Aide Says Pierce Used Favoritism in HUD Grants

An aide to former Housing Secretary Samuel R. Pierce Jr. testified Monday that Pierce often awarded federal housing grants on the basis of friendship and political favoritism.

The testimony of DuBois L. Gilliam, who is serving an 18-month prison sentence on federal conspiracy and acceptance of gratuities charges related to his job at the Department of Housing and Urban Development, led some members of a House subcommittee to declare that Pierce may have perjured himself when he appeared before their panel last year.

In his only appearance last May before a subcommittee headed by Rep. Tom Lantos (D-San Mateo), Pierce insisted under oath that he always had instructed his subordinates to recommend housing grants on their merits, adding: “I never told these people to fund anything.”

Pierce currently is the subject of a criminal investigation being conducted by independent counsel Arlin M. Adams, a former federal judge, to determine if Pierce illegally favored Republican consultants in awarding multimillion dollar HUD contracts.

Members of the employment and housing subcommittee of the Government Operations Committee, after listening to Gilliam, said his testimony seemed to be in direct conflict with Pierce’s when Gilliam declared: “The policy while I was at the Department of Housing and Urban Development (in the Ronald Reagan Administration) dealt explicitly with political favoritism. I know for a fact the secretary made decisions (on HUD grants).”

Rep. Ted Weiss (D-N.Y.) said Gilliam’s testimony “shows that Mr. Pierce had more than just a casual involvement” in the grant-selection process.

Gilliam, who gave his testimony under a grant of immunity from further federal prosecution, was the first former HUD official to contradict Pierce’s sworn testimony. Two other former high-ranking department officials, Deborah Gore Dean and Lance H. Wilson, have refused to testify before the panel. Pierce, after his initial appearance last May, also has refused to testify further on advice of his counsel.

Gilliam was deputy assistant secretary of the department from June, 1985, to September, 1987.

Paul L. Perito, Pierce’s Washington attorney, attacked Gilliam’s credibility immediately after the hearing, calling him “an admitted felon, bribe-taker and fixer who corrupted the office he served.”

“It is absurd to match his credibility against that of Secretary Pierce,” Perito said.

Gilliam, 38, said he had helped direct a multimillion-dollar program called Urban Development Action Grants. Pierce personally gave him orders on at least three occasions, he said, to fund projects regardless of their merit.

In the case of a Florida project, he quoted Pierce as saying he would fund it because it was being promoted by former HUD official Wilson, even though Pierce accused the developer, Leonard Briscoe, of being “a crook.” Briscoe, in fact, was paying Gilliam tens of thousands of dollars in bribes to push the project, Gilliam testified. But Gilliam said he had no knowledge that Pierce ever received any illegal payments or favors from any applicants. Briscoe was debarred as a HUD contractor last year.

Gilliam said HUD under the Reagan Administration was a “domestic political machine” in which Pierce and other top officials paid close attention to who was supporting a grant application. Lists of projects and who was supporting them often were sent to the White House and the Office of Management and Budget, and Pierce received suggestions from those agencies on who should receive the awards, the witness said.