this is about two and half hours. chair ossoff: the permanent subcommittee on investigations will come to order. thank you all for your attendance. thanks to the public tuning into these proceedings. ranking member johnson, thank you for all of your work, as our staffs and we have collaborated on this investigation focused on the mistreatment of military families in privatized housing on u.s. military installations. in the mid 90s, when the department of defense commenced the privatization of military housing, it was envisioned that this initiative would lead to better outcomes for military families: safer, more reliable living conditions, healthy homes, affordable housing available to families living on and around u.s. military installations. for years, however, this program has been plagued by problems. and when i visited fort gordon in the first few months of my term in the senate, i asked the command if i could sit down with families on post to hear about their experiences living in privatized housing managed by balfour beatty at fort gordon. and the stories that i heard shocked me. i heard stories about maintenance requests that were ignored, maintenance requests that were never followed up on not just routine maintenance, but maintenance that impacted the health and safety of our servicemembers and their families living in their homes. and those families at fort gordon, they asked me to take action. and so, using my authority as the chair of the permanent subcommittee on investigations, and working closely in a bipartisan way with my colleague, ranking member johnson, who in his past capacity chairing the homeland security committee, has led substantive oversight investigations of related matters, we embarked upon an eight-month intensive investigation looking into these allegations of mistreatment of military families at u.s. installations. we focused on fort gordon in georgia and sheppard air force base in texas. and the results of this investigation are alarming, are disturbing, reveal injustice imposed on servicemembers and their families, reveal grave risks to the health and safety of servicemembers and their families, reveal neglect by balfour beatty, which is responsible for housing tens of thousands of military families, and reveal not just neglect, and in my view, misconduct and abuse, but neglect, misconduct, and abuse that persisted even after balfour beatty pled guilty to a scheme to defraud the united states between 2013 and 2019. today, we're going to hear from servicemembers who have joined us to share their personal family stories of living in balfour beatty housing. we will hear from advocates, military spouses, who will share what they've learned from their personal experiences and advocating for the families who live on post and live on installations across the united states. and then we will ask tough questions of senior executives at balfour beatty, demand answers and accountability. again, i want to emphasize this has been a bipartisan effort from start to finish. ranking member johnson has been a great partner in this effort. i thank my staff and his staffs for their tireless work, reviewing tens of thousands of pages of records, interviewing dozens of witnesses. i thank our witnesses for joining us today, in particular the servicemembers who i'll introduce after our opening statements, who have come to share their stories, who have displayed the bravery, courage and dedication that we know and expect from those who serve in the armed forces, and are doing a great public service, by joining us today and sharing their stories. with that i'll yield to the ranking member. ranking member johnson: i really appreciated the cooperation, it is true it is bipartisan i like using the term nonpartisan. well allows for that kind of nonpartisan cooperation is when you focus on things will agree on. i will keep my opening statement short. i will enter my written statement into the record. let me read one paragraph from it. service members represent the finest among us. they and their families make many sacrifices in service to this great nation. when stationed in u.s. military installations, these men and women should expect to live in conditions that will not damage the health and safety of themselves and their families. his pre-sibling and that is why we are able to do a good job at into this. going through all those documents, i appreciate all the work from the staff. i think in the end, i look forward to hear the testimony and ask the questions. the question echo going through my mind throughout this investigation and report. the statement, for me once, shame on you. full me twice, shame on me. you have a settlement, six $5 million penalties and fines and two years later it seems like it is going on as it was prior to the find being imposed. i am wondering how was the military doing this, how going get this under control. military does not wed deal with housing so they contracted outside, then you do not set up the controls so the contractors to the table job we expect. i appreciate the cooperation and look forward to the year. chair ossoff: i will introduce the witnesses and then you will stand to be sworn. captain samuels with the u.s. army and lived in balfour housing at the fort gordon army base in georgia where he was assigned the 202nd intelligence -- when he was posted to south korea for the first signal grade. they have three children and come from a fan with a fan with have been devoted to national service. his father served, his uncle was a special forces and rage are qualified italian deputy commander. his -- battalion deputy commander. i would note that he is testifying today in his personal capacity and not in any official capacity representing the view of any military service. technical sergeant jack, has lived on base at the sheppard air force base in texas. in balfour provided housing with his wife and three children. he deployed three times what is supportive and -- operation enduring freedom. he is also testifying today at his personal capacity. nor is he represent the view of the u.s. army or any of terry service. ms. rachel, founder and chief legislative officer of armed forcing housing advocates, a national organization representing military families found in between 19 -- 2019. and a military spouse that has lived on base housing and has become an advocate for their families struggling with housing issues on u.s. military solutions. particular yet for corded in georgia. on behalf of the subcommittee and said it we deeply appreciate your presence today. i would ask you to raise your right hand, stand and be sworn in and remind you that this testimony will be underwrote. do you swear if the testimony will give before this subcommittee will be the truth, whole truth, nothing but the truth so be god? please be seated. let the record reflect that the witnesses answered in the affirmative. we will be using a timing system today. all of your written testimony be printed into the record and its entirety. we ask that you limit your oral testimony to five minutes. captain, we will begin with you. you're welcome to put deliver your opening statement. capt. samuel: good morning chairman ossof, ranking member johnson, and members of the subcommittee. it is my professional and personal honor to participate in this proceeding, regarding the deficiencies in privatized housing provided to servicemembers and their families at fort gordon, ga by -- as well as other committees are at the estates army. it is provided by balf our beatty communities llc (bb), and the personal experience that my family and i have had while residing on post in balfour beattymanaged housing. a brief history about myself. i used to be an intelligence analyst prior to my commissioning as an officer. before my service i worked as a banker for wells fargo and jp morgan chase. i have a family, wife, three children my oldest child is , nathaniel, who is 14 years old. i call him my pride. i have a second child, cheryl and the subject of today's testimony. to my family and service-my life to be rather full and familiar -- fulfilling. my daughter -- the mistreatment and negligence she was subjected to, august 2019 up until february 2021. prior to that my family and i had never resided on any military installation. i had resided on a military solution to my father and mother , i do not recall ever seeing the types of conditions that we have lived under what we are at for corded -- fort gordon. my daughter's experience is life altering. it will haunt her as well as those for the rest of our lives. she is diagnosed with a condition called severe topic dermatitis, it's -- while resided on post, my daughter, prior to her condition was a very exuberant, bright, social, amicable, willing to talk to anyone. stranger, failing member, friend. due to her condition she is resident -- reticent and engaging with anyone outside of her circle. the literal scars of her experience haunt her and play kirk to this day -- plagued her to this day. always seek is to provide the most factual, personal testimony that we can hear today. i am very proud i can stand here and stay here before the subcommittee and everyone present that i represent my daughter and my family. because, i am the person that can sever for her. i am the person that can truly show the world the narrative of will we had experienced what we resided at fort gordon. it is my desire to ensure that everyone on the subcommittee is fully aware of the circumstances to include a timeline, key individuals, locations, folks who are employed by buffer beatty as well as certain numbers of the garrison admiral court as well. it is my desire to bring it to light as conclusively as possible that way executive decision can be made that can positively impact families going forward. unfortunately my daughter will still have her condition and indoor. -- indoor. >> you will need to act -- activate your phone. >> chairman ossoff, ranking member johnson, and members of the subcommittee, thank you for we moved into our home at august of 2020, after moving in my wife and children started experiencing a wide variety of ethical systems -- symptoms. after we realized -- the first major work order we reported march 4 20 .14 water heated -- 2021 for the water heater. it caused the entire house to smell of gas and water rushed onto the mechanical room and hallway, i vacuumed as much water as i could, afterwards the maintenance is revisor insured us was not possible for bold to grow in the area and not worry. this was the first time we believe that the work order history did not reflect his true state of affairs. the technician noted that he had placed a fan and picked it up at when actually i had placed a personal fan. issued -- issues with the work order had continued while work-at-home. issues would have been -- when report the issue is unresolved a new ticket will be opened. the maintenance database then looks as if two different issues arose when reality a superficial fix occurred any new work order was created. on may twice seven we discovered -- 27th we discovered waterlogged trim and placed a work order. when our issues were still not been resolved we contacted the armed forces housing advocates and with their involvement we located more moisture and mold issues. i reported our issues to command a local congressional represented. on june 11 we emailed alpha beatty to profess -- to request a professional mold test. they did not acknowledge the mold or arrange a test. we were frustrated with delays and dissent test to a lab where was confirmed that mold was can -- was present. they dismissed our concerns, we were told that the mold in the wall was just a burn mark. on june 24, a licensed mold tester inspected our home. it was not until this day and environmental work order is put into the system for weeks after we originally reported our concerns. there report dated -- elevated moisture levels found and square feet are full -- of our walls including bathroom and kitchen. balfour beatty then hired another person to review this report and they issued a new report that simply stated some issues could wait for a change of occupancy. on august 4 we were displaced for the first time, he hoped that our problems would be resolved, after moving back and for weeks later we found many issues unrepaired. there was even visible mold in the kitchen. work was completed with band-aid fixes or ignored altogether. we reported the remaining issues via the residential portal and the work order was changed to the cap -- category carpentry. the issues were ignored, closing as completed and never indicating that mold was present. shortly after moving back in the family and i continue to esperance medical problems -- experience medical problems. we discovered mold growing on the wall in the kitchen, a technician said there may be a slab leak on the foundation, but we have government provided a complete scope of work. we were displaced for 12 weeks. these display vents caused -- displacements caused a great amount of stress. i was also passed over a supervisory role due to the family housing situation. i agree that -- leave that if the general upkeep of my home had been taken care of, our displacement could've been prevented. while hesitant to tell the family story of how they treated us, i remain hopeful that congress will address will military families around the country contingent experience. a military family should not be forced to live in fan -- fear of their own homes. chair ossoff: saint -- thank you sergeant torres,. >> mr. chairman, ranking member, and distinguished members of the subcommittee, thank you for the invitation to participate in today's hearing. and for allowing the armed forces housing advocates share the stories of thousands of military families that have been impacted by the systemic families of the military founding -- it is a nonprofit organization that was formed out of necessity to provide direct advocacy services the military sit -- family services. since may 2021 we have assisted 1500 families residing in the terry housings, -- military housings. we take a grassroots approach to advocacy that gives us a unique view of the current process and procedures across an estate -- the united states. i've seen environment hazards like mold, lead, stresses, raw sewage being improperly handled by on trade staff and workers being closed. for service members in tears in fear of losing their careers. i have seen denied in its requests and closures of work orders simply due to them not wanting to foot the cost of completing necessary maintenance and repairs. at wakeman air force base large tree limb fell on a car that moments earlier held an infant in the car, the request to remove the dying tree had been denied a month earlier. the way in which individuals with disabilities are treated and this overwrite consistently violated. disabled military families are being faced with excessive red tape when asking for reasonable accommodations for homes. excessive request for documentation as well as the length of time for a request to be approved violates the law. it is in its usable data military spouse needs to be saved by our husband because balfour beatty refuses to provide accommodations for the bathroom. the service member should not be in constant fear of leaving for training or deployment because his wife is unsafe in this home. i have seen second injured military families -- sick and injured military families that been dismissed repeatedly when saying their homes make them sick. a child tested high -- for lead in their blood. higher than allowable levels of lead-based paint based in their home. they denied it was responsible and -- that home is still available for unsuspecting families to move into today. these medical conditions and only harming our military families, but also costing tricare millions of dollars in medical care that could be avoided if the homes were properly maintained. the issues i cited are only a small portions of the problems and are you not unique to one installation or location. they are mirrored from one to the other. they often claim the problems we see our regional with a few bad actors. we strongly disagree with this notion. when corporate leadership is directing the action of local employees the issues are inherently systemic. a little over three years ago i sat in this very building listening to the senate armed services discuss the deplorable conditions including those run by balfour beatty. how may more cases of negligence , fraud, civil rights violations as we presented this building before they are properly held accountable and banned from receiving further government contracts as well as removed from the current partnership of the department of defense. they have already admitted to defrauding the government. it is not just the government suffering in this case. it is a service medicine their families. they're the ones being forgotten, pushed aside, made sick by a company that chooses profits over people. when our servicemembers are being exploited by the companies promising to protect them howard troops are not operationally ready -- howard troops are not operationally ready. no service members should be losing sleep on deployment. no service member and the family should be homeless while serving this great country. it is time that our servicemembers and families are treated with the indian respect they deserve. the military -- dignity and respect they reserve. we believe the ending the partnership about for beatty's only way to ensure the readiness of our service numbers and the safety of their families. thank you. chair ossoff: we will not hear your opening statement, please -- now hear your opening statement, please. >> mr. chairman, ranking member, and distinguished members of the subcommittee, thank you for the invitation to participate in today's hearing. my name is jana wanner. i am the proud spouse of my husband, who is in the army, and we have been married for 12 years. my husband is a sergeant first class, and he has been in the army for 15 years. we have 2 children, one with special needs, who is enrolled in the department's exceptional family member program. like most military families, our family has moved often. we are currently at our 5th duty station, but at ft. gordon for a second time. during our first tour at ft. gordon in 2013, we arrived from germany and did not have enough time to look for off post housing. after waiting in a hotel for over 2 weeks, we were offered a home that had an active leak from the refrigerator, cigarette butts scattered on the stairs, as well as dirt and roaches on the kitchen floor. when questioned about the condition of the home, the balfour staff member stated that roaches are normal in georgia, and that the contractors must have accidentally left their used cigarettes behind. over the next few months, we had frequent work orders to include leaks, mold issues, an air conditioner that did not work properly, and at one point was declared a fire hazard. after 5 months living in these conditions, we moved to a home outside of the installation. i began my advocacy 4 years ago while stationed in maryland. after our own experiences as a family with lack of appropriate accommodations for our daughter, and mold issues in our home, i decided to speak out about the conditions military families are living in. after returning to ft. gordon for the 2nd time in 2019, i started hearing from military families living on the installation with various housing concerns. myself, hannya webster, and chrissy dykes, created a private facebook group that is specifically for ft. gordon families with housing issues. on average, each month, we help dozens of families with the ongoing problems with balfour's mismanagement of the homes on the installation. lack of prompt response to repairs such as leaks, and mold, as well as lack of transparency about the waitlist for on post housing, sewage leaks, or pest issues are things we hear about frequently from families. work orders for maintenance requests go unaddressed or ignored for months at a time in some cases. more specifically, one resident has had work orders open since december 2021, requesting repairs to their master bedroom ceiling with water damage. the ceiling appears to be caving in from the damage, but maintenance has not addressed their concerns since putting the work orders in. several other residents have reported similar experiences with leaks causing water damage, with limited communication from maintenance about repairs, and work orders have been left open with no timeline given for repairs. when residents have requested a move-in checklist to document pre-existing damages, housing staff has stated there is no official form to document the damages. residents are then told to send an email to the housing office with photos and descriptions of the damages, and these will be kept on file. however, after several residents reached out to confirm their emails were on file to prepare for a move out inspection, they were told their documentation was never received. ada accommodations requests, or other reasonable accommodations requests, have been ignored or denied. there are currently no standard proof requirements for accommodation needs. balfour is inconsistent with the information they request to prove the need for reasonable accommodations. some families have made reasonable requests for accommodation and were promised one level homes, only to arrive to find out the home they were offered was not a one level home. other families have requested ada homes due to the medical need, only to be placed on a several months long waitlist due to balfour not leaving the homes available for need based families. the fear of retaliation by balfour, and a lack of clarity on how to report, are common reasons that have prevented families from reporting their issues. residents have frequently discussed what is sometimes described as verbally abusive staff that deter them from speaking up any further. for families that have never lived in military housing before, the process to dispute is even more confusing and unclear. the tenant bill of rights and the dispute process were well intentioned. but more oversight is still needed, such as more thorough inspections, that are not just based on cosmetic appearance of the homes. also, ensuring that families with special needs do not have extra layers of red tape to have access to ada homes, or reasonable accommodations. military families make sacrifices every day. a safe home should not be one of them. thank you, senators, for the opportunity to testify, and for addressing the health and safety of military families. >> thank you for your opening remarks. i will not recognize myself to begin questions of our first panel. i want to thank you again in particular for joining us and for your service to the country. captain show you recently deployed with your family to camp humphreys and south korea and you just flew 7000 miles on a 17 hour flight to testify here today. can you take a moment and explain to the subcommittee why you felt it was so important to be here? if you can make sure your microphone is close enough to capture your remarks. capt. samuel: it is quite simple. my daughter. no one else will speak up for my daughter. no matter how may times i spoke up for my daughter while i resigned on post, especially notifying buffer beatty drug dozens of -- throughout dozens of interactions, work order, in person, on phone, so these manager it was often not. the reason why i'm here before everyone is because my daughter is still under the same health conditions she initially contracted due to the home itself. we are informed this is a potential lifelong condition. it is also a potentially fatal condition if she is exposed to the right circumstances a black mold and mildew that proliferated the home resided in. the timeline that we resided in their is from august 2019 to february 2021. my daughter, her skin, once youthful and supple is now reptilian in nature. to where there are numerous times and she would wake up in the middle the night, hands covered in blood, from her scratching while sleeping in her bed sheets covered in blood. how do you explain to an 8-year-old child why she should endure some like that. if it was something my wife and i could control we would take responsibility and do the best we could has parents. the conditions we resided in was due to outside factors beyond our control. primarily champing reppo for beatty who provides -- primarily championed by balfour. is very important that i'm here today, regardless of however much time it takes for me to fly from one part of the world to the other so i can provide the accurate truth of what we endured. my daughter's condition is to the extent that she receives a very powerful and potent injection that retails between 2000 to $3000 from july of 2020 one to february of this year she received injections twice a month. if my military service was to be can -- concluded prior to a time and, what happened to my daughter? we would be potentially paying over 70 to $100,000 of out-of-pocket inspection -- expenses due to circumstances she was exposed to outside of our control at fort gordon through buffer beatty. i cannot convey to you any more strongly how much this has impacted her. her sense of self, worth, of who she is has forever been changed. she is a very vibrant and socially young lady. now she is withdrawn, reticent, she has thought counseling -- thought counseling services through school. terry counseling services as well to include -- military counseling services as well. it goes without saying, that this is something that is always on her mind. there are times when normally, most parents would ask how was your day today, weapon at school, was your homework -- what happened at school? how was your skin today, are you itchy, are you bleeding, show me your rashes. she resembles a burn victim at her worst. at her worst, ebbs and flows because her condition will subside and then flareup periodically every month or two months despite any injection we provide her. any ointment or topical treatment we provider. chair ossoff: hedrick daughter ever had rashes like that -- had your daughter ever had rashes like that prior to moving into the home? capt. samuel: she exhibited them only after residing at the fort gordon. chair ossoff: with your permission will some of the slide that shows some of these symptoms. you can take that down. he went to see an allergy specialist on post a number of times in the early months of these symptoms developing. what were you advised by medical professionals? capt. samuel: the medical professional at a time, informed my wife and i that at first, he asked if certain factors were in play. if she was exposed to the only other two allergens, a mild allergy to cats and dogs. we responded promptly no, we do not interact with any pets. it was shortly afterwards, after conducting a series of skin and blood tests that he determined that she has the allergy, or the condition for a topic dermatitis. to such an extent it was severe. we were informed alarmingly that was potentially fatal. chair ossoff: you then raised the issue, they said they did not find mold in the home. was at the end of your concern with mold or did you continue to raise the concern with them in the months that followed? capt. samuel: i fervently brought my concerns in one form or another via communication, telephone, in person, or email curve respondents in the very beginning up until i departure from the home in 2021. chair ossoff: during this period in the middle of .21 -- 2020 you are -- were reporting, we doing that mostly in person or by the