Congress Was Warned Of HUD Problems in 1984

CONGRESS, now rushing to investigate allegations of Reagan-era abuses at the Department of Housing and Urban Development (HUD), was told repeatedly in the past decade that lax management left the agency ripe for graft. ``We had too many fires and we just had one fire department,'' Rep. Barney Frank (D) of Massachusetts said in explaining why Congress did little in response to warnings outlined in dozens of reports by the agency's inspector general and the General Accounting Office (GAO), the investigative arm of Congress.

Many of the statements found in the reports now seem prophetic, warning of problems now under congressional scrutiny, including influence-peddling, poorly targeted programs, and millions of dollars in missing funds.

``Project selections had been based upon political consideration rather than merit,'' the GAO's John Luke told Congress in October 1984.

HUD Secretary Jack Kemp last week suspended one of the department's elderly housing programs because 30 percent of the projects had resulted in foreclosures. Many of the projects had low occupancy rates, which an internal audit blamed on HUD for approving large developments despite warnings the area housing market would not support them.

The GAO management study also said HUD had trouble tracking its money because of obsolete accounting.

HUD officials now believe the agency was shortchanged millions of dollars by private contractors it hired to handle property deals and that poor HUD record keeping allowed the lapses.