9 any rights, and that the statement would not be distributed at the hearing or made part of the hearing record unless he testified. At the June 29 hearing, Mr. Cushing, through his attorney, asked for additional time to prepare for and review all of the materials before Mr. Cushing testified. Chairman Lantos granted that request for an extension of time. Cushing appeared before the subcommittee again at a hearing on July 17, 1989 and asserted his Fifth Amendment rights in response to questions concerning activities at HUD. Mr. In the statement prepared by Mr. Cushing for the June 29 hearing, which again was neither given by Mr. Cushing nor submitted for the record, Mr. Cushing wrote the following with respect to funding of mod rehab units: (Attachment 47 at page 3) Similarly, unlike other funding actions, requests for Rapid Replies were not generated by my office. Rapid Replies appeared in my in-box, having been prepared by the Office of the Deputy Assistant Secretary for Policy, Financial Managment and Administration upon direct orders from the Assistant Secretary. (I can only recall one instance where I made a request for a Rapid Reply, and that was only after the Secretary personally authorized it in writing). (emphasis added) At the subcommittee hearings on April 30, May 2, and May 4, 1990, former HUD official DuBois Gilliam testified under oath that Secretary Pierce was directly and intimately involved in decisions to award HUD grants to personal friends and the politically wellconnected. Gilliam candidly testified: ". The Department of Housing and Urban Development was the best domestic political machine I've seen we dealt strictly in politics. (4/30/90 Tr. 72). run Some of the letters sent to Secretary Pierce seeking assistance on HUD-related matters suggest that HUD was politically. (See e.g. letters from Luis Ferre, Attachment 17; and letter from Bill Taylor, Attachment 18). Gilliam recounted in specific detail numerous instances in which Secretary Pierce directed him to fund particular UDAGS, Special Projects, and Technical Assistance applications: Mr. LANTOS. Did Secretary Pierce tell you to fund a project for Mr. Singletary or did he just tell you to give it careful consideration? Mr. GILLIAM. He told me to fund the project for Mr. Sam Mr. LANTOS. The reason I am dwelling on this item is because it is a very important item. Secretary Pierce repeatedly 10 testified under oath before the subcommittee that he passed on these requests to members of his staff with the comment that they should give it careful consideration. Your testimony under oath is that you were not told to just give careful consideration, but to fund it; is that correct? Mr. GILLIAM. That is correct, Mr. Chairman. Mr. SCHUMER. Okay. Here's another quote. This one's in Time Magazine. He [Secretary Pierce] said, "My general operating procedure was to send each request to the appropriate staff at HUD with instructions to consider it carefully, and if the request met the necessary requirements, grant it, if not, deny it." That's not what you find, right? Mr. GILLIAM. That's not the way I operated, no. Mr. SCHUMER. Is that the way Secretary Pierce operated? Mr. SCHUMER. Did you see him operate the way he operated with you with other people? Mr. SCHUMER. You heard him say to her, fund it. Mr. GILLIAM. To get that project out. Mr. SCHUMER. To get that project out. (4/30/90 Tr. 127-128) Mr. Gilliam testified that when the office of Congressman Henry Gonzales, Chairman of the Housing Subcommittee and someone Secretary Pierce strongly disliked, contacted HUD in support of a UDAG application in the Congressman's district, the Secretary's response was not to tell him that it would be given careful consideration, but rather, according to Mr. Gilliam, Secretary Pierce said, "Does Gonzales want the project? I said yes, Mr. Secretary. The Secretary's response was, well, Gonzales don't got We have reason to believe that the testimony of Deborah Dean would be consistent with Mr. Gilliam's concerning Secretary Pierce's direct and intimate involvement in these programs. Further, with respect to the Section 8 Moderate Rehabilitation Program, we believe that Ms. Dean's testimony would show that in numerous instances Secretary Pierce approved and directed that mod rehab units be given to projects advocated by certain individuals. 