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Pierce Again Refuses to Testify, Prompting Call for Prosecutor

October 27, 1989

WASHINGTON (AP) _ Former HUD Secretary Samuel R. Pierce Jr. declared Friday he was guilty of ″no illegal or wrongful acts″ but refused again to testify about scandals at his department, invoking his constitutional right against self- incrimination.

Democratic congressmen called for the Justice Department to appoint a special prosecutor to take over the investigation.

The chairman of the House panel investigating allegations of fraud, mismanagement and influence peddling, Rep. Tom Lantos, D-Calif., excused Pierce from a subpoena requiring still another appearance next week and said his panel would soon end its inquiry.

He said the subcommittee had ″demonstrated a colossal scandal″ existed at the Department of Housing and Urban Development during the Reagan administration. And he said the panel did not plan to offer immunity from prosecution to Pierce or his former aides as a way of compelling them to testify.

″I have high hopes the Justice Department will do its duty,″ Lantos said.

Asked about Lantos’ request for a special prosecutor, Justice Department spokesman Daniel Eramian said: ″The Department of Justice is conducting investigations into HUD matters almost on a nationwide basis.″

Eramian said the department is conducting 700 investigations ″into criminal matters″ involving the operation of HUD programs. The department is also ″closely reviewing congressional testimony dealing with HUD matters.″

Much of the work is being coordinated by the Justice Department’s fraud section. But Eramian said the department’s public integrity section ″is also involved in this effort.″ That unit of the criminal division investigates allegations of bribery or other improper conduct involving public officials.

Pierce said he was declining to testify because he believed he had been made a target of the subcommittee’s investigation and ″unfairly accused of alleged lies and dishonesty.″

He testified voluntarily before the panel last May. But he refused to testify last month when the panel subpoenaed him to answer questions about what members say are inconsistencies and contradictions between his and other witnesses’ testimony.

Following Pierce’s latest refusal, two Democrats on the House Judiciary Committee said they would ask it to formally ask the Justice Department to name a special prosecutor to investigate Pierce.

″Now it’s clear that Sam Pierce is stonewalling,″ said Rep. Charles Schumer, D-N.Y. ″Our only choice now is to take the process from the legislative arena and move it into the arena of an independent counsel.″

″I think it’s clear from these hearings ... that there is criminal activity at HUD in the area of defrauding of the federal government, conspiracy to defraud the government, and we may well have perjury,″ said Rep. Bruce Morrison, D-Conn.

Lantos, meanwhile, disclosed that Pierce had asked HUD to pay his legal expenses stemming from the congressional probe - and that HUD Secretary Jack Kemp had rejected the request.

Pierce read a statement to the panel saying he hoped to give his version of events some day.

″Although people may disagree with policies of the Reagan administration, or with my personal management style while secretary of HUD, I believe that I committed no illegal or wrongful acts,″ Pierce said.

″I look forward to the time when innuendoes and rumors to the contrary are put to rest,″ he said. ″I look forward to the time when I can tell my story, and I can assure you I do have a story to tell.″

The House Government Operations subcommittee on employment and housing has heard scores of developers and consultants testify of political favoritism and mismanagement at HUD during Pierce’s tenure.

When he was asked about one former HUD official’s contradiction of the former secretary’s testimony that he did not influence the selection of HUD subsidy awards, Pierce called the question ″unfair″ and refused to answer.

Rep. Christopher Shays, R-Conn., said Pierce’s earlier testimony on that point ″could be perjury″ and told Pierce it was ″in your best interest″ to answer.

Pierce said in September that his refusal to testify was in part because his attorneys had not had time to prepare. He said his attorneys still do not have all the documents they need, but that he was now concerned about ″accusatory statements″ by panel members.

″An atmosphere has been created in which I have become a target of these hearings and have been unfairly accused of alleged lies and dishonesty,″ he said.

Pierce asserted that the subcommittee’s investigation ″is simply a review of allegations that were already fully investigated and rejected″ by the inspector general of HUD.

A report by inspector general Paul Adams last spring triggered the HUD investigations, but that report centered largely on one HUD subsidy program. Pierce was not questioned in that investigation until his last day in office.

Pierce’s attorney, Paul Perito, said after the hearing that Lantos’ panel had produced nothing to substantiate allegations against Pierce.

″Where’s the beef?″ Perito said. ″They’ve been at this for six months. They’ve spent a fortune.″

Lantos’ subcommittee has faced refusals to testify by Pierce and three other officials: former executive assistants Deborah Gore Dean and Lance Wilson, and former deputy assistant secretary R. Hunter Cushing.

Lantos said granting immunity to one of those witnesses in order to secure testimony remains an option but ″we are not currently planning to take any steps along those lines.″ So far no support has emerged on the panel for granting immunity.

″The bulk of the work will now have to take place by other agencies of government,″ Lantos said. ″My feeling is that the American people on the whole have had all they want to know about HUD and are ready to move onto other subjects.″

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