Word: hud
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Kemp spent much of the rest of the week back among his former colleagues on Capitol Hill, fielding tough questions from two House subcommittees probing the scandal. For the first time, he put a price tag on the loss to taxpayers from the fraud and mismanagement under former HUD Secretary Samuel Pierce: $2 billion. At least half of that appears to have been siphoned from a six-year- old program in which the Federal Housing Administration, an arm of HUD, shares the insurance of housing projects with private companies...
Kemp tried to avoid direct criticism of his predecessor, whom he called a decent and honorable man, but nonetheless noted that HUD is still dealing with more than 1,900 recommendations from the department's inspector general for tightening lax procedures, suggestions that had sat on Pierce's desk without action...
Pierce's fraying reputation suffered a more serious blow last week, when one of his former top aides implicated him directly in the scandal. Though Pierce had told a House subcommittee last May that he had never been personally involved in HUD program grants, Shirley McVay Wiseman told the panel that her boss had directly ordered her to approve $16 million in federal subsidies for a housing project in Durham, N.C., proposed by Pierce's former law partner. She refused, she said, so Pierce signed the papers...
While Kemp treated Pierce gently, he scoffed at the claims of some prominent Republicans that the huge fees they received from developers for their influence in obtaining HUD contracts had not hurt taxpayers. The department, he testified, had given developers "a reason to hire a consultant" and then provided "the money to pay the consultant's fees." Moreover, he said, private brokers who handled house sales for HUD and then failed to turn the money over to the Government were not "Robin Hood-type heroes . . . robbing the rich. They are stealing from the taxpayer and depriving low- and moderate- income...
After releasing a summary of steps he has taken to straighten out HUD, Kemp announced he would not permit his department to deal with 54 former senior officials whom Pierce had exempted from the Ethics in Government Act. The waivers permitted the officials to take private jobs in which they could promptly profit from their HUD experience. One had made $1.3 million in two years as a consultant to developers seeking HUD contracts...