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House Panel Seeks Expanded Probe of Pierce

July 24, 1990

WASHINGTON (AP) _ A congressional panel asked a special prosecutor today to broaden his probe of former Housing Secretary Samuel Pierce, saying it has evidence Pierce steered money to clients of his former law firm and may have committed perjury.

In urging independent counsel Arlin Adams to expand his investigation, the House Government Operations housing subcommittee said its 14-month-long probe uncovered ″widespread abuses, influence peddling, blatant favoritism, monumental waste and gross mismanagement″ at HUD.

The subcommittee specifically asked Adams to widen his investigation into three areas of possible wrongdoing:

-Whether Pierce committed perjury during the only appearance before the subcommittee, on May 25, 1989, in which the former Cabinet officer gave detailed testimony. The congressional panel said many of Pierce’s statements were contradicted by subsequent testimony. Pierce essentially maintained that he did not play a direct role in the awarding of housing projects.

-Whether Pierce conspired with others to steer HUD business to clients of Battle, Fowler, Jaffin and Kheel, the Wall Street law firm where Pierce formerly had been a partner. It also questions whether Pierce conspired with his former top aide, Lance Wilson, in connection with contract awards.

-Whether Pierce and other HUD officials ″conspired to defraud″ the government in the handling of the Department of Housing and Urban Development’s coinsurance program, which provided backing for housing development projects during the Reagan administration from 1981-89.

The letter came as the eight-member panel neared an end to its investigation of the HUD scandal. A subcommittee source, discussing the panel’s role on grounds of anonymity, said no more hearings are scheduled. The aide said the subcommittee hopes to complete a final report, with recommendations for reforms at HUD, sometime in late August.

The letter said documents found in HUD files show that Pierce’s former law firm frequently sought Pierce’s assistance in HUD-related matters. It said they included having Pierce meet with a client to discuss a development grant application and helping securing lucrative housing subsidies.

It cited a letter from a partner in the firm to Pierce’s assistant, Deborah Gore Dean, in 1985 seeking her help in obtaining a subsidy for an Amherst, N.Y., project, and recounting past assistance in another project there, Allenhurst Apartments.

″In light of Secretary Pierce’s long and close relationship with his former law firm, Battle, Fowler, it defies logic and reason that Ms. Dean would have assisted Battle, Fowler in obtaining these scarce and much-in- demand (subsidy) units for the Allenhurst project on her own without the direct and intimate involvement of Secretary Pierce,″ the letter said.

Thomas Glynn, a partner in Battle, Fowler and spokesman for the firm, said, ″We are confident that no member or employee of the firm has engaged in any inappropriate conduct.″

Pierce’s attorney, Paul Perito, was not immediately available for comment.

Pierce was expected to return to the firm, but has instead spent much of the past year working with a team of lawyers defending himself against allegations of favoritism raised by the subcommittee and now Adams.

Thousands of pages of HUD documents released through the Freedom of Information Act last year included dozens of letters from Battle, Fowler lawyers to top Pierce aides. But the law firm and Pierce, through his attorneys, have denied any favoritism.

Several members of the subcommittee, including Chairman Tom Lantos, D- Calif., have repeatedly said Pierce may have committed perjury during a May 1989 appearance before the panel.

At that appearance, the former secretary portrayed himself as a hands-off manager and said he took no direct role in funding decisions. Subsequent witnesses and documents released after Pierce testified indicated that Pierce had indeed played major roles in numerous funding decisions, including several for projects involving associates or prominent Republicans.

Pierce’s lawyers have said their review of the testimony and documents indicated no wrongdoing by Pierce.

Pierce again appeared before the subcommittee and vehemently denied any wrongdoing while accusing the panel of targeting him for criticism and investigation. But Pierce refused to answer questions, invoking his Fifth Amendment protection against possible self-incrimination.

The silence of Pierce and several former top aides who also refused to testify has left many questions unanswered 15 months after HUD’s inspector general set of a firestorm by releasing a report that concluded the department’s costly Moderate Rehabilitation Program was riddled with mismanagement and political favoritism.

Acting on a request from Congress, Attorney General Dick Thornburgh in March sought and won the court appointment of Adams. At that time Adams, a former federal judge, was charged with investigating the role of Pierce and top aides in the Moderate Rehabilitation Program.

Since then, Adams’ jurisdiction has been broadened to include Pierce’s administration of Urban Development Action Grants and the secretary’s discretionary fund for technical assistance and other special projects.

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