me, the rental community or the renter’s programs in which they can participate. The word PTA was used here. I’m not sure that’s the best model, but it certainly speaks to the involvement of the families working together to assure that their issues are fully dealt with at the base level, and if necessary, here in Congress. So I think that covers many of the issues. Mr. Lamborn, any further thoughts? Then this meeting is adjourned. And before I adjourn, we’re coming back, folks. We’ll do these hearings every four months or so, so we’ll be back in early spring for a review of where we are, and we’ll ask the services as well as the owners of the privatized housing. We’re adjourned.