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During Final Days in Office, Pierce Pushed Disputed Contracts

July 31, 1989

WASHINGTON (AP) _ Federal housing officials say they are reviewing two contracts approved by Samuel Pierce in his final days as housing secretary, and agency sources say Pierce endorsed one project over stiff objections from HUD experts.

The two contracts, worth several hundred thousand dollars, were placed on hold shortly after the Jan. 20 change in administrations ended Pierce’s eight- year tenure at the Department of Housing and Urban Development.

One contract was to go to a firm headed by two prominent black Republicans and the other to a company whose president had a longstanding friendship with a former Pierce deputy, HUD officials said. The officials asked that they not be identified by name.

Pierce’s role in these contracts came to the attention of HUD investigators about two weeks ago, the HUD sources said.

HUD spokesman Jack Flynn, asked about the January approvals, confirmed that they were among a number of pending contracts put on hold after Jack Kemp succeeded Pierce as HUD secretary.

Several department sources said HUD staffers had questioned the need for the consulting arrangements and had criticized the proposals as poorly drafted.

The contracts were issued under a technical assistance program that HUD auditors have criticized on grounds that many contractors provided too few services and spent too much money on overhead and administrative costs.

Pierce’s approval of the projects was not improper, but his role is at odds with his congressional testimony. In sworn testimony in May, he told Congress he took no direct role in agency funding decisions.

Repeated attempts to reach Pierce in recent weeks have been unsuccessful. He has an unlisted home telephone number, and has not returned messages left at his former law office in New York.

One contract, to a company called One America Inc., was endorsed by Pierce on Jan. 17 - three days before he left the department - according to HUD sources who said an agency selection committee voted 6-1 against the contract.

The other contract, to Mississippi-based Pro-Mark Inc., also was approved by Pierce in mid-January, according to sources who said the proposal was extensively revised before the review committee approved it by a 5-3 margin.

The presidents of both companies defend their proposal, both of which dealt with minority enterprise.

One America is headed by Elaine B. Jenkins, who once served on a White House small business commission, and her husband, Howard Jenkins, a former Labor Department official and the first black to serve on the National Labor Relations Board.

Pro-Mark president Les Range has close ties to Dubois Gilliam, a former Pierce associate who approved earlier HUD contracts to the company before he left the agency. Range said he appealed to Pierce in the belief that criticisms of Pro-Mark’s previous work may have been racially motivated.

The housing agency during Pierce’s tenure became a wellspring of cash for well-connected developers and consultants, and a stunning example of mismanagement that allowed millions of dollars to disappear through sloppy accounting practices.

One America requested $421,000 to develop a computerized listing of black entrepreneurs. Pierce approved the project at half that amount despite the committee’s recommendation to reject the unsolicited proposal.

HUD records indicate that One America, based in Silver Spring, Md., has received four contracts worth more than $1.5 million from the technical assistance program since 1981. The company once shared an office and telephone number with the Council of 100, a black Republican group. At the time, Mrs. Jenkins was the group’s chairwoman.

In a telephone interview Friday, Mrs. Jenkins said One America ″has barely broken even″ on its HUD contracts and defended its work as essential aid to small and minority-owned businesses with little experience in dealing with the federal bureaucracy.

Mrs. Jenkins said she does not know Pierce and played down her political connections.

″Being a Republican has not yet been ruled illegal,″ she said. ″Neither has being a black Republican.″ She also dismissed the timing of Pierce’s approval, which came just three days before the change of administrations in January.

Pro-Mark is a Jackson, Miss., company that from 1985 through 1988 received $400,000 from HUD to provide technical advice on HUD programs to small and minority-owned business in the state of Mississippi.

Initial funding for Pro-Mark was approved by Gilliam, a former HUD deputy assistant secretary whose duties included oversight of the technical assistance program. (Gilliam was indicted in April for allegedly seeking to defraud the government in 1986 by making money off a Mississippi project he had funded with HUD money.)

Pro-Mark requested $240,500 to continue its HUD contract this year. Pierce approved the contract at $150,000, but Kemp aides have shipped the proposal back to HUD’s Atlanta regional office because of questions raised by current HUD officials.

Pierce has been recalled by the congressional subcommittee he appeared before in May and is scheduled to testify Sept. 15 and at least once more after that.

Since his earlier testimony, evidence of his involvement in certain HUD projects has surfaced.

A former agency official told congressional investigators she was ordered by Pierce to fund a Durham, N.C., project supported by the city’s then-mayor, Charles Markham, a former law partner of Pierce’s.

And files kept by Deborah Gore Dean, who for three years was Pierce’s top aide, indicate Pierce also took a personal role in projects involving jazz musician Lionel Hampton and former GOP Sen. Edward Brooke.

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