A year after the first of many revelations about political favoritism, mismanagement and corruption at the Department of Housing and Urban Development, the agency is much-reformed but the legacy of the scandal is still unfolding.
Taxpayers will be paying the bills of the HUD scandals for years, as housing projects that were approved on the basis of consultants' or developers' political connections rather than the merits of the projects fail financially.The General Accounting Office, after the first top-to-bottom audit of the agency in years, found that HUD lost $4.2 billion in 1988, and the agency's independent inspector general estimated that losses could ultimately run as high as $6.9 billion.
Hundreds of cases of potential theft, bribery and corruption are under investigation by local U.S. attorneys around the nation, and a special prosecutor is investigating Samuel Pierce Jr., HUD secretary for eight years during the Reagan administration. Pierce insists he did nothing wrong and was not a "hands-on" administrator, a contention that has been disputed in congressional testimony by several former top aides who say that Pierce approved several grant awards on behalf of his friends and political allies.
The lengthy probe of HUD by the House Government Operations Subcommittee on Employment and Housing, although briefly revived last week for testimony from an ex-Pierce aide, DuBois Gilliam, is largely over, according to Rep. Christopher Shays, R-Conn., a senior member of the panel.
It is now up to Attorney General Dick Thornburgh to take a more aggressive stance against wrongdoing by senior HUD officials than he has so far, the lawmaker said.
"We cannot send the crooks to jail; that's not our job as legislators," Shays said. "It's all on (the attorney general's) shoulders, and he's got to be held accountable." Shays contends that many former top aides to Pierce should be under criminal investigation.
Thornburgh, who initially resisted congressional demands for a special prosecutor probe of Pierce as a politically motivated move by Democrats, has cited the ongoing probes all over the country as proof of his determination to fight corruption. He also has suggested that the famed "Robin HUD" case - in which a Maryland woman was charged with stealing more than $5.6 million from HUD - may not be the "most significant" case that will ultimately emerge from the HUD scandals.
HUD is a very different agency from a year ago, but to some extent it is still waiting for its marching orders and creation of a new agenda for housing the nation's poor.
Members of Congress and housing advocates give much of the credit for reforming HUD to its current secretary, Jack F. Kemp, who pledged to Congress that he would "remove all politics and subjectivity" from the agency and end the "gross mismanagement of the programs and systemic flaws" that marked his predecessor's administration.
Kemp terminated some of the most corruption-prone and wasteful programs of HUD, tightened rules and procedures of others, and set a higher moral tone than HUD had seen in a long time with an official policy of "zero tolerance" for corruption.
The morale among surviving career HUD employees became better than it had been in years, although the ranks of senior career officials were thinned during the Pierce years both for budgetary and ideological reasons, and career workers say the agency is still understaffed.
Late last year, Congress enacted a HUD reform package, largely adopting Kemp's reform proposals. They included requirements that most HUD aid be distributed strictly on the basis of merit through open competition among cities and states; strict compliance with agency regulations, with any rule waivers disclosed publicly; and requirements that consultants and lobbyists trying to influence HUD decisions be registered with the agency and disclose any fees they receive.
This year, legislation is moving through the House and Senate for the first major expansion of housing programs in nearly a decade. Congress, which largely slept through the mushrooming HUD scandals of the Pierce years despite periodic warnings from the agency's inspector general, is taking a more active role now in rebuilding housing programs and ending what many lawmakers feel was an era of neglect for the housing needs of the poor.
The Senate Banking Committee last week approved major new legislation to boost housing aid by $3.1 billion in the new fiscal 1991 budget. But, committee aides point out, even that infusion of new funds represents just a small step at reviving housing programs that suffered huge cuts during the Reagan administration - from $26.7 billion budgeted in 1980 to $6.9 billion in 1988.