TIME: Almanac 1993/TIME Almanac 1993.iso/time/072489/07248900.009

Text File | 1992-09-23 | 5.7 KB | 111 lines

                㐠                                                           PRESS, Page 48

Where Were the Media on HUD?


Washington journalists missed the scandal when it was breaking

By Michael Riley


    Big bucks. Heaps of hypocrisy. Influence peddling by
prominent Republicans. The unfolding scandal at the Department
of Housing and Urban Development is the kind of story that
guarantees front-page play. It is also the kind of story that
could guarantee brilliant future careers, perhaps even Pulitzer
Prizes, for enterprising journalists. So reporters have pounced
on Washington's latest example of sleaze. There is just one
hitch: it's yesterday's news. All that murky bureaucratic back
scratching and buck passing happened during the heyday of the
Reagan Administration. Where was the ever vigilant press back
then?

    The short answer: sleeping. Almost 5,000 reporters prowl
the nation's capital, and during the Reagan era, many
Washington insiders knew what any inquisitive reporter should
have known: HUD, with its million-dollar contracts, was a
feeding trough. "Everybody who talked about HUD knew there was
money to be made," says Republican political consultant David
Keene. Despite recurring gossip about payoffs and even some hard
evidence, the nation's best TV news organizations, newspapers
and newsmagazines -- including TIME -- failed to report the
corruption at HUD until last spring, when an internal
investigation jump-started the story. The entire episode says
a great deal about shortcomings in the way the press covers
Government. "Somebody, an editor or a reporter, should have
said, `Where is the money going?' " says Bob Woodward,
assistant managing editor of the Washington Post.

    At least one reporter picked up the scent early on. In
December 1986 Joan Jacobson, a housing reporter for the
Baltimore Evening Sun, received a tip: Rhode Island developer
Judith Siegel was throwing James Watt's name around HUD offices
in Baltimore in connection with a low-income-housing
rehabilitation project that Siegel wanted to develop in Essex,
Md. Like any good reporter, Jacobson started asking questions.
Why would the former Interior Secretary, now a Wyoming-based
businessman and a professed enemy of Big Government, be involved
in such a project? Jacobson started combing every public file
on the 312-unit Kingsley Park development but could not turn up
any references to Watt. Jacobson says Siegel flatly denied that
Watt was involved. Since Jacobson could not confirm the story,
she shelved it.

    As it turned out, Jacobson's source was right. Watt had
received a $300,000 consulting fee from Siegel for making eight
telephone calls and holding a 30-minute meeting with HUD
Secretary Samuel Pierce to ease the way for the project. Siegel
claims she does not recall talking with Jacobson in 1987. "You
think I'm going to risk five, six or seven hundred thousand
dollars talking to somebody on the Baltimore (Evening) Sun?"
asks the developer today. Local housing officials, curious about
Watt's involvement, were cheering Jacobson along. "I wanted her
to find the facts," says Maryland community-development
administration director Trudy McFall. "But they just weren't
there." Laments Jacobson: "I feel bad that I couldn't prove the
story."

    The Washington-based national press missed the warning
signs altogether. In July 1988 Multi-Housing News, a trade
publication, ran an extensive story on influence peddling in
HUD's Moderate Rehabilitation program, spelling out, with almost
every detail except the malefactors' names, the $2 billion
scandal that has since emerged. Reports from HUD's own inspector
general sounded similar tocsins. But none of Washington's
investigative journalists seemed to be listening. Part of the
reason was that news organizations had tired of HUD after
reporting the massive Reagan budget cutbacks at the agency in
the early 1980s; once most of the money was gone, so were the
reporters. Only a few regularly covered the huge bureaucracy.

    While sources went uncultivated and leaks dried up, the
capital's best reporters were caught by other stories, like
allegations against former Attorney General Ed Meese and the
Iran-contra scandal. HUD remained the gulag of Washington
journalism, a backwater with an obscure chief administrator
they dubbed "Silent Sam" Pierce. There was a distinct lack of
glitz and glamour about the HUD beat. "We were looking
elsewhere," explains syndicated columnist Jack Anderson. "We
don't have enough eyes to look at HUD. The very name HUD says
dullness, dullness, dullness."

    To complete the circle of neglect, Congress failed to
monitor the enormous agency closely. For one thing, since
hearings drew scant coverage, members of Congress sought public
attention elsewhere. For another, the lawful political benefits
of the pork barrel may have tempered criticism of HUD. Former
Senator William Proxmire, who was chairman of the HUD
subcommittee of the Senate Appropriations Committee, applauds
the current congressional probe of the agency. Says he: "That's
what we should have been doing. We didn't."

    Even the most blatant instances of influence peddling went
virtually unnoticed. Paul Manafort, later a leading campaign
adviser to President Bush, used his connections at HUD to
ensure funding for an unwanted $43 million rehabilitation of
dilapidated housing in Seabrook, N.J. Not only was he a partner
in the development firm involved on the project, but he also
received $326,000 in fees for his trouble. The matter went
unreported for three years. Are there any lessons to be learned
from the HUD fiasco? Offered one Washington reporter: "Just
because something's silent, that doesn't mean it's asleep."