phone? capt. samuel: can u.s. the question will return? -- can you ask the question one more time? we provided the work orders via the portal available, once we notified the condition, we submitted a work order for mold, we were told the test was inconclusive. we continue to press the point, we were told to contact the manager of the balfour beatty organization directly. i was handed their business card, i would head to indicate with them directly or with their staff. i attended to numerous times. chair ossoff: we are instructed by personnel that you should moving forward raise these concerns directly, verbally or by phone rather than the online portal? >> correct. chair ossoff: they said the places directed by person or an phone. capt. samuel: yes, not just a supervisor come as a manager of the balfour beatty community. chair ossoff: we will dig more into your story, i will yield in just a moment, i would like to ask you to turn, to exhibit two. this is an email that you sent to ms. paula cook at balfour beatty. chair ossoff: yes -- month-to-month later. after your request for assistance in your home had been ignored for months. you had been instructed to place those requests verbally or by phone. at the advice of your doctor, you saw to break your lease, balfour beatty saw tube prevent you -- soft to prevent you to break your lease. you had to engage the chain of command. he had to live for months in a home with mold, you are finally able to gather home. capt. samuel: that is correct. chair ossoff: we can get into how they pursued you for collection. i want to ask you to read. the final few sentences of the second page of this email. beginning with -- i am just a soldier. d.c. that -- do you see that? in the middle of the final paragraph. capt. samuel: i am just a soldier, husband, father attending to reconcile -- reconcile why this has a place. you, miss cook, along with your representatives could a compass much more get this far have chosen not to. chair ossoff: thank you, at this time i reeled to the ranking member. ranking member johnson: monday my first questions answered, it -- one of my first questions answered, is your daughter be improving, it does not sound like it. capt. samuel: no senator, she is not. ranking member johnson: a number of you mentioned retaliation, that would be retaliation by your command, right? i want to understand, the finger-pointing, the shifting responsibility in terms of what all transpired here. your daughter was treated by military doctors? capt. samuel: she was treated initially on post by military doctors and treated off post as well. ranking member johnson: do the military doctors, do they assign a cause to her skin condition? two they say this is typical of a rash brought out by mold? capt. samuel: only in the initial period. the epidemiologist made the determination it was something triggering her condition significantly, if she is going only to school and home, has to be at the home or school. ranking member johnson: did the doctor anyway in the medical clinic try to follow-up what the conditions were in the home that might have given rise to her skin condition? capt. samuel: he certainly did, he followed up with myself and i. we corresponded on phone and email dozens of times to pinpoint the cause of her condition. he surmised at the beginning, but then i want to influence me directly or indirectly that it was the home itself. ranking member johnson: did he then advocate for you to the base commander? capt. samuel: no we did not. i had to go through outside channels. it is the garrison command that became involved. ranking member johnson: who is responsible garrison command -- what was your response and garrison command? capt. samuel: i was told by the garrison commander and garrison sergeant major they thought it was unfounded and that my daughter's condition was not predicated upon being exposed to mold at the home itself. i was quite accept about -- upset about. ranking member johnson: they dismissed any connection between housing to daughter's condition? capt. samuel: this was after several months of the garrison command team to make an executive decision to find the move off post or break the lease at the time, that is correct. ranking member johnson: your only channel of addressing this was then to go to balfour beatty ? you are pretty well left on your own to deal with the situation. you got no help from your base commander, garrison commander, anyone in the military chain event. capt. samuel: the base commander, i do not believe was aware my family. -- between him providing memorandums on what my daughter's position was. i found that the physician was only tied because he could only do so much. he was not a person of influence. he could only provide facts and findings to whoever review information. i had to my direct chain of command. they in turn determined that this was unwarranted and the influence he changed that let us ultimately break our lease and leave the home itself. ranking member johnson: in the end you did get help from your chain of command in at least getting out of the housing. capt. samuel: after much effort, yes. ranking member johnson: did someone else move into the house? capt. samuel: tech. sgt. jack: immediately -- capt. samuel: immediately after. ranking member johnson: what type of runaround did you experience? you mentioned retaliation, can be marks -- more specific as you try to get your issues addressed? i see from your testimony, your family expressed a wide range of symptoms. tickles -- get close to the microphone as possible. capt. samuel: i told balfour beatty about all over issues and we try to get it addressed. we contacted the government housing office. even with contacting them and the resident advocate on the base, we were selecting the help we needed. eventually. ranking member johnson: just back up, describe the government housing. tech. sgt. jack: we notified the government housing office. ranking member johnson: is that the military chain of command? tech. sgt. jack: they report to the base and wing commander. if there is any issues we address the government housing office and we advocate to help us out to contact housing. balfour beatty in terms of, hey there are issues with the homes, can we get these issues addressed? even with contacting them yet the content -- constantly email them. we have to request for day to show up to the inspections -- for them to show up to the inspections. we have issues in our homes, can you please show up? we had to resort to requesting an advocate at an army base an hour away to get any help. sarah klein has done more help to us for our family and another base and an army post than the advocate in the out of -- government housing office in my base. it comes to the point where, where we were being dislocated, my commander notified me that i was being dislocated. i had not even heard from, he was trying to get information because he was not in on any of the information when that is the government housing office that is supposed to be telling the wing commander base commander about our issues. he did not know nothing about our issues. ranking member johnson: is it fair to say the government housing advocate did not do much advocating for you? tech. sgt. jack: no. ranking member johnson: bluff your concerns -- blue off your concerns. tech. sgt. jack: as correct. -- that is correct. ranking member johnson: can you summarize what you are seeing, is this typical that is just a big runaround, is a bunch of finger-pointing and not get much done? >> absolutely, these are cases of systemic issues in their homes, even something as simple as, i need the toilet recaulked because it will start leaking. you cannot get somebody out your home to fix that in a timely manner. if you do try to seek assistance from the government housing office, they will tell you, flat out, that they have no power to force balfour beatty or any of the housing companies to act in your home. that their scope is limited. when they go up to the installation level to see jag or an advocate on the legal side, a lot of the families are being told, maybe she could a lawyer. from the base legal offices, which is not something that we need military fave is -- families concerned about or a process they should be having to go through to get simple fixes in their homes. ranking member johnson: i am over time, the phrase he just used, the agencies within the chain of command that should have the power are telling members of the military they have no power. i think that is a keeper right there. -- key part there, is that true? why hasn't the military empower them to make this right? chair ossoff: thank you make -- ranking member johnson. >> i had a opportunity to personally welcome and greet our witnesses a few minutes ago. we have a number of hearings and committees and subcommittees, i have to be in and out of your. thank you and welcome. i am a retired navy captain, serving in the u.s. senate, i have been privileged to live in military housing in places around the world. two percent the dover air force base has a congressman for 10 years is that are for 21 years and as a governor. our community loves the dover air force base. there's something called the abilene trophy, it is an award that is made to communities every year around the country, communities that have gone the extra mile to make sure that the men and women of the air force in that community are welcomed, loved, and we take really good care of them. i do not think there's any community in america has won the abilene trophy more than dover. it is something that part of our dna. i do not know if it -- know of any air force base that has one of more than the dover air force base. we have c-17's, is a place where most people know of dover in this country, the remains of our fallen heroes are returned to this country from abroad and they are reunited with their families. we care a lot about the folks out of their. i remember a time, earlier in mice -- in my public service. on-base housing, thank -- families could stay in. it was ok, but not great. the same situation around the country. a lot of government housing, some of it was pretty good some of it was not very good. it was during maybe the reagan administration, i might be wrong and the timing, one of our administration's decided we ought to try something different. if you can provide better housing for our families. the idea came up with a public-private partnership where the private sector would build and run largely the base housing in partnership with a local commands. a good idea. a good idea. a lot of bases, it has worked just fine. in some bases, including dover not so well. we had a hearing three or four years ago from families on our base that some of the problems with mold, leakage in, that kind of thing. was that kind -- was a concern and families wanted something done about it. the company that was -- at had the contract for housing at dover air force base was not responsive to those concerns. we worked very closely with the commanding officer of the base, the wing commander, and others on the base to make sure that the families received what they deserved. we also pursued this with the committee jurisdiction, about two years ago the armed service committee passed legislation at my urging, at the urging a lot of folks around the bases around the country to better ensure that this model of providing housing for families was improved. the constitution, that was adoptive -- adopted five miles from the dover air force base, starts off of his words, we the people of united states in order to provide a more perfect union. the idea is that everything we do we can do better. the expectation of those that can -- that supported the change in law, the national defense act, we have to do this better. we have to do this better. this hearing is a good opportunity to get some oversight on the work, the good work, that was done in a bipartisan way to years ago. that was a preface. i want to jump to a question or two if i can. for the witnesses, the captain, in your view, where the reforms adopted by congress to the defense authorization act, two years ago, where they satisfactory, have they made the kind of differences we'd hoped for for military families? capt. samuel: no. >> tell us more, i like being so psyched it's a sink. capt. samuel: if we have black mold in our bathroom behind the walls, on the ceiling, on the shower curtains, in the children's bedroom, we have used every and every -- avenue of commute case in the state this is a ongoing concern. if balfour beatty is that acutely aware that my daughter has a serious health condition predicated from this i get no response and at certain times we are told we are lying about this. conclusively, no. >> let me ask, i want to get your rank right, just go ahead and tummy. -- and tell me. same question, you spend a lot of time in committee jurisdictions, trying to get to the root cause of this problem the fix-it. in our base, the wing commander says you have a responsibility to do something to fix this problem. to take charge, that's what happened in my base, dover, go ahead. tech. sgt. jack: even with all of our issues, with the base commander, wing commander involved it seem like they did not have the power to, because we requested to move to a different section. they could not get, did not have enough power to move us to a different section. all because i did not have the rank required for that section. i said i would even make the difference in terms of money from my own pocket so we would not have to live in an area where mold was known to be in. in a certain area base housing. >> same question, in terms of the change, balfour beatty expected in the 2020 legislation. rachel: i was really helpful when the tenants bill of rights and those pieces of legislation came down. our team was excited to