Mel R. Martinez Housing And Urban Development Established: 1965 2003 Budget: $30.9 billion Full-time Employees: 10,500 Martinez's Salary: $171,900 Web Site: www.hud.gov Overall Grade: C+ Back To Overview And Other Cabinet Grades

National Journal
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Friday, Jan. 24, 2003

As a former chairman of both the Orlando Housing Authority and Orange County in Florida, Mel R. Martinez dug into housing and urban development issues well before moving into the secretary's office at the Department of Housing and Urban Development. But it was his earlier life story that made him a good political fit with the Bush administration: At 15, Martinez fled Cuba under a Catholic Charities program called Operation Peter Pan, which placed him with foster families in Florida. His parents joined him four years later.

Martinez became close friends with Gov. Jeb Bush of Florida and co-chaired George W. Bush's presidential campaign in the state. At the end of the recount turmoil, he was plucked from relative obscurity to become the administration's highest-ranking Hispanic. Both Martinez's supporters and his critics invariably preface comments about him with a compliment not often heard in Washington: He is a genuinely nice guy.

As Martinez, 51, eyes an eventual run for statewide office in Florida, he remains staunchly loyal to the Bush team. But that loyalty hasn't prevented him from tackling some tough housing issues. He fights cautiously and, unlike his higher-profile predecessors, is more likely to get involved in policy technicalities than in public political battles. He voluntarily waded into a complex overhaul of housing-finance regulations, a snake pit of vested interests that scared off previous secretaries, and he assigned his deputy, Alphonso Jackson, the job of fixing the legendarily dysfunctional HUD bureaucracy.

But Martinez has shied away from some battles: He has focused on homeownership while ignoring the thornier issues of public and rental housing. Industry groups and members of Congress who care about the issues he champions are either impressed or nonchalant about him. Those who have experienced the department's poor communications about mistakes, particularly in its agency for public and Indian housing, are furious.

Bruce Katz, director of metropolitan policy at the Brookings Institution, said of Martinez's divided attention, "You can succeed at one part of your job and fail miserably at another."

Inside Influence Grade: B
As HUD chief in a Republican administration -- eight years after the Gingrich-led House proposed eliminating the department altogether -- Martinez isn't supposed to wield much inside influence. Whenever the president appears at Hispanic, Florida, faith-based, or housing events, Martinez is at his side. The rest of the time, his job is to keep HUD out of trouble and not ask for much money. If he can get some of the president's time and win small concessions for the department, he's doing OK. "He's not out there like some of his predecessors were, actively lobbying OMB," the White House, and Congress, said Conrad Egan, director of policy at the National Housing Conference. "He's more interested in going with the flow."

Traditionally, in the Cabinet the HUD secretary is the lowest guy on the totem pole anyway, said Guy Cecala, publisher of the newsletter Inside Mortgage Finance. But "that doesn't mean he doesn't have the president's ear or support," he added.

Martinez has gotten the White House to focus on housing at times: In October, even with a sniper terrorizing Washington and Iraq coming to a boil, he got Bush to host a White House homeownership conference. Martinez got the president to speak about homeownership a number of times during National Homeownership Month in June.

In addition, Martinez and his deputy tangled with the Office of Management and Budget and emerged not only with an exemption from OMB's outsourcing plans, but also with permission to increase HUD's staff size. Martinez also gets points from other agencies, from both political and career employees, for reactivating an interagency council on homelessness and creating working relationships with the Veterans Affairs Department on housing issues.

But, critics point out, there's no new money on the table for HUD programs, emergency shortfalls, or homelessness. Martinez "puts in his request, and then gets let down by the administration," says Sen. Jack Reed, D-R.I. "Then he turns around and puts the best face on it."

Hill Clout Grade: C
During a hearing in February 2002, Martinez accidentally referred to Rep. Barney Frank, D-Mass., as a senator. Martinez apologized for the promotion or "demotion -- whichever way, I'm not sure."

"Mr. Secretary," Frank shot back, "from your department I will take motion, whether it is de- or pro-."

