TEAPOTS Exposed: The PAVE Initiative’s Illusion of Justice

The Biden administration’s PAVE Task Force initiative was never a legally engineered program to uncover racial bias in the appraisal industry. It was, as I have now uncovered, a systemic administrative illusion: a complex, bureaucratic apparatus designed to justify federal grant funding, inflate internal performance metrics, and maintain political optics — not to administer justice.

This wasn’t enforcement. This was theft of government funds dressed in legal theater. Homeowners were deceived. Appraisers were targeted. The law was sidestepped. And no one, until now, has exposed the machinery behind the curtain.

“I Knew Something Was Wrong — Because I’d Already Been Through a Real Investigation”

I went through a formal racist/discrimination investigation with the Department of Veterans Affairs years ago as an appraiser accused of racism by a disgruntled homeowner that did not get a refinance of his home, an appraised value of his home to make the numbers work. It was year-long investigation that was tough, but it followed the law: proper jurisdictional review, an investigative plan, interviews, and a formal closure letter generated.

When HUD began a mirrored investigating of me under the PAVE initiative (Thus Double Jeopardy), I immediately knew something was off. There was no TEAPOTS case number. No Administrative Law Judge (ALJ) referral. No recorded interviews. Just vague emails and a completely fabricated “second charge” — later disavowed. And worst of all, HUD repeatedly denied my requests for procedural transparency. I was being dragged through a fake legal process — and they assumed I wouldn’t notice.

No law firm would take my case. HUD officials refused to explain what was happening. So I did what no appraiser should ever have to do: I investigated them. And what I found is bigger than me — it implicates HUD’s own lawyers, leadership, and potentially members of Congress.

What Is the TEAPOTS System — and Why Does It Matter?

TEAPOTS (Title Eight Automated Paperless Office Tracking System) is HUD’s official case tracking system for fair housing complaints. Every legitimate investigation must be:

• Opened in TEAPOTS
• Assigned a tracking number
• Include an investigative plan (HUD Handbook 8024.1 REV-2)
• Be subject to jurisdictional review under 24 CFR § 103.25

In my case — and potentially hundreds of others — no TEAPOTS entry was ever made. That means:

• No formal cases existed
• No legal processes were triggered
• No oversight bodies could audit it

If it’s not in TEAPOTS, it’s not real — and that’s why HUD’s Office of Inspector General (OIG), FOIA office, and others never responded to my certified letters or emails, my pleas for legal interventions: they had no legal record to examine.

Marcia Fudge’s False Statements to Congress and the Public

Former HUD Secretary Marcia Fudge repeatedly testified under oath and gave public statements suggesting that PAVE was actively investigating hundreds of appraisers for racial bias:

“We are investigating over 800 appraisal bias cases. We are serious about enforcement.” — Secretary Marcia Fudge, House Financial Services Committee, March 2022

“These are real cases with real people. We are holding appraisers accountable.” — Fudge, PAVE Public Briefing, June 2022

“We are seeing patterns of bias, and we’re launching enforcement actions across the country.” — Fudge, White House Equity Roundtable, 2022

But based on my experience, my FOIA records, and internal documentation — these claims were categorically false:

• These were not “cases.” They were intake-only inquiries, never reviewed by attorneys or entered into TEAPOTS.
• No formal charges were filed in the vast majority of claims.
• Homeowners were never notified of any resolution.
• Appraisers were threatened, manipulated, and often left in limbo with no due process.

This is more than misrepresentation. It may constitute a violation of 18 U.S.C. § 1001 — making false statements to Congress.

How PAVE Was Built to Bypass the Law

The legal foundation of PAVE was not built in public. It was likely authored by:

• Attorneys inside HUD’s Office of General Counsel (OGC)
• Coordinated with the DOJ Civil Rights Division
• With political pressure from the White House Domestic Policy Council
• And justified by policy advisors or civil rights think tanks

Instead of creating a lawful civil rights enforcement mechanism, they created a procedural illusion:

• No real case files
• No administrative law judge referrals
• No proper jurisdictional vetting (especially of homeowners)
• No recording of interviews (despite HUD Handbook guidance)

This allowed staff and contractors like Theresa Muley and investigator and Sally Pai her Supervisor (both ex-attorneys) in the San Francisco office of HUD to simulate enforcement without creating accountability.

Legal and Civil Rights Violations Potentially Committed

1. Administrative Procedure Act (APA) – 5 U.S.C. § 551–559

• • HUD failed to open a legal case, notify the accused, or offer a right to reply.

2. Fifth Amendment – Denial of Due Process

• • I and many appraisers suffered reputational and professional harm without lawful process.

3. False Statements Act & Grant Fraud – 18 U.S.C. § 1001; 31 U.S.C. § 3729 (False Claims Act)

• • HUD reported fake case numbers to justify PAVE funding, staff salaries, and contractor billing or get year-end bonuses due to volume of cases open(ed).

4. Americans with Disabilities Act (ADA Title I & V)

• • As an ADA-protected contractor, I was denied requested accommodations and retaliated against after disclosure of my stroke and PTSD.

5. Fair Housing Act – Misuse of Section 818 (42 U.S.C. § 3617)

• • HUD fabricated a “coercion” (818 handbook charge) charge against me despite instructing me to contact the complainant.

6. HUD Handbook 8024.1 REV-2 and 24 CFR § 103

• • No jurisdictional review, investigative plan, Notice of Rights, or formal findings. No TEAPOTS entry.

7. Civil Service Reform Act (5 U.S.C. § 2302)

• • HUD staff engaged in retaliation, coercion, and procedural manipulation.

8. Title VI of the Civil Rights Act of 1964

• • PAVE’s ZIP code-based targeting may amount to discriminatory enforcement and profiling.

Everyone Was Feeding at the Trough

The PAVE program succeeded — just not at protecting civil rights. It succeeded in:

• Justifying massive HUD and contractor salaries
• Providing political cover to leadership
• Generating favorable headlines
• Avoiding legal liability

No one was held accountable. And no one got justice. Everyone involved benefited — except the homeowner, the appraiser and the general public.

What Happens Now?

I’ve submitted a comprehensive FOIA request demanding the real numbers:

• Total number of PAVE cases opened in TEAPOTS
• Number referred to ALJs
• Number with formal findings
• Jurisdictional breakdown (FHA vs. VA vs. conventional)

If, as I suspect, these numbers come back confirming what I’ve seen — then Marcia Fudge, HUD Legal, and the enforcement teams under PAVE have misled Congress, the industry, and the American people.

The appraisal community deserves better. So do homeowners who were told their complaints mattered. And so does every federal appraiser subjected to fear, silence, and retaliation.

Let this article be the start of the reckoning.

Respectfully submitted,

Kenneth J. Mullinix
Appraiser, Veteran, Whistleblower