see the mentation of them. it is not working. we have 10 page leases that are now 110 page leases that military families have to read because they are trying to create state -- create a universal lease to simplify things but exacerbated the problem. the formal review process is 48 steps for air force service members. you need to take 48 steps to do the formal dispute process. that is an acceptable. the families that we are seeing that try to use the dispute process or are trying to say, we need a habitable home because the tenants bill of rights guarantees a habitable home, the cows and company will ask the definition of habit ability. we have such a broad language in that, especially with industry-standard, you are expecting industry-standard, that is not across-the-board. the oversight features for a commander, i would love to say i have seen that go well. that is where we see the most retaliation. now those installation commanders are not all bad actors, but there are some that see this as a number they are trying to not rack up on their installation for complaint because it is going directly to their leadership and reflect poorly on them. i have witnessed information -- installation commanders give false information. they are not people who should be giving that type of information and trying to sway an individual one way or another to stay quiet. >> i am out of time, i will ask you to answer the same question for the record, in the weeks to come. i think this is an important hearing. the issue is, why, haven't the forms that were adopted two years ago worked better? if it is a perfect, make a better. there is work to be done here. i think this subcommittee can provide important oversight and work in conjunction with the authorizing's committee the armed services committee. a huge number of jobs have been created in the last year or two. one of the questions i always ask when we go to a base and we were the wing commander, i ask how they doing with retention and recruitment. one of the keys is how happy is the family. how happy their family is is where they are living in the living conditions they face everyday. this is a recruitment and retention issue as well. chair ossoff: senator hassan you are recognized for seven minutes. >> that you very much for this hearing, think the witnesses for being here, or your service, and your willingness to speak out about such a critical issue for so many of our servicemen and women and families. i am deeply concerned by the testimony we have heard today and the impact similar conduct may have among my constituents. the shipyard nearby, private military housing is also managed by balfour beatty miss christian and miss wanner, you've have talked about this a little bit right now. how widespread is a missed contact by balfour beatty and other housing contractors? rachel: you will see it at every installation you go to. 55 installations, i've have not come up with one where i've not seen an issue with work order closures prior to completion or any type of mistreatment of military families. >> thank you miss warner. >> i agree, it is widespread all over. work orders will remain open for month of the time. i want to dig into your experience to better understand what additional actions congress may need to take. you, that your request was misclassified. to your knowledge, did the work order system retain any information about your original classification of the repair request as another request instead of a carpenter request. >> no, originally we look at the report. it would be classified as one and maybe a day or a couple of weeks later, the title will be changed. in terms of my background, i'm an h-tech. heating and air conditioning technician so i'm working on work orders all the time and i'm able to track and look at this kind of stuff and i know for a fact that if a customer puts in a request for a work order, the time should not be changed and it should not be closed before completion. you always have to verify, hey, did you fix it? if it's closed then you reopen the same report. at least that's how it's done in the air force. we close it and open a new one. >> you are saying that no matter what you put in your official report, they changed it and said whatever they wanted in the request records? >> yes, by changing the title. even the date. the date was opened, the date was closed. any remarks and all that stuff. we have screen shots of the report history. it being one thing and the dates and everything be changed on another and it would never match up. to this day the work orders are still being changed and i receive text messages that thework orders are being closed out. even though we've been displaced for 12 weeks. >> so i want to follow up on what you just said about closing out the orders. you had said that the orders would frequently be closed or work orders be changed of fixes were complete but without consulting if original ones resulting in different ones later only. did this force you to keep work orders open when you believed issues were not adequately addresseds. >> we didn't have any control over if the work order was closed or we could reopen it or not. all they would pretty much tell us is open a new work order. >> that is deeply troubling and concerning. work orders are there to help residents get their problems fixed and and a resident doesn't believe it was adequately addressed, she should be -- they should be able to keep it open until it's completely addressed. i want to turn back to families with disabilities. you highlighted the struggles that military families with disabilities frequently experience. in includes requiring excessive documentation to prove the disability, making it extremely frustrating at best to request accommodations. what, if any, information does a -- does ball four beady give about the process for military with disabilities before they decide to live at a balfour resident. i'll start with you, ms. warner. >> apparently there are no standards that ball four offers so families. they ask for things such as full blown medical records and there's no -- even just a standard form that the million provider can sign to see -- say if the family has any a.d.a. accommodations or special requests. there is a waiver that can move families up on the list but they are discouraged from using that waiver. >> how are they discouraged? >> i can tell you special -- personally, our family is going through that process right now and the regional manager assured us that if we sign that waiver that every military family has been waiting on a house in that naked, if they moved ahead of them, they would come after us. >> wow, ms. christian, anything to add? >> we as an organization phenomenon what the fair housing affect says and how families should provide medical documentation. there's no real way for them to do so to -- so we follow what federal law is. even with documentation stating that there is a disability and what the accommodation requests are, those are still denied by local levels and it's a violation of their civil right. >> and it is really disturbing that a contractor for the united states states military, that is supposed to serve the men and women who serving all of us and keep us safe with our families is not complying with london -- long standing federal law and there are present mr. of examples of how to meet the adam -- accommodation needs of families with disabilities. this is not new and i look forward to continuing to work with all of you to make sure we make significant progress here. thank you. >> thank you, a.? kevin, i want to come back to you for a moment. , you've been requested to submit not via the lonline system but via verbally or by the phone, correct? >> that's correct. >> as your $'s health conditional continues to worsen, what response do you get? >> no response. >> and am i correct that your doctor's physician shortly there were advised you needed to leave the home. >> that's correct. >> so u.s.c. instructed that under place these requests verbally. you've done so repeatedly. your daughter is sick. you've seen mold in the home. you've seen no response. your doctor tells you to get out of the home so you approach balforur to break the lesion. what is their response? >> i asked them if i could at least be provided another home while they mitigate the conditions of the current home. we were denied both and balfour stated that we would so to stay there in order to honor the lease at that time. >> so your doctor -- daughter has now a severe determine that logical condition. balfour tell you can't get out of the home. >> yes, it went to something called an isles comment, a very serious comment system where we can provide feedback, good or im. in this case it was definitely not a positive feedback that i provided. teddy terrorism was the gentleman's name to -- who told me that basically we would have to continue to reside in the home and that there were no other homes available or essentially no other options available. i responded in kind by saying when i would i would -- i was told personally specifically in february of 2020 when our home had the initial test for mohammed conducted she handed me her business card and encouraged me to contact her verbally or coming by the offers. id a hered to that as strictly as i could but in the interim my wife and i submitted work orders and whenever work was done, a cab net door, whatever the case may be, we told them there were mohammed upstairs, in our daughter's room and in the bathroom. we were told every single time that the mold would be addressed by the management and that the% would be in contact with us at some tonight point in time, that never took place at any point in time. >> so you get no response, you're told by balfour you need to leave the home. they everyone ape cushioned you of lying? >> yes, in january of 2021, i was at the moveout inspection. but the day before there were a couple of things that still needed to be addressed that hadn't been. i made sure a balfour personal dame out. he fixed the issues. there was like a broken bulk and something else. i rimmed up the bathroom lining of the bathroom and purposely chipped away at the paint in the wall and showed the blackened paint chips that the mold has prolive rated in and i statemented this is the mold we've been campaign complaining to you folks about for months on end. i ask that you notify your facilities manager tom rodriguez top this addressed as soon as possible. following that, my family and i -- not my family. myself and my command all had a discussion as to how we can come to a compromise. therefuls no compromise. essentially we needed to get out of the phone. we were seeking to have our might have funded -- both denned our questions to fund our move, at which point we had to move out post. to i would prove the garrison command team is and my wife was seven months pregnant and is moving things on her own because none of these organizations will pay for our off-post move. i'm not lacking as far as financials but it's the principle behind it. if our home is the source of my daughter's condition and we have been told that we need to move off post, it means we'll move off post but the principle behind it is someone should provide some support. >> so finally with great e. engaging the garrison command making repeated requests, you manage to get out of the home, you send an email documenting your experience. you read a portion from that. did you receive an apology from ms. cook involving in email? and i have never received an apology at nil point in time. >> did they will threaten to send a collection agency against you? >> to add insult to injury, yes. >> did you say there was a mistake? >> yes, and i said there's a collection act purposely sent to me. if there was an internal error this should have been caught prior to distribution to my home. >> thank you. i want to dig in on one specific aspect of your capes your wife suffers from a respiratory condition, correct? and you have repeatedly asked balfour to reimmediatate the mold in your home. there is no response. finally they send an inspection company. they find that there's 175 square feet of area in your home that needed to be reimmediateuated or replaced. correct? >> correct. >> at the same time balfour has hired a second company and they said the remediating of the mold is premature. correct? >> correct. >> but they go ahead and reimmediatate the mold. slide four. you placed these work orders upon returning to your home and you reported mold, correct? >> that's correct. >> those are your work orders. you describe mold on floor behind hall bathroom and mold under the rec room, correct? >> that's correct. >> i'm going to ask that five be indicted -- depicted. here at the bottom, we have the internal cata from their yardi system and they clasped your request as carpetry. so you've placed two work orders for mold in the home. those are filed internally as carpetry. enclose the slide. ms. christian, what are we looking at this? >> what you're looking at is what you'll see at all of the insulations. they are taking what is a hazard in a home and making it a simplified request so what've that when the seven-year maintenance history or any of the information is provided to the next tenant, it's not going to be correct. also, it's way easier to close out of a carpetry request nan it is to close a full-scale mold mediation. >> i now yield seven minutes to senator langford. >> thank you. thanks for being here. i have a good feeling that none of you want to really be here because of having to walk through all of this and the frustration of it. thanks for being here and speaking out and representing the voice of a lot of other folks through this process. i want to ask you a question that's been asked before on this. when the command leadership was taken out of the evasion