Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 30, 1990 TAG: 9004300364
SECTION: NATIONAL/INTERNATIONAL PAGE: A/3 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Dubois Gilliam, once deputy assistant secretary of Housing and Urban Development, told a House investigative panel that "the policy while I was at HUD dealt explicitly with political favoritism."
"If you were well-connected in political circles, your application got strong, strong consideration," he said.
Gilliam, who once was in line to become Pierce's executive assistant, is serving an 18-month prison sentence on federal conspiracy charges involving abuse of HUD programs.
He began today the first of three days of testimony before a House panel that has spent a year developing the HUD scandals and was testifying under a grant of immunity from further prosecution.
Rep. Tom Lantos, D-Calif., chairman of the investigating subcommittee, called Gilliam "the key missing piece in the jigsaw puzzle" of the HUD scandal during the Reagan years.
Lantos asked Gilliam if he would agree with statements Pierce made in a magazine interview last September and to his committee in May 1989, saying he never told his top assistants to fund particular projects seeking HUD grants.
"I know for a fact the secretary made decisions" on HUD grants, Gilliam said.
He said that Deborah Gore Dean, once Pierce's executive assistant, would not allow approval of HUD grants under the secretary's discretionary program "without first clearing it with him."
Gilliam said that at his suggestion Pierce ordered a career HUD employee transferred because the employee had raised suspicions about a financial commitment for a proposed project offered by a former Pierce aide, Lance Wilson, who was then working for a Wall Street investment firm.
Gilliam agreed with Lantos' description of Wilson's financial commitment as "fraudulent." Lantos described Pierce's order transferring Sowell as "in some ways the single most sickening aspect" of the HUD scandals.
The New York Times, citing 12 hours of interviews with Gilliam in Washington and at the prison where he is serving his sentence, quoted Gilliam as saying: "Politics was a big part of how HUD operated, and Pierce was involved in all of that. So was the White House. There was influence from 1600 Pennsylvania Avenue."
The Times quoted Gilliam as saying: "Pierce came to trust me because I was smart. I could remember things without writing them down. I knew how HUD programs operated and I kept my mouth shut."
Pierce has invoked his Fifth Amendment right against self-incrimination in refusing to testify before the committee probing allegations of influence peddling, mismanagement and political favoritism in federal subsidies.
Gilliam's testimony about UDAG grants takes the congressional investigators into a program largely ignored in previous hearings. At hearings later in the week he is to testify about grants under other programs, including several administered directly from the secretary's discretionary fund.
"We definitely will open up new areas," Lantos said in an interview Friday. "He will deal with projects involving the secretary."
A special prosecutor, Arlin Adams, is conducting a more narrow investigation of actions by Pierce and other top officials in another program that provided subsidies for rehabilitation of low-income rental housing.
Gilliam received a federal court's grant of immunity, sought by Lantos' panel, that means his testimony cannot be used against him. He has been in Washington for two weeks going over HUD documents and preparing for the testimony with committee staff attorneys.
"He has a very good memory," said staff director Stuart Weisberg, "particularly when you give him actual documents."
by CNB