Panel Drops Probe of Two HUD Projects

It now seems unlikely that two controversial projects approved by the federal Housing and Urban Development department will come up for hearings before a congressional subcommittee.

Stuart E. Weisberg, staff director of the subcommittee, said last year that the two Southland projects--Robinson Ranch in southern Orange County and Desert Falls in Riverside County--might be the subject of subcommittee hearings that ran through much of the second half of 1989.

Revelations of political cronyism and mismanagement at the federal agency last year put HUD at the center of one of Washington’s biggest scandals in years.

But the subcommittee’s investigation has become so broad, Weisberg said Monday, that the committee is concentrating only on “the big picture” and not on individual projects. Hearings resume next week on irregularities in public housing authorities.

Robinson Ranch prompted a 1985 HUD internal investigation of allegations that William Lyon, a prominent Orange County home builder and major Republican donor, had bought the 827-acre ranch from HUD for a mere $16 million despite warnings from HUD’s general counsel that Lyon’s was not the best of four bids under consideration. Lyon repeatedly declined to comment publicly on the allegations.

Desert Falls was a luxury condominium neighborhood built with federal aid around a golf course in Palm Desert. Members of the Binger family, a prominent Midwestern Republican clan, were investors when the project suddenly went bankrupt, sticking the federal government with a $10-million tab.

A subsequent Times investigation found that the Binger family is still a major investor in the project and may actually have benefited from the bankruptcy, since HUD subsequently dropped its requirements that the owners include a few less profitable, affordably priced units among the hundreds of luxury condos.

Both projects were part of Title X, a HUD program shut down last year by HUD Secretary Jack F. Kemp, who took over the agency from former Secretary Samuel R. Pierce. Pierce is widely blamed by members of Congress for many of the agency’s problems, of which Title X was a small part.

The HUD scandals vaulted the subcommittee, formally known as the House Government Operations Committee’s employment and housing subcommittee, and Chairman Tom Lantos, a San Mateo Democrat--into the limelight last year. But the scandal began fading from the headlines before the year was out.