everybody knows Clinton is broke
Yes, everybody knows that, unlike Reagan, Bush, Nixon, Carter, Dole, Kennedy, Johnson, almost the entire Senate and a large part of the Congress, Clinton grew up poor and remains unwealthy. I thought you were upset by Clinton's lying and philandering, not his class background and economic status.
Let's put the Clinton administration's misdeeds in perspective with one of my occasional little reminders of scandals past.
Copyright 1989 The New York Times Company
The New York Times
June 25, 1989, Sunday, Late Edition - Final
SECTION: Section 4; Page 1, Column 1; Week in Review Desk
LENGTH: 1535 words
HEADLINE: HANDS OUT;
How H.U.D. Helped Many Make Money From Poverty
BYLINE: By CLIFFORD D. MAY
DATELINE: WASHINGTON
BODY:
IN the late 1960's, when Watts, Detroit and Newark were exploding in riots, the Johnson Administration created the Department of Housing and Urban
Development to provide poorly housed residents of decaying cities with a Cabinet-level advocate like that enjoyed by farmers, for example, through the Department of
Agriculture.
Now, with various inquiries producing growing evidence of widespread waste, influence peddling, fraud and theft at H.U.D., it seems to some experts that
mismanagement and greed are insufficient explanations for all that went wrong. Over the years, they suggest, the department shunted aside its intended constituents,
the urban poor and near poor, and began to serve the conduit to the poor - mainly developers, lobbyists, consultants, Congressmen, mayors and housing officials.
''What at least created the environment for these scandals is that H.U.D. has been industry-oriented rather than beneficiary-oriented,'' said Peter D. Salins, chairman of
the urban affairs and planning department at Hunter College in New York and the editor of ''Housing America's Poor,'' a critique of Federal housing policy.
''The process by which the Government has attempted to pass a subsidy on to the poor tenant has not been efficient,'' he said. ''There have been too many opportunities
to take slices of that subsidy along the way.''
The abuses that have apparently taken place at H.U.D. were surprising in extent though hardly in kind. Like other government agencies, it has been defrauded before.
But it did seem remarkable when, for example, one Maryland escrow agent, nicknamed ''Robin HUD,'' told investigators that she had stolen $5.5 million in department
money and used it to help the poor.
Influence peddling and political favoritism, the two other main areas of the H.U.D. inquiry, are also not uncommon in Washington. An army of lawyers, lobbyists,
former members of Congress and Presidential appointees derive handsome incomes from trading on their access to the upper echelons of the Government. Still, almost
no one stood up to defend the ethics of former Interior Secretary James G. Watt, who collected more than $400,000 in fees for making phone calls to H.U.D. on behalf
of developers seeking Federal subsidies.
No 'Countervailing Force'
''There has always been and always will be pressure from political and financial interests,'' said Representative Barney Frank, a Massachusetts Democrat and member
of two House subcommittees that oversee H.U.D. ''But normally there is a countervailing force in the people within the department who care about the program.'' Under
President Reagan, Mr. Frank contended, ''most people at H.U.D. had no commitment to the programs, so money and politics won out.''
But some housing experts argue that the very nature of the programs encouraged the abuse and that the integrity of Government programs should not depend on the
involvement of bureaucrats ''who care.'' Alfred A. DelliBovi, the top deputy to Jack F. Kemp, the Secretary of Housing and Urban Development, said in a speech on
Thursday that while ''there is no excusing the cronyism and politics which recent events have disclosed,'' such abuses were not unique to the Reagan Administration.
''The problem is not the party which happens to be running the program,'' Mr. DelliBovi said. ''The problem is the program,'' which, he contended, ''invites wealthy,
politically connected operators to help themselves.''
Re-establishing sound management and controls at H.U.D. is needed to prevent further fraud and waste, Mr. DelliBovi said. But it will be more difficult, he said, to
reduce the power of what he called the ''poverticians.'' He added, ''These are the profiteers who lobby to enact legislation which benefits contractors, greedy developers
and landlords while an increasing number of Americans are homeless.''
