Schmoke revives dispute over HUD probe He asks Congress to cancel $9 million for investigation


Reviving the controversy over probes of federal housing spending in Baltimore and two other cities, Mayor Kurt L. Schmoke demanded yesterday that Congress rescind the $9 million it had appropriated for the investigations.

"The only just and reasonable resolution to this situation is a withdrawal of the funds from the inspector general's office and a fundamental redesign of the initiative," Schmoke said in a sharply worded letter to Rep. Jerry Lewis, the California Republican who played the key role in initiating the probes.

Lewis heads the House subcommittee that approves the Department of Housing and Urban Development budget. In July, the panel added $9 million to the budget so the agency's inspector general could "conduct an in-depth review of selected cities to identify and prosecute fraud affecting HUD programs and funds."

The probe will involve all HUD spending, not just money that flows through city government. Schmoke's housing agencies spend about $350 million a year, most of which is HUD money.

Early this year, HUD Inspector General Susan Gaffney said Baltimore, New Orleans and San Francisco were targeted, office space had been acquired for the investigators, and she expected that "the teams will be up and running by early this summer."

She has not detailed the reasons for selecting these cities and yesterday refused to comment.

Gaffney came to City Hall in early April to inform Schmoke of the probe. He says she told him 20 to 30 investigators would work in Baltimore for five years. In addition to Gaffney staffers, each of her urban fraud investigative teams is expected to include FBI agents.

A day after that meeting, Schmoke charged that the selection of Baltimore, New Orleans and San Francisco "was tainted by issues of race and politics" because each city is headed by a black Democratic mayor. Gaffney has denied being a racist.

Schmoke said he demanded to see in writing the criteria used to select the cities, but says he has not.

Soon after the mayor's statement, the National Conference of Black Mayors, the U.S. Conference of Mayors and Mayor Marc Morial of New Orleans also condemned the investigations.

On April 29, Schmoke went to Washington to tell Lewis of his concerns. Later, he called the session "very constructive" but refused to discuss it further.

Despite a promise by Lewis to get back to him, Schmoke told reporters yesterday, he has not heard from the lawmaker. He said his May 29 letter, released yesterday, was prompted by Lewis' silence and a Los Angeles Times article that, Schmoke said, "suggested again that there might be a desire just to minimize this criticism rather than to go back and do what I think is appropriate."

The Times article speculated that Los Angeles, which has a white Republican mayor, may be added to the list of cities to be investigated.

Several Washington sources have said they expect cities with white mayors to be added to the list. Gaffney and Lewis said in April that the final selection had not been made, and Lewis added that more than three cities would be investigated.

He told The Sun that his subcommittee "will be involved in that final decision" even though "the inspector general has to be independent of every whim that we might have."

Schmoke said the addition of Los Angeles would not satisfy him "at this stage."

He added that he's concerned that the addition of Los Angeles would also be a political move to balance the earlier selections. "And I don't think that's the way that the inspector general's office ought to operate."

Deep involvement of Congress in targeting cities would be inappropriate if not illegal, he claimed.

Lewis' office did not respond to three telephone messages seeking comment.

"The whole situation now is so muddy that it would benefit everybody to get a fresh start," Schmoke told reporters.

Pub Date: 6/05/98

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