We here highly resolve that…government of the people, by the people, for the people shall not perish from the Earth. –Abraham Lincoln

It’s unoriginal, but nonetheless true and worth saying that government agencies shouldn’t act in secret. Whether it’s the vice president of the United States, the Department of Homeland Security, the Justice Department or even the Department of Housing and Urban Development, the public has a right and a responsibility to know and understand governmental decisions and actions.

The federal housing department, a $32 billion public agency with 9,300 employees, violated this sacred principal of openness some 90 days ago when it submitted to the White House Office and Management and Budget a finalized rule to revamp part of the Real Estate Settlement Procedures Act. RESPA is a set of regulations that proscribe certain disclosures for home mortgages and prohibit certain kickbacks in real estate transactions, among other requirements. The rule HUD submitted to OMB hasn’t been made public, so no one knows exactly what’s in it.

It’s easy to understand why HUD acted in secrecy. The initial draft of the proposal that HUD unveiled in June 2002 was so contentious that it unleashed a flood of 45,000 public comment letters. The paperwork burden was so great that the housing agency had to hire an independent contractor to categorize all the comments. The American Land Title Association, to mention just one group, submitted an uncomplimentary 50-page critique.

HUD sent its finalized rule under wraps to OMB in mid-December 2003, just a week or so after then HUD Secretary Mel Martinez resigned from the presidential cabinet-level post to campaign for a seat in the U.S. Senate. The proposal was readied on Martinez’ watch, but he didn’t stick around at HUD long enough to see it through.

Martinez’ replacement was HUD Acting Secretary Alphonso Jackson, who has been nominated to hold the post more or less permanently. Jackson, who has been praised as a sturdy administrator, immediately declared his support for new RESPA regulations.

“This department will continue to make the process of buying and refinancing a home simpler, clearer and less expensive for consumers across this country. You have my word on this,” he said in a statement.

Jackson has had three months since his appointment to make public the finalized RESPA regulations that HUD sent under cover to OMB. But he hasn’t taken advantage of the opportunity to open his own dialogue about his predecessor’s proposal.

More than 200 members of Congress last Friday sent a letter to OMB to protest the secrecy of the process. The letter stated that the signatories support HUD’s efforts to improve the home-buying process, but disapprove of the way in which the agency submitted its finalized rule to OMB.

At least three Congressional committees held hearings on HUD’s initial proposal. But those committees haven’t been able to hold any such hearings on the finalized rule because Congressional representatives and aides haven’t been allowed to read it.

HUD shouldn’t have acted in secrecy, whatever its reasons and regardless of the merits or demerits of its rule. Government agencies should place their proposals in the sunshine, make their best case for why the proposals are in the best interests of the public, then stick to their guns, even when special interests cry foul and attempt to bury the proposal in paperwork.

Secrecy is not the right approach, but it seems to be endemic at HUD.

Inman News yesterday sent an e-mail message to HUD spokesperson Brian Sullivan to ask whether the agency had received a reply from OMB and to confirm whether Monday, March 15 is indeed the 90-day deadline for OMB to comment on the rule.

Sullivan’s reply: “As soon as we’re able to tell you more about the potential direction the Department will take following OMB’s review, I’ll let you know instantly!”

C’mon, guys, what’s going on?


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