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Lawyer Says Former HUD Official Didn’t Use Office for Own Gain

June 10, 1992

WASHINGTON (AP) _ A former assistant housing secretary charged with misusing his office for financial gain did not knowingly act to benefit his own interests, his lawyer says.

Thomas T. Demery on Tuesday became the third former high-ranking official indicted in the influence-peddling scandal at the Department of Housing and Urban Development.

Demery, who worked for HUD from 1986 to 1989, was accused of steering housing subsidies to a company represented by a co-defendant, Phillip McCafferty.

The grand jury indictment said Demery also received payments throughout his tenure at HUD for a real estate company he had sold to McCafferty before joining the federal agency.

Demery, of Alexandria, Va., was charged with one count of conspiracy and four counts of using his office to further personal financial interests.

McCafferty, of Orchard Lake, Mich., was charged with one count of conspiracy and four counts of aiding and abetting Demery’s alleged acts. All of the charges are felonies.

Demery’s attorney, John P. Hume, said in a statement, ″Mr. Demery did not knowingly or intentionally take official action on any matters affecting his personal financial interest.″

Former top HUD officials Deborah Gore Dean and Lance Wilson have previously been indicted in independent counsel Arlin Adams’ investigation of alleged fraud and mismanagement at the department during the Reagan administration.

Dean and Wilson both served as executive assistant to former HUD Secretary Samuel Pierce, who has not been charged in the continuing investigation.

Demery disclosed the sale of his Birmingham, Mich.-based real estate company, Income Property Services, Inc., to McCafferty during the HUD confirmation process in 1986, attorney Hume said. He added that under prosecutors’ description of events, the alleged conspiracy would have to have been devised before Demery knew he was being nominated for a HUD job.

McCafferty’s lawyer, David F. DuMochel, said from Detroit of his client: ″He hasn’t done anything wrong ... His dealings with Mr. Demery were all aboveboard, they were all of record - nothing hidden or in any way improper.″

McCafferty represented another company, the PM Group of Brighton, Mich., that sought HUD subsidies for four multifamily housing projects in Michigan and Illinois, the indictment said.

Demery directed HUD subsidies to those projects, the indictment said, at times intervening in areas of his agency where he had no authority.

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