equation, they lost an advocate. other advocates were supposed to be there but weren't. why? >> this varyies from branch of service. the type of advocate you have to insurance place. but none of them we've come in contact with have training in housing so they were not equipped to understand what an inspection should look like. for example. north carolina. there are certifications for home inspections but the person who is supposed to be your advocate is going to work through your home and tell you whether or not something is awry in your home and i've seen them miss gas leaks, miss mold, miss lead chipping and they walk through a lot of the times with the housing company themselves and in this case they lean on balfourbeatty's assistance to understand what's actually going on in the home because they are not trainerred. >> so what are you suggesting? some sort of state or federal certification? >> absolutely. an industry standard. they need to follow state law, so someone who would be providing the same type of inspection at another facility off of things inenings -- inspection, they need to be trained in understanding the state law, the fire code, anything that you would need if you were to inspect. >> would you put that person under the authority of your demand -- commanders at that point? somebody they answer to for it or who do they work for? >> personally i would hope we'd have a true third party outside of the partnership. this is. no just a contractor. these are partnership between the branch of service and the company. if you do report directly to them, they have an incentive to have their partnership functioning. so there needs to be a true third party outside of that. >> ok. so balfour in my state. lack land and then altus air force base. altus was put into a grouping of different agencies which tindal ll was one of those. obviously that getting destroyed because of of a hurricane, they're going to get the attention. so altus is suffering the consequences of a hurricane on the other side of the country because of the grouping they're in. the local folks folks, what i hear when i talk to leadership on base, they're pleased with the turnaround that balfour has had in the last couple of years. in 2018, all the issues, nonspongessive. at altus we continue to be able to get band-aid fixes for things that should be able to get replayed or just cannot band-aid fixes. two big issues are here. one is trying to balance out whether it's a hurricane in one area so every other bails gets push -- pushed because of in or how do you deal with the issue of band-aid fixes that are actually repaired so this isn't a new sans on those families. any idea on those? >> if you don't provide a band-aid fix and you provide the correct fit the first time then you're not inoccurred the cost of trying to go out and band-aid fix the problem. >> i totally get that how can we make sure this is something that actually gets repaired or replaced rather than just a watch patch on it? somewhere there's got to be able to be accountability for the resident to say i know that's not going to work. >> i believe that was the spent of having the government housing office on the installation to do that. but residents need an oversight tool they can report directly to outside of the installation and outside of those employees. >> i'm running out of time. i want to ask you this as well. you've lived in other place that is weren't under balfour. what was it like comparatively? >> i've been stationed two other places and never once had any issues, especially where they know my background, they know what i do. they've always come with the work order and would be from right watched they'd come out and fix it, no issues. my never had any problems. i could be at work. i've free throw deployed twice, three times and never had to be worried. i'm a constructor and every time we put a work order any had to be there because my wife was worried they'd blow her off. they didn't want to talk to the spouse. they wanted to talk to the military person because fix something wrong they could go ahead and tell my little and i'd be in trouble for it where it shouldn't be that way. my wife is a stay at home mom. my wife is scared of being there with a technician. >> totally get that. should be respectful of that. by the way, she's a resident of the house as well, correct? >> correct. >> so why would it matter which resident of the house is calling that? you've lived at other places other than balfour as the caretaker for the home. can you compare the two? >> my father in particular has told me clearly if you have the opportunity to reside in post or off post, always choose offpost. i had asked that when i was younger and he gave me sound reasoning. unfortunately this was the only time we lived at the insulation and it will be the last time. >> shouldn't be that way and it's one of the issues at altus air force base. it's old every housing that needs to be redone completely but now we're on the body of the list because tindall is going to end up with all new and altus and the other three bases in that group are just going to continues to get older and older. thank you all for being here very much and -- for your service to the country. >> thank you, senator langford. ranking member johnson? >> thank you. i think part of the problem is the housing that these companies are taking over is extremely old, correct? >> no, i don't believe that's the case. there are some that are older and they have different issues like lead and asbestos but you can look at brand-new homes and they're going to have the same systemic issues that other homes have, especially with the way that they're constructed. they are going to be leaks coming in but no matter what, if you fix a leak, it will not cause problems if you reimmediatate it correctly the first time. no matter if they're new or old homes, famed maintenance is failed maintenance and it's going to continue to occur. >> so at dover air force space he believes the base commander has taken charge of this and is doing a pretty good job. it's never period of time -- perfect. are there some bailses and housing that is in better shame where you don't have these kind of complaints. are there some really -- real problem areas? >> there's definitely larger problem areas and also insulations that are having a better time with certain things. i can find you an insurance last that has better mold than others. there's still mold there, even in the desert. you're going to see it across the board. i wouldn't say anybody is doing it a better way that i can bring to you. i would love to say model everything after this organization because then our organization wouldn't have to exist. we're a 100% volunteer organization that's handling a massive, a massive amount of clientele. >> you gave two examples of what the supposed fix from a couple of years ago leaves us from 10 pages to 100 and to a 48-step resolution procession. any other bureaucratic fix like that? >> there's a ton but just the process in which you need to request any type of assistance is so lengthy that most families are giving up and their homes are going to continuing to dee fear rate. >> i'm the bean counter on this committee so i want to ask a couple of bean counter issues. to my knowledge it looks like balfour is paid roughly about -- 30 million a year for its housing. is that accurate? >> i have no idea of any of those numbers. i would love to know but that's not accessible to me. >> so you wouldn't be able to tell me what is the total government contract amounts for managing this housing? >> no, and we have tried to get a lot of that information through the freedom of information request but it's disproprior tear so we get a lot of blacked-out items. >> ihave run into the same problem when i try to do legitimate oversight so i feel your pain on that. you did comment this was profits over people. do you know what the profitability is? >> i don't know but i will tell you that it has to be good enough because they keep coming back to the senate to hear it and they haven't tried to get away with anything else. >> i'll be exploring that with the whole group from balfour. one of the reasons i ask is, if my information is correct and balforr is getting about $30 million a year to pay a $65 impact a year fine, why even be in that business? how many other contractors like balfour is there? >> there are 14 housing. >> , top five? >> balfour. liberty military housing. corbius hunt and i can't i have to the other. >> does your group find nip difference in terms of the level of management in any of those companies. are there some that are heads and tails above the others? >> no, if you took balfour systems beatty out you can interchange them with any of the other companies and of those that are horrific for residents to live in, they were the worst. >> so if i'm a base commander and i have the power to use free-markets systems that you're not performing, i'm going to fire you and hire somebody else. it doesn't seem like there's someone else to hire to do a better job. >> i continue to agree with that. >> right now there is not that ability, correct? i'm trying to drill down to what is the root cause of this? why does this continue? in a free market there could be. i come from the free market system. i compete against excellence. that means really high level, best service at the best possible price. something is broken down here and my guess is burrow accuratic fixes that don't work. it's not my problem. we're going to pass this bill, turn over here, walk away and the bureaucracy creates fixes like a 100-page lesion, a 40-step resolution process. finger pointing, a big runaround and nothing gets fixed. i'm trying to hone in on what is the root cause here and but you got to have someone to replace it. talk about profitability, is there enough incentive for big companies to come in and do the kind of job we all expect. i recognize you can't really answer that question. >> i would hope there is. you are competing in a market, where i am paying rent to you and if you're not doing a good job, you don't receive my rent. that is not the case for these housing companies. that was something that three years ago they requested was for servicemembers to not be able to have that. does big oversight. >> also sound like this relationship is between members of the military and people working for these companies, is that a common problem? >> absolutely. that is an absolute problem. if you're going to someone and you have a personal relationship with them, they are not going to want to get them in trouble. >> i have no doubt the armed services committee tried to fix this a couple years ago. i think the result of our investigations of this hearing, it didn't work. we better figure out something better to do. i appreciate your testimony, mr. chairman. >> thank you ranking member johnson. this concludes the testimony from our first panel. i want to thank you all sincerely for your presence. for sharing your experiences and information with us. in particular is about want to commend these extraordinarily -- extraordinary active duty service members who flew from korea and texas to join us. and get on the record your experiences and with gratitude, this panel is dismissed. we will now prepared to hear from our second panel. thank you. we now call our second panel of witnesses for this morning's hearing. this to richard taylor is the president of facility operations, renovations and construction at balfour beatty communities, with overall responsibility for the military housing facility management activities, including preventative maintenance, repairs and quality assurance. he has worked for the firm and predecessors for 19 years and worked in the industry for nearly three decades. he previously served in the u.s. navy for more than 12 years. ms. cook just transferred to transformation, for the culture shaping initiatives. up until last week she served as vice president of community management in charge about fort's army portfolio of military -- she has been with the company since 2007. ms. cook is also a u.s. navy veteran. i appreciate both of you for joining us today. we look forward to your testimony. if -- is the custom of the subcommittee to swear in all witnesses. at this time i would ask you to please stand and raise your right hand. do you swear the testimony will get before the subcommittee will be the truth of the whole truth and nothing but the truth, so help you god? let the record reflect that the witnesses answered in the affirmative. we will be using a timing system today. you submitted joint written testimony. it will be printed in the record in its entirety. i understand mr. taylor will provide oral testimony on behalf of both witnesses. mr. taylor, please limit your remarks to five minutes. you may proceed. >> chairman, ranking member in the subcommittee. thank you for the opportunity to provide updates on this -- safety -- across 55 military installations reserve. >> forgive me, mr. taylor, would you ensure your microphone is active? >> is that better? >> it is. thank you. please begin at the beginning. >> chairman allsop, ranking member johnson, members of the subcommittee. thank you for the opportunity to provided update on the commitment of belfer communities to promote the safety, health and well-being of servicemembers and their committees -- and their families across the 55 military immunities we serve. i'm accompanied by paula cook who leads the ongoing transformation efforts. anti-bc, we consider it an honor and privilege to serve those who serve our country. we have a special appreciation for military housing. in 2019, i made a commitment to improve our ability to monitor repairs and respond to problems, prioritize the health and safety of residents and prepare homes for residents before they moved in. i'm