EDITORIAL: More controversy surrounding Nevada’s Hardest Hit Fund

The fiasco known as Nevada’s Hardest Hit Fund continues to generate controversy. It’s long past time to apply a thorough disinfectant.

Federal officials this week again singled out the program for criticism, finding that the nonprofit overseeing the program violated its own rules by awarding millions of dollars in no-bid, six-figure contracts in 2016 and 2017. Some of the contracts “were to former colleagues of the nonprofit’s CEO, according to an audit,” the Review-Journal’s Gary Martin reported.

The finding, by Christy Goldsmith Romero, the special inspector general for the Troubled Asset Relief Program, comes less than two years after a 2016 federal audit found a “pervasive culture of waste and abuse, coupled with a lack of performance.”

The review determined that the number of Nevada homeowners benefiting was falling far below expectations. Between 2013 and 2015, participation dropped by 94 percent in the Silver State, even though thousands of residents remained swamped on their mortgages.

As a result, the Treasury Department in February announced it would withhold $6.7 million in aid for Nevada. The money will be dispersed among other states.

The Treasury Department created the Hardest Hit Fund in 2010 to help homeowners in states such as Nevada that were particularly disrupted by the housing crisis. In an effort to slow foreclosures, the government offered enrollees mortgage principal reductions or other financial aid to help them stay in their homes.

The Nevada Housing Division farmed out oversight of the program, which to date has received more than $200 million from U.S. taxpayers, to the Nevada Affordable Housing Assistance Corporation. Following the 2016 audit, the corporation replaced its CEO and underwent a restructuring intended to ramp up state supervision.

Verise Campbell, the NAHAC’s new CEO, insists the corporation is now on the right track and has disputed some of the inspector general’s findings about program participation. She told Mr. Martin, “All contracts entered into were done so with full transparency.”

Perhaps. But that doesn’t address whether the no-bid deals were contrary to the corporation’s policy. Nor is it an explanation for why competitive bidding wouldn’t have been in the best interest of the taxpayers.

Last week, U.S. Rep. Dina Titus, D-Nev., sent a letter to Nevada Attorney General Adam Laxalt seeking an investigation into the nonprofit. Mr. Laxalt responded by noting that the special inspector general is conducting such a probe and that his office was prepared to assist.

That’s welcome news. But Mr. Laxalt should be prepared to enter the fray if the inquiry documents further malfeasance. State and federal taxpayers deserve as much.