A show hearing staged in Chicago last Saturday by the Department of Housing and Urban Development (HUD) followed months of infighting between federal bureaucrats and local authorities over public housing. Typically, the Clinton administration opposes reform and choice. Not so typically, the reformers this time are Democrats.

The hearing itself constituted federal intransigence. The Chicago Housing Authority (CHA) was rebuffed in seeking joint hearings. Instead, HUD trotted out 500 residents protesting plans to transform Chicago's worst-in-the-nation public housing by demolishing dilapidated housing skyscrapers and replacing them on the same sites with low-rise structures. The enemy is not the "far-right" GOP but Chicago's Democratic establishment presided over by Mayor Richard M. Daley.

"This is a sham. You cannot defend public housing in Chicago," Rahm Emanuel, CHA's vice chairman, told me. Yes, this is the same Rahm Emanuel who spent six years in Washington as President Clinton's top political operative and favorite White House aide. If even he can't get HUD to enter the 21st century, who can?

Like most Clinton Cabinet-level departments, HUD plays a free hand. Under Secretary Andrew Cuomo, that free hand looks suspiciously to Chicago reformers as if it is condemning low-income residents to rotting, crime- and drug-infested, badly managed housing.

Mayor Daley is perplexed by HUD's attitude. "Locally, we should be able to handle this," he told me. "It's not a Washington problem."

A high-ranking HUD official told me he considers public housing "a blunder of historic proportions," but questioned what Chicago plans. He protested demolishing all 38,000 units (actually, 17,000 are targeted), complained that no formal application had been submitted (actually, the plan is due Dec. 1) and contended the CHA's $1.5 billion request is excessive (actually, Chicago is asking for no more than it usually gets).

Over five years, CHA would build or rehabilitate 24,000 units. By June 2000, private management would take over all Chicago's public housing, with participation by residents. By cutting administrative costs, 40 percent more money will be spent on property maintenance.

"We have had to fight HUD every step, and every step has been difficult," said Emanuel. "HUD has been battling the local authorities all the way." Another Chicago description of the feds: "Their basic attitude is screw you." CHA Chairman Phillip Jackson told me: "What they don't want to give us is flexibility from their restrictions."

The feds were outraged when the locals exposed waste and abuse in Chicago public housing under HUD receivership that ended only this year. Last July 15, Jackson opened a warehouse to display more than $700,000 worth of bicycles, computers and air conditioners--purchased by the federally controlled officials but unused.

That revelation outraged Howard Glaser, HUD's deputy general counsel for programs and regulations. "What kind of bull---- is this?" asked Glaser, in a Washington-to-Chicago fax sent to CHA's David Yudin and Julia Stasch. Later in the day, Glaser decided what kind it was. "Consider your deal cancelled," he told Yudin in a second fax.

Thanks to White House intervention, the "deal" with the new CHA was reinstated. But Washington's obstruction continued. A federal grant of $148.7 million, approved by Congress, was due in early October but has been held up. On Oct. 19, CHA comptroller Charlene Simmons wrote in an interoffice memo: "The HUD local office would not indicate the reason why the budget will not be approved. This delay will put the CHA in a position where we will not be able to have our buildings prepared for the winter."

The feds were clearly part of last weekend's protests by residents: a Friday march on City Hall and the Saturday hearing. "The days in which federal officials in Washington work behind closed doors with City Hall to decide what's best for local neighborhoods are over," proclaimed Harold Lucas, HUD's assistant secretary for public housing.

That is pure posturing. CHA has held 18 meetings to include residents in the process. The spectacle of a Clinton mid-level appointee's demagoguery about Daley's City Hall suggests a political process gone awry.

Cuomo has never talked to the mayor about public housing. "Mr. Daley turns on his political machine and his press machine," the high-level HUD official told me. "He's not going to steamroller us by having a political operative [obviously referring to Emanuel] telephone the White House."

And where does the president stand between Richie Daley and Andrew Cuomo? Nobody knows.

(c) 1999, Creators Syndicate Inc.