Ex-Aide Says Pierce Had Direct Hand in Allocating Subsidies

An imprisoned former aide to Samuel R. Pierce Jr. today contradicted the former housing secretary’s assertions that he did not make decisions or take a direct hand in deciding who got federal housing subsidies.

Dubois L. 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 investigating the HUD scandals and was testifying under a grant of immunity from further prosecution.

Rep. Tom Lantos (D-San Mateo), chairman of the investigating subcommittee, called Gilliam “the key missing piece in the jigsaw puzzle” of the HUD scandal during the Ronald 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 David Sowell as “in some ways the single most sickening aspect” of the HUD scandals.

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 prison sentence stems from a May, 1989, plea agreement in a case in which he was charged with steering bond and construction work for a Biloxi, Miss., project to associates and relatives who later shared the proceeds with him.

The charges involved activities while he was directing a Community Development Block Grant technical assistance program between 1984 and 1987.