Chief investigator for HUD alleges 'attacks and dirty tricks' by Cuomo Gaffney charges that secretary is attempting to force her resignation


WASHINGTON -- Taking the gloves off in an increasingly hostile confrontation, the chief investigator for the U.S. Department of Housing and Urban Development accused its secretary, Andrew M. Cuomo, of "a series of attacks and dirty tricks" designed to force her resignation.

Susan Gaffney, the inspector general, spoke at a Senate committee hearing yesterday, where she pleaded for help from Congress in fending off Cuomo's attempts to curb her independence, undermine her office's work and to begin conducting criminal investigations, a responsibility she now has.

Appearing before the Senate Governmental Affairs Committee, she also charged that a Cuomo aide had sought "amnesty" from the Justice Department for the targets of a six-year investigation by her office into the spending of "millions and millions" of dollars in HUD funds.

Sens. Fred Thompson of Tennessee and Susan M. Collins of Maine, the two Republicans who attended the hearing, called Gaffney's charges "troubling," while the lone Democrat there, Sen. John Glenn of Ohio, said they were "very important" allegations that Congress had to deal with.

"This is the most troubled department in the government," Thompson told Gaffney. "It's got a history of waste, fraud and abuse. The idea that you would not get cooperation and would actually be harassed and intimidated, you know, is beyond the pale. I did not realize until today the full extent of it."

Promising that Congress would "be engaged," Thompson told her, "the next time this happens, give me a call."

A Cuomo aide promised to fax a response, but that plan was later dropped, according to a senior official. No one would comment publicly last night on Gaffney's charges.

At one point yesterday, Gaffney expressed wonderment that she still had her job. "Why haven't I been fired?" she asked.

"There would be public outrage," responded Collins, promising a congressional investigation "if you were fired for trying to do your job."

Gaffney traced what she called Cuomo's "hostility to the concept of an independent inspector general" to a critical 1995 audit by Gaffney's office of a program he was running as an assistant secretary.

The confrontation escalated this year after Gaffney, prompted by House Republicans, planned a major investigation of the spending of federal housing funds in several cities. She said that after "an elaborate screening process," Baltimore, New Orleans and San Francisco became the "top candidates."

Subsequently, Mayor Kurt L. Schmoke and others claimed that that her selection of the target cities was racially biased because each is headed by an African-American mayor.

Gaffney vehemently denied she is racist but put the probes on hold.

She suggested yesterday that Cuomo set her up for charges of racism, saying that before the probes became public knowledge, she had discussed with Cuomo the fact that the mayors of the three cities are black and that this created a potential "perception problem."

"The secretary said he wouldn't expect any problems with Baltimore and New Orleans," Gaffney told the committee, "But San Francisco could be a problem, he said, because everything in San Francisco is perceived in racial terms." After she said she "needed" to investigate the San Francisco Housing Authority, Cuomo told her, "Well, you'll just have to go forward."

Schmoke and New Orleans Mayor Marc Morial became two of the most vociferous critics of the selection, charging that racism was at work. Subsequently, the U.S. Conference of Mayors and the National Conference of Black Mayors adopted resolutions criticizing the probes.

And, several months later, Gaffney noted, Cuomo was quoted as criticizing the selections as "either illegal or unethical" and saying, "It's not a situation that can or should be tolerated."

Recently, said Gaffney, "the tempo of those attacks and dirty tricks seems to be escalating and the focus seems to be increasingly that I am racist."

Gaffney said she decided to go public after a Cuomo aide hired outside lawyers for $100,000 to investigate charges of employment discrimination against her by one of Gaffney's senior subordinates and other employees. The action short-circuited normal administrative channels and placed the probe in the hands of the Cuomo aide.

Recalling that she told Cuomo last week that the move "was wrong," she said, "I reminded him that I had previously told him that if he started the 'dirty tricks' again, I would fight. I said that I now intended to fight."

The following day, Gaffney said, she got an offer from HUD general counsel to settle the discrimination complaint in return for her resignation.

In perhaps her most serious charge, Gaffney claimed that Cuomo "tried to undermine a major investigation" that involves millions of dollars. A key Cuomo aide, she said, asked the Justice Department to grant amnesty for targets of the probe, a request that was made after a former lawyer for a target sought Cuomo's assistance.

Gaffney would not be specific about the probe but others said it involves A. Bruce Rozet, a Los Angeles millionaire and major Democratic party contributor, who has received millions in HUD funds to provide housing for the poor.

HUD has sued Rozet, accusing him of a kickback scheme to inflate federal subsidies for his apartment projects and seeking $7.5 million in damages and another $20 million in penalties.

Pub Date: 9/10/98

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