HUD probe defended by congressman Lewis reaffirms determination to investigate cities; Agency rebuts criticism


The congressman who holds their purse strings accused federal housing officials yesterday of trying to derail a major fraud probe that temporarily targeted Baltimore and of attempting to discredit the chief investigator.

"Such efforts only intensify my resolve to see it succeed," said Rep. Jerry Lewis, the California Republican who is the prime mover behind the probe.

A Department of Housing and Urban Development official rejected the charges, claiming that Lewis was undermining HUD's inspector general, Susan Gaffney, by impinging on her independence.

Lewis issued his strongly worded statement after an FBI official said that the three cities initially targeted -- Baltimore, New Orleans and San Francisco -- are no longer scheduled for investigation, at least for the time being.

He noted that his subcommittee last week "voiced its unanimous and bipartisan approval to spending an additional $9 million next year to investigate fraud in housing programs across the United States."

The Lewis panel, which handles the HUD budget, last year provided the first $9 million for Gaffney to conduct probes in "selected cities" that it didn't name.

The inspector general's office advertised for investigators to lead criminal probes in each city. Gaffney said her office wants to look at all HUD spending.

After targeting Baltimore, New Orleans and San Francisco, Gaffney ran into a hail of criticism from Mayor Kurt L. Schmoke xTC and others. Schmoke suggested that racism and politics were factors in the choices because the cities have black Democratic mayors and housing chiefs.

Gaffney then backpedaled, saying that her selections were not final. Lewis said the criteria would be revised before the final choices and that more than three cities might be probed.

Last Friday, John E. Collingwood, the FBI official, wrote Lewis that "no city is considered to be selected" now -- the first time anyone has said publicly that the three cities are off the list. He left open the possibility that they could still be chosen.

Lewis said that "some within HUD seek to undermine and sully" Gaffney's "fine reputation" and "will go to great lengths to discourage or derail" the probe.

He did not offer specifics. But on Monday, HUD Secretary Andrew M. Cuomo had suggested that Gaffney's initial choice of the three cities smacked of being "racially motivated or politically motivated hits."

Also, on Monday, Lewis charged that a New York Times article that said he had agreed that "the initial selections should be set aside" had been planted by Cuomo or his aides and that it was "just plain wrong." A Cuomo aide denied the charge.

Yesterday, Karen Hinton, Cuomo's spokeswoman, said, "If anyone is undermining the reputation of the inspector general, it's chairman Lewis, by stating on several occasions that the subcommittee would be involved in the final selection" of targets for the probes.

Yesterday, Lewis said, "Neither Congress nor HUD will determine the jurisdictions that will be ultimately examined."

Pub Date: 6/24/98

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