2 Ex-HUD Officials Dispute Pierce on His Role in Funding Decisions

Two former officials of the Housing and Urban Development Department today contradicted the claim of ex-HUD Secretary Samuel R. Pierce Jr. that he was not directly involved in deciding which housing projects should be funded.

The officials told a House Government Operations subcommittee that Pierce overruled nearly unanimous recommendations of the department’s professional staff and directed approval of a rehabilitation project in Durham, N.C., sought by Pierce’s former law partner.

Rep. Christopher Shays (R-Conn.) described the testimony as “frankly devastating” in the subcommittee’s continuing investigation of fraud, influence peddling and other abuses at HUD during President Reagan’s Administration.

Rep. Charles E. Schumer (D-N.Y.) suggested that as a result of testimony about Pierce’s role “the factual noose seems to be tightening around his neck.”

The subcommittee heard today from Shirley Wiseman, who served at HUD from 1983 to 1985, and Janet Hale, who succeeded Wiseman as general deputy assistant secretary. Both said the plan to turn a former hosiery mill in Durham into a housing project for elderly residents was opposed consistently by HUD’s professional staff, but both were told Pierce wanted it funded.

The project was sought by Pierce’s one-time law partner, former Durham Mayor Charles Markham, who was seeking HUD financing for the North Carolina project.

The project eventually was funded despite staff findings that the building was too close to railroad tracks, was dangerous because of leftover chemical wastes and would have required several subsidies and waivers. Its developers received about $16 million in rent subsidies, grants and tax credits.

Tells of Instructions

Wiseman said she was told by Deborah Gore Dean, Pierce’s executive assistant, that the project should be approved for funding and Pierce wanted it approved.

Wiseman said when she refused to approve it she was called by Pierce. “This was the only time I ever recollect the secretary calling me and telling me to fund something,” she told the subcommittee.

Wiseman said Pierce’s exact words to her were, “I want the project funded.”

“I can’t fund it but I will send it upstairs to you,” Wiseman said she told Pierce.

Wiseman said she remained convinced the project was “a bad business deal” and refused to approve it despite Pierce’s intervention, sending it to his office unsigned. She left HUD in 1985 for other reasons and was replaced by Hale.

Hale said “the next day” after she took over as deputy assistant secretary she was contacted by Dean, who asked her to sign papers needed to carry out funding for the Durham project Pierce had authorized.

Sought Pierce Meeting

Hale said she signed the papers but later, when she was asked to sign needed waivers, she told Dean of her concerns about the project and tried to arrange a meeting with Pierce. The meeting never took place, she testified.

“I wanted to be sure that Deborah or the secretary understood there would be tremendous opposition (from HUD staff),” Hale told the subcommittee. “To my knowledge, there was no one else (beside Pierce and Dean) who supported the project in the building.”

Dean, using Fifth Amendment protections against self-incrimination, refused in July to testify before the subcommittee. Some reports have indicated she was negotiating for immunity from prosecution, but committee Chairman Tom Lantos (D-San Mateo) denied it.