A House committee concluded yesterday in its final report on the Department of Housing and Urban Development scandal that former HUD secretary Samuel Pierce steered grants to political friends and misled Congress, but stopped short of accusing Pierce or anyone else of breaking the law.
The 271-page report adopted unanimously by the House Government Operations Committee defers the question of criminal violations to independent counsel Arlin Adams, who is investigating Pierce and the administration of several HUD programs during his tenure. Adams said he had received the report and would give it "very special consideration."
The report ends a 16-month investigation during which the Government Operations employment and housing subcommittee "uncovered widespread abuses, influence peddling, blatant favoritism, monumental waste and gross mismanagement" that cost taxpayers an estimated $2 billion during Pierce's tenure from 1981 to 1989.
"Secretary Pierce appeared before us in May 1989 and tried to distance himself from the abuses and political favoritism at HUD during his tenure," Rep. Tom Lantos (D-Calif.), the panel's chairman, said. "He stated that he 'never told these people to fund anything.' "
But Lantos said "other witnesses and a paper trail of documents suggest that he was directly and intimately involved in the abuses and favoritism."
The report concludes: "At best, Secretary Pierce was less than honest and misled the subcommittee about his involvement in abuses and favoritism in HUD funding decisions. At worst, Secretary Pierce knowingly lied and committed perjury during his testimony."
The panel asked Adams in July to expand his investigation of Pierce to include possible perjury. That request is pending.
Paul L. Perito, Pierce's lawyer, called the report "a rehash of stale and unfounded allegations, rank speculation and creative surmise."
Stuart Weisberg, staff director of the subcommittee, said the report contained "some new information" that undercuts Pierce's assertion that a former administrative assistant, Deborah Gore Dean, acted without his knowledge in awarding grants to the politically connected. She declined to testify before the subcommittee, citing Fifth Amendment rights against self-incrimination, as Pierce did after his initial testimony.
The report says a Florida housing project was awarded to a client of Pierce's former law firm, Battle, Fowler, Jaffin and Kheel, before Dean became his administrative assistant in June 1984. The client, a developer known as the Related Companies, was selected to build 108 apartments in Broward County, Fla., after the law firm contacted Lance Wilson, Dean's predecessor.
The report said the HUD Reform Act of 1989 has done much to remove political influence from the awarding of HUD funds. But the committee criticized Congress for earmarking money for housing projects in spending bills, a practice that "circumvents objective criteria, competition and merit," the report said.
It said a supplemental appropriations bill last year earmarked nearly $30 million for 40 housing grants. A spokesman for HUD Secretary Jack Kemp, who is praised in the report for his cooperation in the investigation, said a more recent appropriations bill earmarked even more money -- $54 million for 61 housing projects. The spokesman said Kemp opposes the practice.