New Testimony by Pierce in HUD Probe Postponed

A House panel investigating the Department of Housing and Urban Development said Tuesday that it has agreed to postpone a second appearance by former HUD Secretary Samuel R. Pierce Jr. until mid-September.

Pierce, who was scheduled to testify next week, requested the postponement, saying he needed more time to prepare for the hearing, said Rep. Tom Lantos (D-San Mateo), chairman of the House Government Operations subcommittee on employment and housing.

Lantos, in a letter to Pierce, said he agreed to the delay “based on your apparent difficulty in retaining counsel to represent you at the subcommittee hearing.”

Pierce had been scheduled to face questioning on Aug. 3 about his role in HUD approval of more than $15 million in grants and subsidies for a North Carolina project that was supported by one of his former law partners.

In the letter, Lantos said that because of the delay he expected Pierce to be ready at a Sept. 15 hearing to discuss both his role in the North Carolina project and his decision to lift restrictions on a major lender in a HUD program.

The lender, DRG Funding Corp., was taken off HUD probation after Carla Anderson Hills, a former HUD secretary who now is U.S. trade representative, met with Pierce and lobbied on behalf of the company.

DRG continued to have problems after the restrictions were lifted by Pierce, and defaults on its HUD-backed loans now total more than $500 million.

In other developments, the New York Times reported in today’s editions that former Sen. George Murphy of California had lobbied federal housing officials on behalf of Boston housing projects that later received millions of dollars in assistance. The paper attributed the disclosure to newly released HUD documents from the files of Deborah Gore Dean, a former senior housing official.

The documents show also that, while seeking assistance from HUD in 1985, Murphy discussed potential business deals with Dean, including a proposal for her to serve as a book agent on his memoirs.

Senior federal officials are discouraged and in some cases barred from discussing private business proposals with lobbyists seeking assistance from the government.

Murphy, now 87, a former Hollywood actor and longtime friend of former President Ronald Reagan, was a senator from 1965 to 1971.

He is the latest Republican to be linked to lobbying activity at HUD. In an interview with the New York Times, Murphy said that his book deal was not pursued and that his contacts with Dean were proper.

Also Tuesday, Housing Secretary Jack Kemp said in an interview with CBS Evening News anchorman Dan Rather that he believed “there’ll be some people that go to jail” and some “ought to go to jail” for their roles in the scandal. He did not identify any individuals.