Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 17, 1990 TAG: 9004170551
SECTION: NATIONAL/INTERNATIONAL PAGE: A/3 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Kemp announced the action Monday after Paul Adams, inspector general of the Department of Housing and Urban Development, said the Federal Housing Finance Board contracts provided necessary work but were not well administered.
In a memo to board director Mary Bush, Kemp asked that eight recommendations Adams made in his report on the contract investigation be implemented immediately. They include establishing written, competitive contracting guidelines; hiring a chief contracting officer and adopting policies for employee ethics and hiring of outside consultants.
Kemp, in an interview with The Associated Press, said the report "puts to rest any suggestions that there was inappropriate conduct." He said he was "not particularly pleased" with the possible appearance of impropriety raised by the no-bid contracts Bush gave friends but that he stood by her.
At the same time, he said he was temporarily assigning a HUD attorney to the board as "my administrative assistant or executive assistant for two or three months."
Kemp effectively controls the finance agency because he is the only named member of its five-member board. He recruited Bush with the promise she would be nominated board chairwoman, but two weeks ago she agreed to be the agency's managing director after being told she would not be nominated. She had been serving as acting director.
The agency, created as part of last year's savings and loan bailout legislation, oversees the 12 regional Federal Home Loan Banks and controls up to $100 million a year in housing funds.
Aides said Kemp asked for the contracts review in mid-March immediately after HUD officials became aware of the no-bid contracts Bush awarded to friends with whom she served in the Reagan administration. They included Wendell Gunn, who later served for several months as Kemp's HUD chief of staff.
But an internal HUD memo obtained later by the AP showed that HUD Undersecretary Alfred DelliBovi was aware that Gunn was being paid by the agency in early February. DelliBovi's memo mentioning payments to Gunn was sent to six Kemp aides, including his two top deputies.
The memo was not addressed to Kemp and aides have said he did not see it. But Kemp acknowledged Monday that he should have called in Adams to investigate sooner.
"I admit that we should have jumped on this in February," Kemp said. "Was I late? Yes."
Kemp said he was aware months ago that Gunn had been helping Bush get the finance agency up and running, but "I thought it was more informal than formal. . . . I did not know about the process or the contract, but I assumed that we were following the right procedure."
by CNB