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After Months of Drama, Pierce’s Silence All but Closes House HUD Probe

October 28, 1989

WASHINGTON (AP) _ The six-month House investigation of federal housing programs yielded dramatic tales of mismanagement and favoritism but failed to reveal definitively what roles former top agency officials played and whether they engaged in criminal activity.

″We didn’t crack the ring,″ said Rep. Christopher Shays, R-Conn. ″We didn’t nail down and expose what I think was a conspiracy to defraud the government.‴

The investigation by the Government Operations subcommittee on employment and housing began in April after a Department of Housing and Urban Development report found that a rehabilitation program was being milked for millions of dollars in excess rents and that subsidies apparently had been steered to developers who hired well-connected consultants.

In 24 hearings the panel was told how HUD failed to keep track of millions of dollars, mismanaged programs and gave favored treatment to those with agency or political connections.

But the refusal of former HUD Secretary Samuel R. Pierce Jr. and three of his top deputies to answer questions about their roles left a gaping hole in the investigation and also effectively ended it. Only a few more hearings are expected before the investigation is closed.

The question of whether there was criminal activity was left to the Justice Department. Justice Department spokesman David Runkel said Friday that investigations are ongoing.

″We have more than 700 open cases that involve up to 1,000 individuals or companies,″ he said. ″These are high priority items and will continue to be until this HUD mess is cleaned up.″

But Runkel said Attorney General Dick Thornburgh opposes congressional efforts to get him to name a special prosecutor to investigate HUD.

Federal authorities have in recent months reviewed records compiled by HUD’s inspector general and the subcomittee, and several grand jury investigations are known to exist.

The only way for the subcommittee investigation to make significant progress would be to secure the testimony of one or more of the former HUD officials who refused to testify, members of the panel said. The only way to do that, it appears, would be to grant immunity.

The panel’s chairman, Rep. Tom Lantos, D-Calif., said Friday he had no current plans to offer immunity to anyone but said he had not ruled it out in the future.

Lantos appears to lack the support on the panel he would need for such a move.

″I have no intention of playing God and trying to decide who should and who shouldn’t be granted immunity,″ said Shays.

Rep. Barney Frank, D-Mass., said immunity was ″a very sensitive subject″ and should only be granted if approved by prosecutors.

One member of the panel, speaking on the condition of anonymity, said preliminary discussions with two of the former Pierce aides about immunity had convinced him they would provide too little evidence to make it worthwhile.

Even Lantos, who has appeared to relish his role in leading the televised hearings, conceded the decisions by Pierce and others not to answer questions effectively brought the subcommittee investigation to a halt.

″The subcommittee has finished the bulk of its work,″ he said.

That work included public testimony from 50 witnesses, staff interviews with scores more and occasional theatrics.

With one notable exception, the former HUD officials, consultants, closing agents and attorneys called before the panel to discuss their activities said they had done nothing wrong.

The exception was Marilyn Harrell, better known as ″Robin HUD,″ who wept and read from Scripture as she told how she easily stole more than $5 million from HUD during her work as a closing agent on property sales and gave some of it to the needy. She said she deserved to be punished and promised to repay.

Other witnesses, however, defended their HUD-related activities, which including reaping fees of up to $1.3 million for lobbying HUD on behalf of developers.

Paul Manafort, a prominent Republican consultant, conceded his work could be called ″influence peddling″ but said he broke no laws or HUD regulations.

Former Interior Secretary James Watt matter-of-factly defended his making $300,000 to $420,000 on one project alone - for making a few phone calls to HUD and sitting down with Pierce for one meeting.

And Bill Taylor, a National Republican Committee member from Florida, bragged about his ability to win HUD work for his clients and blurted out a sarcastic ″Good luck″ when told the goal of the hearings was to remove influence peddling from government.

He promised to stop cashing in on his political position ″as soon as Congress does.″

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