Pierce Gave Grant to ‘Down and Out’ Friend, Panel Told : Housing: A former aide to the HUD secretary testifies that the $350,000 project had no backing by New Jersey officials.

Former Housing Secretary Samuel R. Pierce Jr. so abused discretionary funds under his control that he once approved a $350,000 grant just to help a “down and out” former campaign manager who was promoting a project, a House subcommittee was told Friday.

DuBois L. Gilliam, a former deputy assistant secretary at the Department of Housing and Urban Development, described Pierce’s alleged generosity with public funds to members of the employment and housing subcommittee of the House Government Operations Committee.

Gilliam, who is serving a prison term for manipulating grants, has testified that many HUD grants awarded during the Ronald Reagan Administration went to friends or political favorites of top agency executives.

Gilliam is the first former HUD official to contradict Pierce’s sworn testimony that he was a “hands-off” manager who did not involve himself in funding decisions and directed his subordinates to make awards based on merit.

But Paul L. Perito, Pierce’s Washington attorney, attacked Gilliam’s credibility as a witness, calling him “an admitted cheat and a liar,” and adding: “Mr. Pierce denies all allegations of wrongdoing and improper conduct.”

He said that Gilliam’s testimony “doesn’t amount to a loaded water pistol.”

In his third day of testimony Friday, Gilliam said that Pierce arranged a $350,000 grant for a housing project proposed by Sam Singletary, Pierce’s friend and former political manager, even though it was not backed by state or municipal officials in New Jersey.

Gilliam said that Pierce told him to travel to Camden, N.J., to persuade city officials to support the project so a nonprofit private group in which Singletary was a partner could receive the money.

The grant procedure was supposed to work the opposite way, starting with requests from states or cities, Gilliam noted.

Gilliam’s testimony indicated that Pierce used his $60-million discretionary fund as “a personal piggy bank and a slush fund for his friends,” said Rep. Tom Lantos (D--San Mateo), who has directed the panel’s yearlong investigation of the HUD scandal.

“For those individuals who knew Secretary Pierce or were well-connected politically, the name of the program was Dialing for Dollars,” Lantos said.

The subcommittee chairman said that Gilliam had provided “credible” testimony, despite the fact he is serving an 18-month sentence at the Lompoc federal correctional facility in California for conspiracy to defraud the government.

Gilliam, who has acknowledged receiving at least $100,000 in payoffs, gratuities and free trips during his two-year tenure at HUD, testified under a federal grant of immunity from further prosecution.

Gilliam reiterated that Pierce frequently rewarded friends and political allies with HUD grants.

In the New Jersey case, “Secretary Pierce indicated he wanted to help Mr. Singletary get some funds,” Gilliam said. “He was down and out . . . and I did so. He told me to fund the project.”

Gilliam also testified that Pierce directed a $257,000 grant to another group because it was linked to his brother, Burton Pierce. “He told me to fund the project,” Gilliam repeated.

Gilliam said that during meetings with Pierce and his executive assistant, Deborah Gore Dean, political sponsors of projects would be mentioned while the merits of proposals would not be discussed.

“I would give him the name of the company and the political sponsors,” he said. “Boom, boom, boom--and that’s the way we would conduct the meeting.”

Stuart Weisberg, the subcommittee counsel, said that Pierce’s discretionary funds were supposed to allow him to respond quickly to emergency situations when time would not permit competing proposals. Pierce’s conduct, as described by Gilliam, would represent an abuse of that authority, Weisberg said.

Pierce is under a criminal investigation by newly appointed independent counsel Arlin Adams, a former federal judge in Philadelphia, who is supposed to determine whether Pierce conspired to defraud the government in abusing the HUD grant program.