The House subcommittee that investigated the scandals at the Housing and Urban Development Department has asked independent counsel Arlin M. Adams to widen the scope of his investigation of former HUD secretary Samuel R. Pierce Jr. to determine if Pierce steered contracts to his former law firm.
All eight members of the the House Government Operations subcommittee on employment and housing also asked Adams to examine one area that Attorney General Dick Thornburgh specifically excluded in his request for the appointment of an independent counsel -- whether Pierce lied to Congress when he testified that he did not direct subordinates to fund specific HUD projects.
The subcommittee's request, sent to Adams yesterday, is the culmination of 14 months of investigation and 27 hearings into allegations of influence-peddling, fraud and mismanagement at the housing department under Pierce. Although the committee has no legal standing with the prosecutor, congressional investigators said they believed Adams should consider every element of the case.
The letter, subcommittee members wrote, "should not be viewed as an indictment of Secretary Pierce, nor as an accusation that Secretary Pierce is guilty of any crime. It does, however, raise serious and troubling questions that require further investigation."
In a statement, Adams said he found the congressional letter to be "thoughtful" and said he would "review it promptly and thoroughly and determine what recommendations to make to the Attorney General."
A Justice Department spokesman said yesterday that Thornburgh had not seen the subcommittee request and would have no comment.
By law, any request for an expansion of the inquiry must be made through Thornburgh to the special three-judge panel that appointed Adams. The grand jury that is continuing its investigation into the Iran-contra affair is also investigating HUD. Adams has been directed to determine whether Pierce and others were involved in a conspiracy to defraud the U.S. government on the moderate rehabilitation, Urban Development Action grant or technical assistance programs.
In one instance cited in the letter, Pierce's executive assistant, Deborah Gore Dean, assisted a partner in Pierce's former New York law firm, Battle, Fowler, Jaffin and Kheel to obtain moderate rehabilitation funds for an apartment project in Amherst, N.Y.
"In light of Secretary Pierce's long and close relationship with his former law firm . . . it defies logic and reason that Ms. Dean would have assisted Battle, Fowler in obtaining these scarce and much-in-demand units for the . . . project on her own without the direct and intimate involvement of Secretary Pierce," the congressmen wrote in their letter to Adams.
Pierce had told collegaues that he expected to return to his old firm after leaving HUD, but that job fell through after the HUD scandals came to light.
Battle, Fowler managing partner Thomas Glynn said yesterday that his firm was engaged in nothing improper. "We believe that if the special prosecutor or any other impartial body should examine the matter, they will reach the same conclusion," Glynn said.
Paul L. Perito, Pierce's attorney, called the letter a "grouping of faulty conclusions based only on surmise, innuendo or conjecture" and said it was improper to appeal to Adams rather than to Thornburgh.
Subcommittee chairman Tom Lantos (D-Calif.), however, said his panel has maintained "a very proper amd arm's length" relationship with Adams's office and decided to give the information to him rather than Thornburgh in order to aid his investigation.
The subcommittee also raised questions about HUD's failure to prevent massive losses incurred in the department's coinsurance program, which provided government guarantees for privately insured multifamily housing projects.