Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, May 2, 1990 TAG: 9005020657
SECTION: NATIONAL/INTERNATIONAL PAGE: A-12 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
DuBois Gilliam, an imprisoned former deputy assistant secretary of the Department of Housing and Urban Development, resumed testimony today about scandals at HUD and described in detail how officials there steered projects to political friends, including members of Congress.
Gilliam, who is serving an 18-month federal prison sentence, was testifying under a court grant of immunity from further prosecution.
Under questioning by Rep. Tom Lantos, D-Calif., chairman of the House panel investigating HUD, Gilliam said HUD officials engaged in a grant swap in order to provide $500,000 requested in 1985 to conduct a feasibility study for a Hispanic trade center in Kansas City, Mo.
Gilliam said Hector Barreto, then president of the U.S. Hispanic Chamber of Commerce, sought a HUD grant for the project, but he first told Barreto it was not qualified under Secretary Samuel Pierce's discretionary fund for special projects.
He said he got a call that afternoon from Deborah Gore Dean, assistant to Pierce, saying Barreto had met with Bush and that "she had received a call from the vice president's staff asking about the grant, and indicated her desire to try to help get the project funded."
As a result, Gilliam said, he persuaded a Kansas City assistant city manager to provide the grant from the city's Community Development Block Grant funds, provided by HUD, and that in turn he arranged to have a special grant go to Kansas City to replace that money.
"In other words, let's make a deal - you do this and I'll do this," Gilliam said.
He did not name the person in the vice president's office. Gilliam said he was unclear about the connection to Bush's office, but said Dean had "indicated something . . . about Mr. Barreto going on the vice president's plane."
Lantos, before the meeting, described the case this way: "We will hear testimony from Mr. Gilliam about special projects - how a particular project was funded at the request of `someone' in the office of the vice president, in order to get a Hispanic leader to accompany the then-vice president on a plane trip to Puerto Rico."
Once a trusted assistant to Pierce during the Reagan administration, Gilliam painted a picture of rampant political abuse at the agency during his initial appearance before the House Governmental Operations subcommittee on employment and housing.
His second round of testimony involved so-called HUD special project grants, which were made from the secretary's discretionary fund.
The program was established to provide aid in cases of natural disasters and other unexpected needs, without a competitive application process. Subcommittee staff director Stuart Weisberg said before today's hearing that although the money was administered at the secretary's discretion, political use of the fund would constitute an abuse.
"Discretion does not mean political," Weisberg said. "There was no intent [by Congress] that it be treated like a political action committee . . . to reward political friends."
On Monday, Gilliam disputed Pierce's assertion before the panel last year and in a subsequent magazine interview that he didn't decide who got federal grants and was a hands-off administrator.
Gilliam said Pierce himself ordered federal grants for particular projects. He said Pierce kept notes of which members of Congress and political friends supported projects, which he used when funding decisions were made.
His testimony was the first by a top HUD insider in more than a year of investigation by the panel into allegations of fraud, influence-peddling and political favoritism at the department.
Gilliam pleaded guilty to felony charges of accepting illegal gratuities while at HUD and conspiring to manipulate a housing grant to benefit friends.
Pierce's attorneys attacked Gilliam's testimony as motivated by a desire for early release from prison. Attorney Paul Perito accused Lantos' subcommittee of an "insatiable appetite for publicity."
Gilliam's testimony was not the first time Bush's name has arisen indirectly in the HUD scandal.
A former New York regional official of HUD, Alexander Naclerio, testified last fall that he had been sent by HUD officials to visit and facilitate funding of a Puerto Rico project proposed for a federal grant and that he understood that its developer, Delio Rojo, was a prominent backer of Bush.
by CNB