Schmoke effort to stop HUD probe is rebuffed Budget panel expected to boost funding for study of housing fraud


Mayor Kurt L. Schmoke's latest attempt to sidetrack an investigation of federal housing spending in Baltimore and other cities has been brushed aside by the key figure behind the probe.

Rep. Jerry Lewis, the California Republican who heads the subcommittee that handles the Department of Housing and Urban Development budget, is expected to allocate more money for the multicity investigation.

Lewis' deputy chief of staff could not say yesterday how much money would be involved.

"My sense is that he will continue the program and that there will be money allocated -- new funding," said David M. LesStrang.

Last summer, Lewis' subcommittee gave HUD's chief investigator an extra $9 million for "a comprehensive and in-depth review of selected cities to identify and prosecute fraud affecting HUD programs and funds."

Susan Gaffney, the HUD inspector general, selected Baltimore, San Francisco and New Orleans.

An enraged Schmoke complained that the effort was "tainted by issues of race and politics" because the mayors of all three cities are black Democrats.

Lewis is expected to add the new money when his panel meets next week to finalize the HUD budget for the fiscal year that begins Oct. 1.

Once the subcommittee acts, the budget faces a half-dozen hurdles before it goes to President Clinton for his signature. Changes can be made at each stop along the way.

Schmoke wrote to Lewis on May 29 to demand that the $9 million be rescinded and that new criteria for targeting cities be developed before funds are allocated.

Lewis responded Monday. His letter didn't mention Schmoke's request but said, "A coordinated effort is going forward" involving Gaffney, the FBI and the Justice Department. He added, "Significant progress is being made."

He said Gaffney is working with the FBI and Justice on "further development and review of appropriate criteria" that will be used to "independently designate jurisdictions" to be targeted.

LesStrang said the letter "speaks for itself" and that Lewis would not discuss it with a reporter. An aide to Schmoke said the mayor was in New York and that there would be no comment yesterday on the Lewis letter.

Schmoke has been trying to derail the probe since Gaffney told him in April that Baltimore had been targeted.

The mayor complained of the "biased and indefensible selection of three black Democratic mayors as the sole targets." He also has claimed that Gaffney did not have "a convincing rationale" for the selection and has demanded to see the criteria she used. She has yet to release the criteria.

Schmoke's comments set off a controversy that prompted Gaffney to slow preparations for the probe, say that "the cities haven't been finally selected" and deny that she is a racist.

Lewis said in April that more than three cities will be targeted, and that while Gaffney is choosing the cities, his subcommittee "will be involved in that final decision."

Other sources have said they expect cities with white Republican mayors to be added.

In his letter to Schmoke, Lewis also praised Gaffney, who was appointed by Clinton, for "her commitment to America's poor families and her willingness to begin a serious effort to see that programs designed to provide them with adequate housing are not impacted by fraud within various housing programs."

And, he said, she is the only inspector general "under my committee's jurisdiction that has self-initiated an effort to improve office diversity from top to bottom and she has made significant progress, even at the highest levels, in spite of restrictions" of the federal civil service system.

Pub Date: 6/11/98

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