proud to say we have made enormous strides since i made that commitment. today, we are responsible for housing operations encompassing more than 43,000 homes approximately 150,000 residents. we partnered with dod to oversee the construction of more than 15,000 new military homes in the renovation more than 14,000 legacy homes. since the start of the partnership, we have had investments totaling $5.6 billion to improve on base housing. for military housing aid agreements is that we act in joint partnerships are required to dashboard eight with our dod partners. our primary focus is providing a residents with safes of quality homes, and main -- prompt maintenance support. we look to support this by maintaining open and robust vacations with our residents. the portal allows residents to view their maintenance orders, are we it's staffed 24 seven to initiate work orders, scheduled maintenance and provide updates. we are committed to maintaining accurate work order data. we do not tolerate anyone falsifying work order information. both dbc and the military have multiple checkpoints new residents to identify issues or questions regarding the home. we supplement this outreach with her own resident surveys. these are conducted by an independent third-party and sent to residents after move-in and after responding to a work order. with a customer service business, we recognize that unfortunately we will never be able to make every resident happy. nevertheless, we remained resolute in that pursuit. in 2021, we received just over 40,000 survey responses, resulting in an average service for a 4.53 out of five. for the. january 1, 2021 through last week, average works quarter was 4.62. with over one third of our military housing consisting of aging units constructed by the military, we will never have homes the present zero maintenance issues. on average that we receive and process more than 280,000 resident generated work orders annually. with any resident housing property, there will always be challenges to face. utility, plumbing, electrical systems will fail, severe weather will cause damage, issues will arise and customer service complaints will surface. our teams have faced tremendous challenges since the pandemic hit in 2020. we are not alone in experiencing supply-chain challenges, home access issues, staffing issues due to the pandemic. however, our obligation is to respond in a timely and effective a manner as possible. we've embraced and voluntarily implemented -- and support of our residents. we agreed to a new universal sponsored lease which includes attendant bill of rights, we instituted a resolution process, we now provide seven-year maintenance histories for our homes. in addition, enhanced dod monitoring of housing is created to ensure housing is safe for occupancy, since it is through government housing inspections before a home is offered. our performance metrics indicate the overwhelming majority of our residents are happy with their home and the service we provide. we are never satisfied, when even small numbers of our residents report dissatisfaction. we remain dedicated to working with our residents, military housing advocacy groups and dod to address challenges. we look forward to hearing from the subcommittee how we can further improve our performance and improve quality of life for our residents. thank you. >> thank you mr. taylor and ms. cook. i understand mr. taylor is offering those remarks on both of your behalf. i will begin with my questions. in the course of this investigation, my and ranking member johnson's teams have reviewed tens of thousands of pages of records, interviewed dozens of witnesses, most of that investigation focused on 2019, 2028, 2021, or the period after your guilty plea. in order to understand which forms of misconduct or mismanagement may be persisting following that resolution at the department of justice. before we get into that, i went to make sure we are clear on the facts related to that doj matter. it is the case, is it not, my time is limited, cover this as concisely as we cans of that from 2013 to 2019, your company engaged in a scheme to defraud the united states, correct? >> the record indicates -- >> the settlement agreement acknowledges that, yes, sir. >> from tray 13 to try 19, your company engaged in a scheme to defraud the united states, why should a company convicted of major criminal fraud, that engaged in a scheme to defraud the united states remain in a position of trust, responsible for the safe housing of the heroes, servicemembers and their families on installations across the country? >> i would like to answer that by putting into context. as you indicated, the. in -- the period in which the behavior took place was from 2013 to 2019, we were alerted to the allegations that there was improper behavior amongst some of our employees, we immediately cooperated with the doj investigators, we engaged our own third-party legal firm, and friends of accountants to understand -- forensic accountants to understand the underlying cause. we provide that information to the doj is that investigation was ongoing. we did an analysis to understand what the repot is where. we did not wait for the outcome of that investigation, and settlement that was reached in late last year to act on the things that we identified were shortcomings within our business. we took quick action -- >> we are going to get -- we are going to get into the actions that would take and whether or not those had good effect. let's talk about what constituted the six-year scheme to defraud the united states, to which belfer pled guilty. i might correct that the scheme included the falsification and destruction of work order record? yes or no? >> it did. >> am i correct that the scheme to defraud the united states included lying the armed services? yes or no? >> you say lying -- >> this is paragraph 24 of his statement of fact, fort made false representations -- balf our made false representations to all four services. c-span.org >> we did not reflect the performance metrics at certain locations. >> am i correct that the scheme to defraud the united states which included the falsification destruction of reporters, also include the closing of reporters to show superior performance in order to secure incentive payments? >> that is a fair statement, yes, sir. >> and it is your statement that despite engaging in this fraud, major criminal fraud, that your company should remain in a position of trust, housing america's military families? yes or no? >> yes, i do. >> that is your position? ms. cook, we will return to some of the later events mr. taylor, ms. cook, i want to ask you about your position. i want to begin by asking you to review for the subcommittee correspondence that you received from service members were housed at fort gordon after the period during which belfort was engaged in a skied -- scheme to does but -- defraud the united states. during which they assured the department of justice, and congress that was improving its performance. if you would please turn to tab 10. you will see at the bottom, customer comments, this is an email you received from attendant in your housing, they did september of 2020. would you please read beginning with customer comments and onto the next day? it is not a long email. >> -- on the next page. it is not a long email. >> i recently retired after 21 years of combined services of this is by far the worst housing i have ever lived in. we had mold in our house under the vinyl floors, in the walls, behind her cabinets and in the vents. and the sheet rock failed in the closet. i was in the mbd process, as sewer line collapsed and we had to move. they gave me one week to vacate a house that was not fit for occupancy so they could work on it. i was forced to move from one house to another. while physically disabled, then in the six months that we remain there, they did no work on the house. the company is unprofessional and should be removed from the installation. they have no clue what it means to run a safe and organized military housing community. the installation leadership needs to do a walk-through of housing and talk to everybody -- every resident. i know several residents that have multiple issues with their homes. nothing seems to be getting accomplished. since i'm no longer in the military, i do not fear retaliation from the housing office. if i had to do all over again, i would not live on base, and would've found a home that are suited for my family. customer has requested a response from management. >> thank you, ms. cook. this is one of many emails you received that we reviewed. here are some quotes from others. urine swain -- urine stains were found in bedrooms, bathroom floors were forming bowl -- bubbles. mold growing on the carpet. death trap of the house. i have a pregnant wife was high-risk risk and i have to live with this, exposed mold on my ceiling. we continuously get little to no response, water leaks in the kitchen. nothing has been done. that is 11 emails you received, all after the period during which balfour was engaged in scheme to defraud the united states. i want to ask you mr. taylor, given your company engaged in major criminal fraud, why should we believe your assurances, we have heard from capt. choe and sergeant torres, we've heard from advocates who described his issues as systemic and ongoing. we just went through 12 to 13 emails ms. cook receipts of my office interviewed dozens of others who reported significant issues with work orders misclassified, ongoing concerns about contamination in ceilings calling in. question we believe that company that gauged a major fraud against the united states is fixing this? >> first about seven icing -- reject the description is a systemic failure. you just read 11 emails, we are in the process of 280,000 emails annually. things go wrong, we don't always get it right the first time. we are not perfect. we've never testified we are a perfect organization, and get right 100% the first time. what is important for ross is that we understand where our shortcomings are -- for us is that we take understand where our shortcomings are and take action. >> my time is limited, my question specific, it is why should we believe your assurances when your company engaged in eight six-year long scheme to defraud the united states. why should we believe your assurances? >> take a look at the actions we took subsequent to that period in time. we share the information with your staff during interviews, we've been very transparent with the services, omd, staffers on the jury we were on to transform our business -- journey we were on to transform our business. we are demonstrating we are taking this seriously, we are taking proactive steps to ensure we don't repeat the mistakes of the individuals in our firm that worked during the time -- >> thank you, we will get into some of the specific steps to take in in a moment. my time has expired, i yield to ranking member johnson. >> thank you, mr. chairman. mr. taylor, i want to find out more about balfour. your division, headquartered out of london? >> that's right. >> a little more than 8 billion pound business? >> i believe that's -- >> how big a division is yours? >> in terms of that volume of business? our business is -- we are part of an investments division, the value that is promulgated by the company is largely around our construction and services business, the investments business does not comprise part of that revenue, it is looked at differently in the construction related business then in our investments business. to include our military housing, -- >> are you associated with the construction part of your division? >> no. >> facilities measurement? >> belfer -- balfour communities is a subset meant -- subsidiary of -- a third tier organization within the structure that is to provide housing for service members and their families. we do other apartment type communities around the country under that banner. >> ms. christian talked about that this is profit over people, p rentable. you have a response that? >> absolutely have a response to that. i think that is an unfair characterization. we worked tirelessly. we have approximately 1400 employees, about third of whom, like ms. cook and myself, are former military's of retirees, we employ a number of spouses said they also choose to live with us. we get up everyday with a singular commitment to provide for the health and safety of our military residents. i think that is an unfair characterization. i'll go back to where people make mistakes, there's human error in every business. the suggestion that the error rate is indicative of widespread broken business is totally unfair. >> in my materials i saw something like $30 million a year generated from this division, that seems woefully low. is that an accurate number? is there different number? >> the deal we struggle we closed on the projects of the $30 million, roughly, is about the averaged over the last three years, for the receipt of the management fees, 43,000 housing units. that equates to about $700 per unit per year on a pretax basis. it doesn't include the cost bring the business. >> is a small percentage of your division, correct? >> that is the most significant revenue stream. >> you paid a $65 million fines about wipes out more than two years of revenue. that $30 million a year division , that employs 1400 people? >> approximately, yes sir. deb >> you also subcontract out? that's 1400 people looking at 43,000 units. >> yes sir, there's a lot of third party support. if very stressed it and we. if we are in a market where there is limited availability of third-party vendors that we will have a heavier staff than we would. generally speaking, we could have anywhere from 10 to 12 vendors on a third-party service agreement that assist us with the performance of our