Officials Now Looking for Evidence of Fraud in Military Housing Scandal

Virginia's two senators Tim Kaine, right, and Mark Warner both spoke to the Hampton Roads Chamber during a breakfast at The Main in Norfolk on Monday, December 10, 2018.  (Stephen M. Katz/The Virginian-Pilot via AP)
Virginia's two senators Tim Kaine, right, and Mark Warner both spoke to the Hampton Roads Chamber during a breakfast at The Main in Norfolk on Monday, December 10, 2018. (Stephen M. Katz/The Virginian-Pilot via AP)

Military families went years with no one in leadership paying attention to their complaints of unhealthy and dangerous living conditions in on-base housing.

The top brass is listening now.

In the past several weeks, the secretaries of the Army, Navy and Air Force have visited military bases, viewing substandard homes and speaking with families. Lawmakers have traveled to installations in their districts for a first-hand look at living conditions. Staff members of influential congressional committees have flown far and wide to understand the scope of the issue.

And in these visits, they may be building cases against the eight major companies that hold the contracts to manage base housing.

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According to Sen. Mark Warner, D-Virginia, lawmakers and Pentagon leaders have seen evidence shared by families -- photos, videos and more -- of conditions that are not only "disgraceful," but may also show criminal fraud.

"One spouse sneaked into her house -- because families don't have access to their own homes [during repairs] -- and has documentary evidence that the workforce in her home wasn't fixing, but cosmetically patching," Warner said during a visit Thursday at Fort Belvoir, Virginia. "In terms of mold issues, that's not fixing, that's trying to cover it up. That's fraud. That's a criminal offense."

Added Army Secretary Mark Esper, "In a couple of cases, where it looks like, sounds like, smells like fraud, I want to investigate these and, if there is real evidence here, we want to pursue it."

During the past two years, multiple reports -- including years-long investigations by Reuters -- have surfaced regarding squalid conditions at military houses run by private management companies, including faulty wiring and exposed plumbing, poor water quality, vermin infestations, mold and lead contamination.

One military spouse, Warner said, nearly died from carbon monoxide poisoning from a faulty HVAC unit, and the housing management company tried to force the family back into the home.

"The companies have this mindset that if they can keep punting on the problem, ultimately the families will redeploy or move on," Warner said.

Concerns and complaints went either ignored or haphazardly addressed by the housing companies, which hold 50-year contracts on the properties. In addition, military commanders responsible for managing the federal housing staff that is supposed to represent the troops, "over time stepped away," Esper said.

"When I was in the Army in the early 1980s, our responsibility was to take care of soldiers wherever they lived -- in the barracks, off-base housing, on-base housing. We have to get back to that," Esper said.

To address the problems, the Army, Navy and Air Force launched inspections of on-base housing and have held town hall meetings at every installation, according to officials. They have drafted a tenant bill of rights that will allow troops to withhold rent payments if their homes are not in working order or repairs haven't been properly made.

The Army last week suspended its utility billing program, ensuring that families don't have to pay for using extra utilities.

Esper said the Army is educating base commanders on improving their oversight of the housing companies that manage programs on their installations. And the services secretaries are examining whether they can break the 50-year contracts and replace them with agreements that could be renegotiated every few years.

Noting that the Navy had problems with mold in contractor-owned housing in 2012 and the problem was "fixed for a year or two," Warner suggested the services go further to hold base commanders responsible.

"There has to be a relentless focus by management. This has to be part of their [military] evaluation -- the satisfaction of the families on their bases," he said.

Warner and Sen. Tim Kaine, D-Virginia, who also visited Virginia military installations this week, have introduced legislation that would allow the military to withhold payments to contractors until problems are resolved and allow installation commanders to retain a service member's basic allowance for housing payment to companies until a reported problem is fixed.

Their bill also would allow the Defense Department to retain incentive fees it now pays to some companies if performance is unsatisfactory.

"The real problem is families don't feel like they can get an answer. We have to turn it around for them. The housing companies have to improve, but the military has to fix [the problems]," Kaine said.

Allegations of criminal fraud were first raised March 7 during a Senate Armed Services Committee hearing on the problems in military housing.

Sen. Richard Blumenthal, D-Connecticut, suggested that the services ask the Justice Department to investigate, while Sen. Elizabeth Warren, D-Massachusetts, and Sen. Mike Rounds, R-South Dakota, asked the service secretaries to consider potential malfeasance and fraud.

-- Patricia Kime can be reached at Follow her on Twitter at @patriciakime.

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