Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, April 30, 1990                   TAG: 9004300175
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: PHILIP SHENON THE NEW YORK TIMES
DATELINE: WASHINGTON                                LENGTH: Medium

EX-HUD AIDE TO TIE SCANDALS TO TOP OFFICIALS

The former aide, DuBois L. Gilliam, is serving an 18-month prison sentence on federal conspiracy and gratuities charges.

His credibility has been questioned repeatedly by attorneys for Pierce, who say their client has done nothing wrong.

But Rep. Tom Lantos, the chairman of a House panel that will hear Gilliam's testimony, said he regarded the witness as highly credible.

Congressional officials say Gilliam is emerging as perhaps the most important witness to come before Congress with information on one of the major scandals left from the Reagan administration.

Gilliam is scheduled to begin three days of public testimony today before the government Operations Subcommittee on Employment and Housing.

He has been granted immunity from further prosecution based on his testimony, and is the first witness to receive immunity in the congressional investigation of political favoritism and fraud at the Department of Housing and Urban Development.

In a series of interviews, Gilliam, who was at HUD from 1984 until 1987, said he would describe how the White House ordered federal housing officials to make multimillion-dollar grants as favors for lawmakers and prominent Republican lobbyists.

In one case, Gilliam said, he was told by officials within the housing agency and on Capitol Hill that a large grant was approved in 1986 as part of a deal that helped Edwin Meese win Senate confirmation as attorney general the year before.

Gilliam said he also would describe how election-year housing awards were directed to certain congressional districts to help Republican candidates, including incumbent senators, in tough election fights.

Gilliam's assertions were disputed by people involved in the grants.

In interviews in Washington and at a federal prison camp in Lompoc, Calif., Gilliam said he is prepared to contradict testimony from Pierce and to assert that politics touched virtually ever major HUD program in the Reagan years.

At a hearing before the Lantos subcommittee last May, Pierce was asked whether he had ordered aides to approve projects under the department's Moderate Rehabilitation Program. He replied, "I never told these people to fund anything" and suggested that if there was political favoritism at HUD, his aides were to blame.

Gilliam is the first witness to assert that the Reagan White House ordered financing for politically desirable housing projects.

He does not charge that President Reagan was personally involved in the manipulation of federal housing programs. Instead, Gilliam said, the orders sometimes came to HUD through White House budget officers.

It is widely acknowledged that long before the Reagan administration, politics played an important role in the distribution of federal housing grants.

But Gilliam's testimony conforms with that of other witnesses who say that political favoritism reached an unusual level during Pierce's tenure at the department, and that HUD rules frequently were waived to assist Republican lobbyists and lawmakers, even as the federal housing budget was slashed.