2. I do not have a recollection of that [January 13, 19871 meeting Congressman Morrison questioned Secretary Pierce about a meeting that Pierce had with Assistant Secretary for Housing Thomas Demery, with Deborah Dean present, on January 13, 1987: Mr. MORRISON. Mr. Demery testified before the Housing Subcommittee that he objected to this process of being directed to sign, and he insisted that he have a meeting that included you. And he says such a meeting took place on January 13, 1987, and that you and Ms. Dean and he were together, and you discussed both specific projects and how this program was to operate. Do you have recollection of that meeting? Mr. PIERCE. I do not have a recollection of that meeting, no; and certainly not a recollection of the meeting whereby he said to me that she was throwing her weight arou and making him do things like sign for projects that she approved. (emphasis added) Mr. MORRISON. Mr. Mr. Do you deny that such a meeting took place? PIERCE. I don't know. There may have been a meeting. But not what was said went on. That's what I'm saying. There could have been a meeting. MORRISON. But at this time, you have no recollection of that meeting? Mr. MORRISON. In other words, Mr. Demery has said that you met with him along with Ms. Dean. Mr. PIERCE. Yes. Mr. MORRISON. And that at that meeting, you approved projects 12 in the course of a regular round of projects, not an emergency. Mr. PIERCE. No. Mr. MORRISON. I didn't approve a round of projects in a What Mr. Demery testified is that you explained how the system would work, which you said that it was discretionary with you, it was a discretionary system; and secondly, that you approved a list of projects to be approved at that time in that round, Janaury, 1987. That's the other thing that he said happened at the meeting. Mr. PIERCE. I don't recall approving a list of projects. (I Tr. 266) As the perjury prosecution of former White House aide Michael Deaver makes clear, the fact that a witness in response to a question says "I don't remember" or "I have no recollection of such a meeting" may nevertheless, in certain circumstances, constitute perjury. The January 13, 1987 meeting that Assistant Secretary for Housing Thomas Demery had with Secretary Pierce, in the Secretary's office, with Deborah Dean present, was a critical and pivotal meeting. The topic of discussion at this meeting was whose mod rehab program was it. In other words, did the decision-making power and control over millions of dollars of discretionary mod rehab funds rest with the Secretary or with the Assistant Secretary for Housing? It was at this meeting on January 13, 1987 that Secretary Pierce told Demery that he wanted to know who was behind each Section 8 Moderate Rehabilitation project! It was at this January 13 meeting that Mr. Demery asked Secretary Pierce how he would know if there were a project in which the Secretary had an interest, and Secretary Pierce replied that he would speak through Ms. Dean. At a subcommittee hearing on May 23, 1990, Thomas Demery testified in detail about his January 13, 1987 meeting with Secretary Pierce: During the first two months as Assistant Secretary for Housing, documentation for mod rehab funding decisions consisted of scraps of paper listing various PHAS which Ms. Dean would hand me and tell me, "The Secretary wants these requests funded," . . Whenever I challenged her directives, Ms. Dean would question my loyalty to the Secretary. Finally, after only three months on the job, on 13 January 12, 1987, I insisted on a face-to-face meeting with Secretary Pierce to discuss mod rehab program authority. The meeting was set for January 13, 1987. The agenda included: how the mod rehab program was supposed to run and who, either Demery or Dean, was to direct my deputy, Hunter Cushing. At that meeting, when reviewing specific mod rehab program funding recommendations, Secretary Pierce wanted to know "who was behind" each mod rehab request. At that time, I realized that political considerations were to be a factor in the award of mod rehab units as viewed by Secretary Pierce. (5/23/90 Tr. 9-10) His responses concerning the question of my program authority centered on the following: One, the mod rehab program was his to run as he wanted; Two, program authority had not been delegated to me as Assistant Secretary for Housing; three, a selection committee comprised of the Under Secretary, which at that time was vacant, so the General Counsel, Mike Dorsey, would serve as a substitute for the vacant Under Secretary position; the Assistant Secretary for Housing Secretary Pierce's Executive Assistant, Deborah Dean, would meet to review future mod rehab requests; four, Secretary Pierce would speak through Ms. Dean to this committee; and, five, he wanted me to try and work it out with Cushing. -- me - and Those were my instructions from Secretary Pierce. These instructions were reiterated in a January 13, 1987 memo from Deborah Dean to Secretary Pierce which stated, "You have all the power authorized to the Department, and even when you delegate authority you still have concurrent authority with the assistant secretaries. In other words, it is so much yours, you can't even give it away. OGC [the Office of General Counsel] can find no document that says you have ever delegated authority over mod rehab to anyone. You have sole responsibility for that program." (5/23/90/ Tr. 11-12) Thus, it was Secretary Pierce who controlled the mod rehab program and wanted to know "who was behind" each mod rehab request: Mr. LANTOS. It is my understanding, Mr. Demery, that at the beginning of this meeting Mr. Pierce wanted to know who was the developer or the person behind each mod rehab project. Is that correct? |