Ex-Bush Fund-Raiser Changes HUD Testimony

The chief fund-raiser for President Bush’s 1988 campaign changed his previous testimony Thursday about how his consulting firm had gotten $392,000 for making high-level contacts with officials of the Department of Housing and Urban Development during the last four years.

Frederick M. Bush, who is not related to the President, acknowledged much closer ties with Deborah Gore Dean, a powerful aide to former HUD Secretary Samuel R. Pierce Jr., than he did during a May 25 appearance before House investigators.

Dean, who controlled the allocation of sought-after discretionary grants under the moderate rehabilitation low-income housing program, invoked the Fifth Amendment privilege against possible self-incrimination when called to testify earlier. She has said, however, that she would testify if given access to HUD documents and Pierce’s personal logs of visitors and telephone calls.

Admits More Meetings

Bush acknowledged Thursday that rather than seeing Dean only four or five times while his company had 13 grant requests pending before HUD as he previously had said, he actually met with her on 15 to 18 occasions, including lunches and dinners.

He also revised his earlier testimony to concede that he probably had been advised indirectly by Hunter Cushing, then a lower-ranking HUD official, to see Dean for help on a proposal for a federal rent subsidy that earned him a consulting fee of $160,000.

Although Cushing accompanied Dean and Bush to dinners as his guests on two occasions, Bush said, the three never discussed HUD business at these “social events.”

Testifying under oath, Bush said that he never used political influence and, despite his leading role in raising funds for the presidential campaign, that he has no political clout.

Expresses Disbelief

“I don’t think there is a child over the age of 6 who can believe that,” said Rep. Tom Lantos (D-San Mateo), chairman of the House Government Operations subcommittee on employment and housing, which called Bush back to the witness chair Thursday.

Bush was a fund-raiser for vice presidential candidate George Bush in the 1980 campaign and served as deputy chief of staff to the vice president for two years ending in 1983.

Other lawmakers were equally skeptical about disclaimers by Frederick Bush, who has been nominated by the President to be ambassador to Luxembourg, that he did not exert political influence in his contacts with Dean.

“I try to go to the top,” Bush said. “We wanted to find out what the procedures were.”

But Rep. Barney Frank (D-Mass.), protested: “This is the most preposterous answer. . . . If you want to mail a letter, do you go to the postmaster? I just don’t believe you. This was a case of cashing in on political influence.”

Rep. Christopher Shays (R-Conn.), who elicited Bush’s revised comments about how many times he met with Dean during his efforts to get HUD blessing for clients’ grant proposals, said: “When you come before us and deny you had political influence . . . that defies my sense of logic.”

And Rep. Charles E. Schumer (D-N.Y.) told Bush: “One gets the feeling you’re not trying to come clean with the committee.”

Not Well-Prepared

Bush, however, insisted that he was not well-prepared before his May 25 appearance, but since then had consulted with his former partner, Michael Govan, and his business associate, James Nunes, to refresh his recollection.

“I was telling the truth,” he shouted at one point in Thursday’s hearing when his previous testimony was challenged. “I just don’t have a good memory.” Bush said he was personally involved “only in the periphery” of the HUD-related projects and his testimony Thursday was sprinkled with such phrases as: “I was not the operational person on that” and “It was not even my idea.”

He also insisted that his firm deserved to win a $253,000 technical assistance grant to help the city of San Juan, Puerto Rico, make the best use of its community development block grant, despite reservations by career HUD employees about the proposal.

Bush said that the proposal was rewritten six times to meet criticisms and took two years to process through HUD. But Lantos said that the Bush firm won the grant in a clear case of political decision-making rather than in a victory on the merits.

Paid $6,000 From San Juan

The firm kept only $50,000 of the sum, Bush said, and paid $203,000 to other consulting firms to do most of the work. At the same time, he said, his firm was receiving $6,000 from the city of San Juan to represent its interests in Washington.

Bush acknowledged that a promotional brochure exaggerated his firm’s contacts with the White House and its experience in dealing with a half-dozen federal departments. He said it was a “fairly gross overstatement.”

He defended the document, however, saying: “But this is salesmanship--we were trying to sell ourselves as best we know how.”

In a related matter, a congressional panel produced a memorandum on Thursday linking a member of George Bush’s vice presidential staff to a project that has figured in alleged influence-peddling in a federal housing program.

The memo, dated June 10, 1987, was sent from Dean to Tony Benedi, coordinator of special projects in the vice president’s office.

The memo details more than $2 million in HUD funding to the city of Bayamon, Puerto Rico, during fiscal years 1986 and 1987, information Dean provided “per your request” to Benedi.

Although no HUD inspector general’s investigations at that time involved Bayamon, the city had been asked to repay $1 million to the agency.

‘Potentially Dangerous’

“If advance work is handled properly, this should not present a problem, but it is potentially dangerous,” Dean said.

Earlier this week, President Bush said he would accept some responsibility for alleged influence-peddling, favoritism and mismanagement in several HUD programs while he was vice president in the Ronald Reagan Administration.

“If you want to assign blame to the vice president for what happened over the past . . . eight years, OK, that’s fine, I accept it,” President Bush said. He added that he wanted to make sure there is no recurrence of “cronyism” and “special favors” in awarding government contracts.