work. >> do you -- if they do not perform, do you terminate the contracts and hire others? >> absolutely. >> how often do you do that? >> the standard termination clauses. >> you manage 43,000 units, was the total inventory echo five i think is 300,000, maybe 208,000. osb could -- ownby could tell you that. >> the largest management -- are you the largest management. >> i believe there is one that manages more than we do. >> how do you explain the testimony here heard from capt. choe, sergeant sort -- sergeant torres, ms. water -- mrs. wanner. >> their perception of what transpired, i think we've got a different perception. i think -- >> could you give us a different perspective? for example, with capt. choe's daughter? >> first, as a father of a son and daughter myself, i have empathy for the cho family. i've a hard time drawing a conclusion that has been drawn that there's a direct correlation between the condition of the home and his daughter's medical condition. >> that is a legitimate point to make. sometimes, difficult to prove causation on things. but to deny the fact that issues of mold was not addressed over a relatively long period of time. >> i do deny that, yes sir. in advance of this, having known that he was going to testify, i wasn't involved in the details, i took time to understand a bit more about the situation, because i want to be responsive to the subcommittee. in the time that they have family lived with us, they submitted 28 workorders, 22 of which were online. capt. choe said he used that predominantly to let us know that work was being requested. the mold work order that was put in in late february 2020, was infected twice by our staff -- inspected twice by her staff, jointly inspected by our military housing partner, found no evidence of mold at that time. subsequent to that, there were 11 additional workorders putting online by capt. choe, clearly indicating goon his intent to continue to notify us through the online portal of those issues. portly for me, i think it is a clear demonstration that capt. choe had access to the portal, which also doesn't give him just the building to input workorders, you can see any open workorders, or what the status is of those workorders. i guess my perspective, having heard what i heard a little bit ago, if he didn't think we were responding to the workorders, by engaging in the rest of portal, it should've been clear that no work order was being looked at in our system. to my knowledge, we have not been notified about. we have never seen any photographic evidence of any mold existing with the home. to my knowledge, the medical doctors letter that suggested the home might be the cause of her skin conditions and/or the school, to my knowledge that dr. never visited the home personally to view the condition of the home. to my knowledge, that report -- letter was written in late june of 2020 and provided to our site team in october of that year. a four-month delay. when i look at the fact pattern, i think there are holes. it is hard for me to reconcile in my mind that the home was the cause of the condition when the findings that we had in responding to the work request did not indicate the same. >> would you give me time to see the response of that? same question ms. cook, do you have any explanation? could you repeat that? explanation on the mold? >> in terms of the situation with capt. choe and his daughter. you just refute it? >> it is heartbreaking. i'm a grandmother, a mother, i care deeply about our residents. and all of our team does. i will say that we did inspect that home. i personally did not, but our team is trained, as well as our garrison housing office, is trained. i do feel that if there was a life safety issues that we would've immediately removed that family so that we could remediate. there was no signs of life health safety. if it is behind the walls, i cannot see that, but i do feel that we did follow all epa and cdc guidelines in that home as well as all of our homes. >> i yield back seven mr. chairman. >> thank you, senator scott? >> thank you chairman, ranking members of think you for being here. i served in the navy, at that time there was no public housing for us, i'm bridget knowledge we got to do whatever we can to provide our men and women the best facilities, the best care we can. i want to follow up with what senator johnson was talk about, dad something specific. when i was governor, i did base commander meetings every three to four months, tried to solve their problems, it was a federal issue, i never dealt with that. since i've been in the senate, a lot of people complain. i want to go through one specific one. reports of unacceptable housing conditions at the naval air station key west, i don't know if you're familiar with this, it says six b part annex. was the inch require significant improvements so personnel and their families can have safe housing. you know what efforts have been made to ensure the service members in key west are living in acceptable housing conditions and what your plans are to improve them? is this something you are familiar with? >> yes, senator, about two weeks ago i was with our team on that site. key west has the overwhelming majority his legacy housing. we constructed 111 new units. that project is part of a multi-date self product checked -- the navy southeast. we have invested heavily in renovation of those. we've done kitchen improvements, a lot of significant changes so we haven't been able to touch them up because of the financial constraints. we had some issues with hvac -- because of the conditions in those homes. we've had issues with lack of quality installation -- insulation because of the timing in which those units were constructed, they are being addressed in this plan. the navy southeast project is financially stressed. the increases haven't materialized when they were expected. insurance and utility rates have far outpaced rates of inflation. for all the navy southeast project, this year after we set our budgets, i think it was annette -- late march or april, the utility that manages or provides the utilities for key west and navy southeast told us there's going to be a 30% increase in utility costs this year. we budgeted for 3%. those are the sort of things -- challenges that don't get talked about enough. those are the real challenges that we ought to be engaging in. do we make mistakes occasionally? yes. if we want to look at the long-term health and viability of this program, the can serve the needs and interests of our service members and their families, we have to be having a conversation about the financial liability of the projects. >> how long have you been with the company? >> 22 years. >> did you enter into the contract? >> i lead the business development team that pursued that project. >> so how does it work? are you getting paid a fee per home, did you pay for the existing housing? >> in this case, the navy projects, grace went to the army projects, the private partners in this case, i will talk about our company is that we made in equity contribution within equity investment in the project. the equity in investment, generally between 1% and 5%. the navy wanted less equity than the other branches. the navy would make an investment they took out of the appropriations. the what we would do, we would underwrite the potential revenue from the base lands housing we received. we would then take that revenue, net out projected operating expenses, get to a net operating income lines abu then go to the financial markets, based upon that net operating income, we could raise, in most cases, hundreds of millions of dollars that would be deployed during that dish -- initial development period to do initial investments. >> against future revenues. so the exception is when you got into the contract, are the assumptions wrong? >> the basic allowance for housing is the only source of revenue for these projects. dh is reset annually -- dah is reset annually. it is supposed to be indicative of the cost increases in the local market. more portly, there are 70% of folks -- >> my apartment cost to $50 -- $250. >> will additionally -- if you look at the dah across the entirety of the spectrum, it looks like an ekg. >> your expectation when you enter the contract is two plus percent a year, that didn't happen? why? you lost money, lets a navy southeast, have you lost money on the project? >> would not lost money. we get paid management fees as a percentage of income. if income does not go up, our fees don't go up >>. how do you make money? > management fees? > we also get a return on the equity investment on the front and. that is the bottom of the cash flow. five c of another company that was set up that took the risk on the construction, is that the weight set up? >> the company made an equity investment in the project to help fund the initial development period. the return on the equity, like any investor in real estate project, after all the builder is paid, the mortgage is paid, we are leveraged to the hilt. they only want 1.1% equity, -- >> we could tap and it private sector markets. rates were low, it didn't come with a federal budget. >> did anybody change the deal? they made assumptions, the assumptions wrong, did the department of defense change the deals of everett? >> no. >> so they assumptions were wrong. have they made money? has the equity side sobor they bought the property, and are responsible for the fixing up, is money loser? >> for our company? >> mm hmm. >> noah, is not a loser. -- note, it is not a loser. >> it seems like -- the management fee per unit seems pretty low. i've never done a deal like that, it seems low. >> relative to our private sector companies do, it is low. we got into this business -- i served in the navy myself. this business was attractive to me and always has been. the reason i worked tirelessly, is because i believe in the construct. it's a heck of a lot better way to provide housing to our servicemembers and families than what we were capable of doing when i was in uniform. light years difference. >> so what would you do, in hindsight, what should either you or the government have done differently to make sure there is less risk that you have rogue employees that do their own thing? >> in our case, had better internal controls. >> is there anything the government should have done differently? >>, there was certainly engagement from our military partners along the way. fy 2020 nda helped stoke the fire. we're working more closely with our partners than we ever have. i think that is what the program ultimately needed. >> you don't think that structure of the entity cause the problem? it was the lack of oversight? >> yes, i think it is fair. >> thank you, senator scott. >> mr. taylor, i want to return to the question of whether indeed the company has improved its practices since 2019. again, the period of 2013 to 2019 is the period during which the company was, as you have bulged, gauged an scheme to defraud the united states. you made note in your opening remarks of satisfaction surveys that you have undertaken. is that, in your view, an indicator of improved performance? what does that signify in your opinion? >> it is one thing we pay attention to, is direct feedback from our residents to an independent third party. any time -- all service members are invited to participate when they move into their new home, once they take occupancy. there are invited to participate in a survey and time we respond to a work order. it is an indicator. it is not the end-all be-all, it is a pretty good indicator. we track that so we can take action or we see things are trending in the wrong direction, to investigate why are scores dropping? what is it that we need to be paying attention to to correct? >> the reason i'm skeptical of the satisfaction scores is an indication you have improved your performance, this is something that you and your team also raised in interviews before this hearing with the subcommittee staff, if we could have a book please at 16, here we have your prepared testimony today, at left. have your predecessor in this role's prepared testimony from february of 2019 at right, testifying before the senate. just before just to make sure we have these dates correct, i want to clarify that february 2019, and your predecessor made these comments to the senate, was still during the period when the company was engaged in a scheme to defraud the united dates, is that correct? >> february, yes. >> here we have your predecessor touting satisfaction scores in sworn testimony before the senate. during the period when the company is engaged in a fraud scheme, falsifying, destroying work orders, lying to the armed services and the company is touting at sativa -- satisfaction scores. at left, we have once again, from your written statements today, the satisfaction scores as an indicator of your company's improvement. one to five are good to outstanding, these may not be apple to apple comparisons, it gets back to the core question, which is why should the senate believe that a company that for six years defrauded the government, i am shocked mr. taylor, that you denied these issues are systemic. they are clearly systemic. in fact, your performance as a company at installations in my state is notorious. local media have reported on it for years. every time i visit an installation, enlisted personnel raise it without me prompting them to. we have convened entire discussions within listed personnel to figure out what is going on, that is why we embarked on an eight month investigation to understand what is happened. i'm not sure you understand what is happening within your own denies asian. did your senior executives know that for six years, the company was engaging in fraud? >> no. >> would you know now if your company was continuing to engage in fraud? >> yes. >> would? i