Former Judge to Probe HUD Contracts : Housing: The independent counsel will look into charges that former Secretary Pierce showed favoritism in awarding grants.

Former federal Judge Arlin M. Adams was named Friday as independent counsel to investigate charges that former Housing Secretary Samuel R. Pierce Jr. illegally favored prominent Republican consultants in awarding multimillion dollar housing contracts.

Adams, 68, was appointed by a three-judge panel of the U.S. Court of Appeals at the request of Atty. Gen. Dick Thornburgh under a 1970 ethics in government law that calls for an impartial outsider to look into allegations against current or former high-ranking officials. Thornburgh recommended the appointment after 19 of the 20 Democrats on the House Judiciary Committee urged him to seek a special prosecutor to examine charges concerning Pierce’s handling of Department of Housing and Urban Development funds.

Pierce, who headed the housing agency for eight years during the Ronald Reagan Administration, has denied the allegations against him, once testifying that he was not a “hands-on” manager.

Currently a New York lawyer, Pierce twice invoked his Fifth Amendment privilege against self-incrimination when summoned to further testify to a House subcommittee investigating abuses in HUD’s Moderate Rehabilitation rent subsidy program.

Pierce’s Washington attorney, Robert Plotkin, issued a statement welcoming the selection of Adams so the inquiry can proceed. “We have every reason to expect that Judge Adams will conduct a fair and impartial investigation,” Plotkin said.

Adams, who spent 17 years as a judge on the U.S. Court of Appeals for the 3rd Circuit before he resigned in 1986 to return to private law practice in Philadelphia, was appointed to the bench by President Richard M. Nixon.

In 1988, Adams was approached about taking the No. 2 post at the Justice Department at a time when Edwin L. Meese III, then attorney general, was under fire on ethics charges. Adams declined the offer.

The judicial panel that selected Adams said he “brings to this investigation the judgment, experience and ability acquired by many years of service as a federal circuit judge, as a private practitioner and as a recognized leader of the courts and the bar of the nation.”

Under the jurisdiction outlined by the appointing panel, Adams was authorized to determine if Pierce and other HUD officials “may have committed the crime of conspiracy to defraud the United States or any other federal crimes . . . relating to the administration of the selection process of the department’s Moderate Rehabilitation program from 1984 through 1988.”

Pierce said in testimony last May that he took no part in decisions on which developers would get the scarce “Mod Rehab” funds to rehabilitate low-income housing because he delegated his authority to a three-member committee.

Other witnesses before the House hearings, however, testified that Pierce gave orders to make contract awards in more than one instance.

Deborah Gore Dean, who was executive assistant to Pierce from 1984 to mid-1987 and reportedly played a major role in selecting recipients for Mod Rehab grants, also invoked the Fifth Amendment and refused to testify before House investigators.