Special Senate Panel Appointed to Investigate Scandals at HUD

The chairman of the Senate Banking Committee named a special panel Tuesday to investigate the multibillion-dollar scandals at the Department of Housing and Urban Development, just as a House probe is winding down.

Sen. Bob Graham (D-Fla.) was named chairman of the new Special Investigations Subcommittee by Sen. Donald W. Riegle Jr. (D-Mich.), chairman of the banking committee.

Graham said no decision had been made on whether the panel would seek testimony from former HUD Secretary Samuel R. Pierce Jr., who has refused to testify before a House investigative panel on constitutional grounds of self-incrimination, or three of his former aides who also have refused to testify.

“Our goal is to make sure our housing program doesn’t get sacked again,” Graham said. “Working with our colleagues in the House, we’ll establish causes for the breakdown at HUD and propose corrective legislation.”

The chairman of the House subcommittee, Rep. Tom Lantos (D-San Mateo), said last week after Pierce’s second refusal to testify that his panel was about to wrap up the hearings it began last spring.

Graham said Lantos “has been very generous in his offer to assist us” in pursuing the investigation and finding legislative remedies for the influence peddling, fraud and mismanagement that HUD Secretary Jack Kemp has acknowledged he found at the department.

Graham presided over a hearing by the full banking committee on the HUD scandal, in which two former Reagan White House officials denied that they had exerted any influence on behalf of specific projects seeking HUD grants.

A third witness, William M. Diefenderfer III, deputy director of the Office of Management and Budget, acknowledged that “a massive failure of collective oversight responsibilities, which includes OMB,” was responsible for the HUD scandals.