Raising the Roof About HUD

With fresh allegations of wrongdoing at the U.S. Department of Housing and Urban Development, Atty. Gen. Dick Thornburgh has ordered an investigation that could lead to putting an independent counsel on the case. This is something that he balked at doing earlier. But now it should be avoided no longer.

The Thornburgh inquiry will judge whether there is enough evidence of criminal activity to warrant a special counsel, and will focus on two questions: Did former HUD Secretary Samuel R. Pierce Jr. conspire with top aides to award tens of millions of dollars in housing grants based on political favoritism? Did he lie when he testified that he was not a “hands-on” manager and his top aides decided who got scarce housing grants?

After one not very revealing appearance before a House subcommittee, the former housing secretary has refused to talk at all about his 8-year tenure at the federal agency for housing. His stonewalling has not stopped the flood of disclosures that losses measured either in cash for taxpayers or in non-existent roofs over poor people’s heads could exceed $4 billion.

In the meantime, Jack Kemp, who took over from Pierce, is doing his best to get things under control, a best that includes telling Congress precisely what it can do with $91.7-million worth of pet pork-barrel projects in home districts. This is in keeping with his promise to base all grants in the future on need, merit, competition and objective criteria.

Favoritism might be called the “organizing principle” at HUD during the Reagan years. Well-connected Republicans got hundreds of thousands of housing dollars for steering scarce housing subsidies to developers. What poor families got in that climate was longer waiting lists for subsidized housing; in that same climate, the ranks of homeless men and women also grew.

The latest allegations focus directly on Pierce. According to new reports, he ignored staff objections and awarded $350,000 to a close friend and former campaign adviser for two projects in New Jersey. At the time Pierce’s friend was under indictment for stealing government funds from a job training program, a charge to which he later pleaded guilty.

This raises another question that Thornburgh should ask. According to the mayors of the involved cities, East Orange and Camden, the projects never got beyond the planning stage. What, he should want to know, happened to the money?