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

DATE: THURSDAY, February 23, 1995                   TAG: 9502230084
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Medium

WATT CHARGED IN HUD PROBE

President Reagan's interior secretary, James Watt, was charged Wednesday with lying to Congress and a federal grand jury about his use of political connections at the Department of Housing and Urban Development to help private landlords and developers obtain millions of dollars in low-income housing funds.

Watt, 57, the highest-ranking former government official to be charged in the long-running HUD investigation, was charged in a 25-count indictment with lying about his work as a consultant, for which he was paid more than $500,000 in the mid-1980s. He worked with private clients seeking funds for low-income housing projects in Maryland, New Jersey, Massachusetts, Puerto Rico and the Virgin Islands.

The grand jury also accused Watt of obstructing justice by lying to FBI agents for more than four years, insisting as recently as this month that he kept no records to document his consulting work or his meetings with top HUD officials, including former Secretary Samuel Pierce.

Independent counsel Arlin M. Adams accused Watt, who served as interior secretary from 1981 to 1983, of hindering his investigation into HUD corruption. The probe began nearly five years ago and has cost more than $17 million. Adams said in a statement that Watt ``materially interfered with this office's ability to investigate and prosecute criminal conduct, and has added substantially to the investigation's length and its cost to the American taxpayers.''

Adams said that Watt's cover-up betrayed the public trust, as did his efforts to ensure that scarce HUD funds were awarded ``to the dictates of favored insiders, rather than the needs of the poor.''

In a statement, Watt denied any wrongdoing and questioned Adams' motives. ``On repeated occasions these government lawyers asked me to lie by pleading guilty to things I never did. ... As much as I wanted to avoid this humiliating and costly experience, I would not lie,'' he said. ``With truth as my weapon, I will stand and fight. I am trusting God that justice can arise and will prevail.''

Watt's indictment is the most recent in a string of charges filed against former Reagan administration officials in Adams' investigation. Several top-level HUD officials have pleaded guilty and, last month, Pierce admitted, without being charged, to creating an atmosphere at HUD that allowed corruption to flourish. Pierce's top assistant, Deborah Gore Dean, was convicted on perjury, conspiracy and other charges in 1993 and sentenced last year to 21 months in prison.

by CNB