would like to explore whether or not your management team had the situational awareness to understand what is happening inside your own firm. if we could please turn to tab hurting. -- 13. how is mr. rodriguez related to you and your organization? excuse me, tab 12. who is mr. rodriguez? >> former employee and facilities management at fort gordon. >> prior to that he was maintenance supervisor for stewart. >> understood, thank you. >> here we have an email from his rodriguez. as the facility manager at fort gordon, am i correct that he is your subordinate? >> he is my chain of command. >> this emails from february of 2021, 2 years after the conclusion of the period during which belfer was engaged in a scheme to -- the company was engaged in a scheme to defraud the united states. here's the mail from your subordinate, i'm not sure you received this email, but ms. cook, you did, in which mr. rodriguez says that the state of the facilities department at fort gordon is quote total chaos . he says "words cannot describe the total chaos." he further states that the facilities department at fort gordon has been lying to the army about the condition of the facilities department at fort born. he says "this is not acting honestly or respecting our third parties, meaning the army, and treating them with integrity and professionalism". ms. cook, you received this email in february of 2021, is that correct? >> yes, i did. >> what action did you take when you receive this email? this is from the head of the facilities department for gordon, that the department was being dishonest with the army, what action did you take? >> i do not recall. i believe i did forward this to -- up my chain of command. >> did you follow-up after forwarding it to see what action was taken? >> i believe we had a couple -- it was regarding the fm building, the facility building, i do believe -- >> you followed up? mr. taylor, were you aware of this emailer the time? >> i was not. >> you were not aware of? you understand the skepticism. let's set the stage here, it has been two years since the end of a six-year period when the company is engaged as scheme to defraud the united states. at this moment, your under department of justice investigation for being dishonest with military. for fabricating and destroying reporters. you know you are under investigation, you know you are in hot water. your subordinate reports that the facilities department at fort gordon is in total chaos, and that with respect to the condition of the facility departments of its premises, there is a lack of integrity with the army. and you weren't aware of this mr. taylor? you state that the scenery second halves -- the senior executives did not know there was fraud ongoing for six years, but that you would note there is fraud ongoing now? how sure are you, mr. taylor, that you would know if that misconduct continued to this day? >> i think that your interpretation of this email, doesn't align with the question you are asking? >> let me restate the question for clarity. here we have your subordinate, reporting that when he took over the facilities department for gordon, it was in a state of total chaos. and that the facilities department had been dishonest with the army. >> correct. >> we got the document here. that's what it says. when i arrived on site, words cannot describe the total chaos that was the facilities department at fort gordon. you were not aware of this report? >> i was not. >> my time is expired. >> can you step through after the settlement, a couple years ago, what specific actions did you take to correct the deficiencies in your process? >> there were many. as we were working through them, i will share that we were sharing those remediation plans with doj investigators. with our military partners, with those with oversight of this program. there are a number of things, i will share with you some the things we did. if you look at one of the root causes for the falsification of recorded order data was the system we used. it is a -- at the time, it was too much opportunity for those that use the system to manipulate data. we worked with that provider -- >> where they are bonus plan, manipulating data was to their individual benefit? your 1400 employees and managers, did they get bonuses based on what their performance was? >> the statistics, there was a portion of their bonus that came out in the investigation that their compensation was tied to performance. that is correct. >> is that still the case? >> it is not. all of their bonus at site level is tied to customer satisfaction. or it ought to be. >> and there is not wait way for them to dr. the satisfaction surveys? >> there is not. that system had manipulate -- an opportunity for manipulation of data. we worked with the company to make sure local site teams had no ability to change the data. we also engaged a third-party call center now that takes 100% of our calls, save got an independent third-party documenting the timing of the receipt of the work request, so it is not our staff that are inputting that information. if there is a recognized area in those --error, local site teams cannot make those adjustments. that has to be documented and justified and approved to a vice president level. if we make the change, we are transparent with our military partners, the reason why we made the change, to ensure there is transparency in agreement with making the change. >> you know what you are being investigated for right now? >> nothing that i am aware of. >> are you aware there is a doj investigation? >> ongoing currently? i am not. >> ms. cook, how do you explain the mail for mr. rodrigues where he is talking about the facilities in chaos, what was in chaos, do you know? >> i believe, if i'm a senator, i get thousands of emails every day, as all of us do. i definitely received it. i do know that tom went down there to help. we had lost a previous facility manager. i took it as his first observation of being on the ground. he sent it to his supervisors, that did help him pull it together. in an action plan of how we are going to pull this. -- >> this is an initial email when he gets down there, he goes this is a mess, this is in chaos and on but to fix it for you? is that how you interpreted it? >> that's our remember it. i get thousands of emails. i'd have to go back and review that. i do feel that tom just had come on the ground. and he was reporting of what he'd is seeing. >> i want to go back and try to understand these models, some if i've got this right. there's actual construction phase of this, where you put in a small percentage in terms of equity, and leverage it out, you don't do that because his housing for the militaries of nobody's afraid they are not going to get paid back. you build a billion dollars of housing, you are only investing $10 million maybe? >> i think everyone of our projects, the equity contribution from the company was between 1% and 5%. >> so $10 million to $15 million? your entire revenue streams, is $30 million a year? >> are property management fees on average over the last three years. >> that was your revenue stream, was there some from the construction part of this? are you making money on the construction? >> in the initial development period when we were building out the housing, we had a third-party, and a related third party that was our builder. >> so the constructibility, you may be get 10% of that, you make my on the actual construction of the housing unit. stem. >> a builder would have, as a developer, we earn development fees for the buildup. >> he made money there. ongoing, it is $30 million, with 1400 employees. with costs going up and down, the reason i'm digging into this, i would not invest in this business. i appreciate the fact he got a commitment and you want to provide good housing for our service members, unless i'm missing something, it seems like a risky business. >> it is not the only revenue source, does the property management fees, i want to make sure we are clear. the way the projects are constructed, the majority of the cash left over after the builder, pays on average 90% that goes to project reinvestment account. that is there for long term sustainment. it was always envisioned to be sufficient to take care of the housing over the balance of these fifty-year agreements. those reinvestment account funds are deployed when our military service partners are in agreement with what the plans for how we deploy those funds to make further improvements down the road. and that happens, we will earn development fees, we will engage contractors to perform that work , there is still opportunity for revenue or fees, that was always envisioned in the construct of the deals. i talked about the equity investment, 90% of the access cash flow goes to the reinvestment account, on average about 10% comes as a return on the equity investment. >> the reason i'm trying to delve into the finances, is if a company like yours is not making money, such a slim margin, there's not much incentive for you to improve things. if you are a fair return, the business is attractive to you and others. >> i don't agree with saying it does not incentivize us to do a good job and improve things. everybody is well aware, it is made up of a base management fee and an incentive component, that was the issue that got us into the challenges with doj. if we do our job well, there is opportunity for us to earn more money for the business. we are not an opera for profit, we are a business like every other provider is. >> we kind of close us out, in your mind, i think i heard you testified that the solution year is better internal controls, and you and your competitors in this space? >> absolutely. >> you think with better internal controls, you can satisfy ms. christian and our other witnesses? >> we are seeing evidence already. the level of control and oversight we have within our organization, the level of oversight we see from our military partners, there's a lot more control over the activities that are happening on every one of these installations. it is in a better place today that was three years ago. >> you have an independent company doing your surveys, is there a other independent auditing of your performance? >> all of our finances are independently audited. >> i'm talking about your performance. >> the performance? there's annual surveys that the service branches engage. he saw the example on the screen was a result, the cdl scores that the service branches engage. and we have the satisfaction surveys for the work we perform. >> this will be my last question, i'm disturbed about potential retaliation. we heard that from all the witnesses. i've seen that, since i came to the center the private sector, i'm shocked at how much retaliation there is within government. this would be within the military. are you aware that? based on testimony, it is retaliation, certainly participated in by members of your staff, in combination with some of the folks in the military. i'm not aware of our staff retaliating against residents because eggs rests displeasure with her -- because they expressed displeasure with our service. >> thank you, ranking member johnson, to close out, i think it is worth recapping what you were getting into in terms of the structure of revenues. for clarity, with our final few moments, describe one more time how this incentive fee structure operates please? >> if you look at the cash flow for any project, as part of the operating expenses, there's typically a base management fee. it is usually on the order of 2% of revenues. after that services paid, after we put win myint for capital repairs and replacement, we will qualify for incentive management fees. there is a slight difference, a lot of similarity between the way each branch has negotiated the performance metrics. all of them have undergone a revamping in the last three years. those incentive fees, for example the incentive payments you will receive from that joint fund you establish with the service will be will be correlated with your performance and among the metrics of performance will be the timely and successful closure of work orders, correct? >> the timely response to emergency and urgent and timely completion of routine services. >> so if there's an issue such as mold which poses a health hazard, that's classified differently then a routine issue, is that correct? >> that is correct. >> so when he clearly stated it is mold and then we see that it was classified as carpentry, that kind of thing could impact your incentive fees, correct? if the company, and this is not believe what was going on during the period of the scheme to defraud the united states, misclassification of a request for mediation of mold, which should be more timely acted on as something like carpentry will cause you to be paid more incentive fees by artificially inflating your performance metrics, correct? >> if the volume of that activity rose to the level that we would not the meat -- we would not meet the threshold, that is a correct statement. and it assumes that we did not identify the error and put in place and correct the error. but again, to achieve -- it does not mean 100% success to qualify. there are graduated levels depending on that. one or two in and of itself being an error not potentially impact whatsoever our incentive fees. >> thanks for that clarification. i want to thank the members who attended this hearing and all the witnesses for appearing today before the subcommittee. we will continue to seek remedies for the issues discussed today, our military personnel stateside and abroad sacrifice continually in service to this nation, as to their families, and they deserve the utmost of our best by those responsible for providing that housing. but that, this hearing is adjourned. 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