Pierce May Be Implicated in Scandal

WASHINGTON--A former top official from the Department of Housing and Urban Development (HUD) is seeking immunity from prosecution in exchange for testimony implicating former HUD Secretary Samuel Pierce in the scandal over influence peddling at the housing agency, sources said yesterday.

These sources, who asked not to be identified by name, said Deborah Gore Dean has informed congressional investigators she can testify that Pierce personally ordered funding for specific projects under the Section 8 Moderate Rehabilitation program. The program was briefly suspended after HUD auditors criticized the selection process and said a number of prominent Republicans had donated millions of dollars to their clients.

The source said Dean was demanding immunity from prosecution in exchange for answering questions from the House subcommittee investigating abuses at HUD during Pierce's eight-year tenure as secretary.

Dean earlier refused to testify, citing her Fifth Amendment rights against self-incrimination. She spent three years as Pierce's executive assistant, and has been described by former colleagues as wielding great influence at the agency.

Pierce told the subcommittee last month he had no direct role in funding decisions in the Section 8 or any other program. Since then, however, the Wall Street Journal has reported that Pierce intervened on behalf of several associates, including a former law partner. Subcommittee members have told Pierce, who has moved back to Manhattan to resume his law and business dealings, that they want to question him again.

Word on the negotiations between congressional investigators and Dean came as HUD officials more than doubled--to $1.1 billion--their estimate of the losses in one program suspended because of scandals plaguing the agency.

The Senate Banking Committee also voted to launch its own investigation into HUD operations during the Reagan Administration, joining two House panels already scrutinizing allegations of mismanagement, fraud and influence-peddling at the multibillion-dollar agency.