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Housing Agency Efficiency, Fairness Under Kemp Cited : Reforms: Some programs have been abolished, and grants are allocated on the basis of need and through competitive bids.


WASHINGTON — Although problems remain at the Department of Housing and Urban Development, the agency is far more fair and efficient than during the previous Administration, federal housing officials and outside experts agreed Thursday.

Those closest to operations at HUD credit most reforms over the last two years to the evangelical-style enthusiasm of Jack Kemp, the former Republican congressman whom President Bush named to replace former HUD Secretary Samuel R. Pierce Jr.

Rather than try to dodge or dampen the HUD investigations that swirled around the agency when he took over in January, 1989, Kemp "threw open the doors," said Jack Flynn, an aide.

"He told the congressional investigators: 'Just come in and we'll give you whatever you need. Tell us the files you want and we'll copy them for you,' " Flynn said.

Stuart Weisberg, the chief counsel who helped Rep. Tom Lantos (D-San Mateo) direct a congressional inquiry, agreed, saying: "His strong support and leadership provided a good example of how Congress can work with the Administration to clean up a mess."

Paul Adams, an inspector general at HUD appointed by the Ronald Reagan Administration, had started the ball rolling with a critical report on Pierce's practices in the closing days of his tenure. Congress then pushed the inquiry further.

Meantime, Kemp seemed determined to reform the programs in which abuses were found. If he thought the programs could not be cleaned up, he abolished them.

Officials found that a root cause of the scandal was that HUD had used housing and community development funds in a "discretionary" manner, without competition or firm guidelines.

"This resulted in the funding of projects of dubious value, including swimming pools in beachfront communities," Flynn said.

To eliminate this abuse, Congress worked with Kemp to require that all of HUD's housing and development grants be allocated on the basis of need and through competitive bidding, except where funds are needed quickly because of natural disasters or other emergencies.

In addition, many of HUD's funding decisions under Pierce had been shrouded in secrecy. HUD now requires that all such decisions be announced publicly and that they be published quarterly in the Federal Register.

At Kemp's suggestion, Congress also has required the registration of all consultants, lobbyists and lawyers doing business at HUD, and their clients must disclose what fees they have paid.

In the past, politically connected consultants such as former Interior Secretary James G. Watt, often with no housing experience, had used their influence with Pierce to earn hundreds of thousands of dollars in fees from developers seeking grants.

To strengthen internal investigations, the staff of the inspector general at HUD has been increased, and he has been given new power to subpoena witnesses deemed crucial to his investigations.

In addition, a chief financial officer has been appointed to compensate for HUD's lack of unified financial management and accountability.

The lack of controls under a single officer had led to successful multimillion-dollar embezzlement schemes like that of Maryland housing agent Marilyn Louise Harrell, who was dubbed "Robin HUD" because she gave to poor clients some of the money she admitted stealing from the agency.

The road to reform, however, has not always been smooth. Last May, HUD auditors reported that a Title X program that Kemp had killed will wind up costing the government $177 million in loan defaults, more than three times larger than earlier estimates.

Under Pierce, Title X grants that were allegedly made on the basis of political influence financed expensive projects including marinas and golf courses, although the program was supposed to benefit moderate-income and low-income citizens.

Kemp had come on board too late to recover grants that already had been awarded and were spent unwisely, officials explained.

Barry Zigas, president of the National Low Income Housing Coalition, said Kemp deserves high marks "for having gone to great effort to end the abuses of the past."

"Everybody says things have changed under Kemp," Zigas said. "He wants the agency to base its decisions on merit and not political influence."

At the same time, Kemp's insistence that "mistakes will not be tolerated" sometimes has led cautious bureaucrats to procrastinate, delaying the awarding of grants that should have been made months earlier, Zigas complained.

Maria Foscarinis, who heads the National Law Center on Homelessness and Poverty, commended Kemp for focusing on the problems of low-income Americans.

She noted that the 1990 housing bill approved by Congress last week, containing a two-year appropriation of $57.4 billion, is intended to meet the special needs of low-income people. It includes a Kemp proposal to encourage public housing tenants to buy their units.

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