Martinez has had a difficult two years in his relations with Capitol Hill. Not only has he failed to push the administration's legislative agenda on housing tax credits and down-payment assistance, he has let constituent letters and even urgent requests for help disappear into a black hole. In the fall of 2001, for example, members started getting calls from community groups that weren't receiving their grant funds from HUD. Both Republicans and Democrats began calling the department, but to no avail. A joint letter also failed to get a useful response. Finally, they confronted Martinez at an unrelated hearing -- but even that tactic was only partially successful. "HUD was wholly unresponsive to our attempts to even get information, much less get the groups paid," said a Democratic aide. "That which should have been a minor matter turned into a major inquiry."

But Martinez has had some late-in-the-game success on the Hill. Last year, the House Financial Services Committee drafted a bill that established a housing trust fund. Martinez opposed the fund, but HUD was out of communication throughout the bipartisan drafting process, and the measure passed in a committee vote. Only then did Martinez pay attention. "We got behind the eight ball," he admitted. Calling on Rep. James Walsh, R-N.Y., chairman of the House Appropriations Committee's Subcommittee on Veterans Affairs and Housing and Urban Development, Martinez stopped the markup and got another committee vote scheduled, successfully killing the bill.

After that episode, Martinez fired his head of congressional affairs and reshuffled his congressional staff. With that shake-up, and a lot of Republicans grateful for his campaign assistance, he may get a chance at redemption on the Hill.

Political Imperatives Grade: A
As the highest-ranking Hispanic in the Bush administration -- and as someone who came to the United States through a faith-based charity-the bilingual, charismatic Martinez helps make dreams come true for Republican outreach operatives. Describing his relationship with Bush, Martinez says, "If he's done Hispanic events, if he's done Florida events, if he's done faith-based events, or if he's done housing events, I've usually been with him." The Republican National Committee says that Martinez was the most-requested surrogate for the administration during the 2002 campaign. Martinez himself estimated that he spent 50 percent to 80 percent of his time on the road this fall.

Martinez has also scored political capital with the housing-finance industry. As he was closing on his home purchase in Washington, he was stunned to realize that he, an attorney and the secretary of HUD, didn't understand all of the paperwork. Where his predecessors had avoided rewriting the confusing morass of regulations that govern relationships among mortgage bankers, brokers, real estate agents, and consumers, Martinez plunged in. But many in the housing industry are unhappy with the fast pace of the complex reform, and the kudos they give Martinez for taking it on may change to complaints upon publication of the new regulations this spring.

Low-income housing advocates -- never strong Republican voters -- are unhappy with Martinez's inattention to their issues; they cite his silence on the crisis in affordable rental housing. Martinez believes that local regulations are an enormous component of the crisis, and he says he intends to turn up his megaphone on the rental housing issue in the coming year.

Running The Department Grade: C
HUD has a reputation for chronic mismanagement. In late 1994, then -- Secretary Henry Cisneros was forced to slash the department's workforce almost by half just to keep the department alive. His successor, Andrew Cuomo, worked to streamline the gutted agency and was able to move many of its functions off GAO's list of programs at high risk for abuse and mismanagement. Nevertheless, Martinez inherited a mess: Many of the department's programs don't have enough employees to run them, and about half of its workforce will be eligible for retirement in the next few years.

Martinez put his deputy, Alphonso Jackson, in charge of fixing things. Jackson says he expected problems but didn't know the problems could be traced to "no management." He's trying to push power back into the field offices, clarify chains of command, and institute a new program to bring in gifted young employees to learn from -- and eventually replace -- aging workers. He has also sunk energy and resources into streamlining and modernizing the Federal Housing Administration. After years of neglect and frustration, career HUD employees are warily welcoming the attention from the top.

But the department still stumbles through enormous snafus in program management. And it compounds its errors through poor communication.

The Public and Indian Housing Administration is particularly afflicted and has been having problems cutting checks, balancing its books, administering its programs, and sending out clear letters to constituents. Policy changes, say public housing authorities, need to be communicated instead of enacted without warning, because the result has been missing checks, piecemeal notices, and last-minute changes in regulations. "They either don't understand the programs or they're trying to destroy them," says a frustrated former HUD official. "They're either incompetent or malicious."

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