Some blame Congress as well for helping to create the conditions that gave rise to the present state of affairs. Stuart Butler, director of domestic policy studies at the
Heritage Foundation, said it was hypocritical for members of Congress to ''gnash their teeth about programs they designed to suit to their own interests.'' The
programs, he said, ''have been doing exactly what they were intended to do: spread billions of dollars among developers and builders.'' Then, he said, the developers
and builders ''give millions back through campaign contributions.''
Some in Congress cast the problem in a different light. Charles E. Schumer, a Brooklyn Democrat and member of a House urban affairs subcommittee, said housing
has become much like the defense industry. ''Very large sums of money are involved in both,'' he said. ''But where there may be only seven defense contractors who
can make a particular weapon, there are thousands of developers who can build houses. And with caps on campaign contributions, there is a lot more potential to get
money from the housing industry.''
While figures are not available on how much the federally subsidized companies and their officers give to politicians, the political action committees of the real-estate
and house-building industries are among the top campaign contributors in the country, according to Common Cause. Secretary Kemp has asserted that
H.U.D.-subsidized developers have provided the bulk of campaign contributions in recent Presidential elections.
''H.U.D. has been practicing trickle-down economics,'' said Peter J. Ferrara, a former H.U.D. special assistant for policy development and research and now a senior
fellow at the libertarian CATO Institute. ''It gives money to rich people and hopes that some of that finds its way down to the poor. But the process gets perverted by
the special interests, the developers, the consultants, the Congressmen and even the mayors.''
Paradoxically, one reason that some Republican consultants like James Watt and Robert Weinberger, nephew of former Defense Secretary Caspar W. Weinberger,
commanded exceptionally high fees may have been that Reagan Administration budget cuts decreased the number of available subsidies. Professor Salins said that
when there were a lot of H.U.D. projects, as in the Carter years, developers were able to obtain them without extraordinary efforts. But as subsidies dwindled,
competition among developers increased sharply and politically connected hired guns began to be called in.
Are things about to change? Mr. Kemp, who has been praised for exposing abuses in the agency he took over, promised last week to ''clean up and clean out'' the
department and to revitalize urban America. But it was not clear whether his restoration of the department will consist mostly of fresh paint or whether he will try to
rebuild the institution from the foundation up -and whether Congress will go along with such an effort.
THE DEPARTMENT AND THE ACCUSATIONS
With 80 field offices, 13,000 employees and a $20 billion budget, the Department of Housing and Urban Development has a broad mandate to see to the nation's
housing needs. Its duties include everything from subsidizing multimillion-dollar projects to riding herd on companies that sell land through the mails. Though there have
been accusations in Congress that mismanagement and waste are pervasive at H.U.D., the known or suspected instances of influence-peddling, fraud and favoritism
appear to be concentrated in programs involving property sales and the renovation of moderate-income housing. Those programs and the problems fall into these areas:
Housing subsidies
Developers who rehabilitate or construct housing for the elderly, the handicapped or for low- and moderate-income families under one H.U.D. program are eligible for
mortgage guarantees, grants, loans, tax credits, rent subsidies and other help. In some cases developers paid hundreds of thousands of dollars to former Government
officials who phoned H.U.D. administrators - often Deborah Gore Dean, executive assistant to Housing Secretary Samuel R. Pierce Jr. - that resulted in the approval of
subsidies for the developers. Among those who profited were many prominent Republicans, including former Interior Secretary James G. Watt.
Property sales
Through the Federal Housing Administration and other programs, H.U.D. guarantees the mortgage loans of hundreds of thousands of homebuyers. When buyers
default, H.U.D. pays off the lender and takes possession of the house. An independent escrow agent then oversees the sale of the house and turns the proceeds, minus
a small commission, over to H.U.D. Authorities are investigating at least a dozen cases in which escrow agents may have embezzled millions of dollars from such sales.
Among the cases are the disappearance of $5.5 million in Baltimore, $3 million in Washington, $2.5 million in Fort Worth and $1 million in Denver.
Discretionary funds
At his discretion, the Housing Secretary may approve projects and finance them from two funds totaling $50 million. Political favoritism played a role in many grants
and other aid in this category. Projects favored by Senator Alfonse M. D'Amato of New York have accounted for most of discretionary fund spending overseen by the
regional H.U.D. office. |
