Former HUD aide Dean convicted of fraud, lying Found guilty of 12 felony counts

October 27, 1993|By Susan Baer | Susan Baer,Washington Bureau

WASHINGTON -- In the government's biggest success of its four-year investigation of corruption in the Reagan administration's housing department, former housing aide Deborah Gore Dean was found guilty yesterday of defrauding the government, accepting an illegal payment and lying to Congress.

Dean, 38, a member of one of Maryland's most prominent Republican families and a second cousin to Vice President Al Gore, was a central figure in the scandal of abuse and mismanagement at the Department of Housing and Urban Development that came to symbolize high-power wheeling and dealing under President Reagan.

After deliberating three days, a jury in U.S. District Court convicted Dean, former executive assistant to then-Housing Secretary Samuel R. Pierce Jr., of all 12 felony counts with which she was charged.

Facing a maximum sentence of up to 57 years in prison and $3 million in fines, Dean, who was chatty and upbeat during much of the six-week trial, said she was too stunned by the verdict even to cry.

"It is so beyond the scope of anything anyone expected," said Dean, whose aunt, Louise Gore, is a former Maryland legislator who ran for governor against Marvin Mandel in 1974. "I didn't even cry when I told my mother and my husband. I said, 'You're not going to believe this.' They both accused me of joking around."

The government showed that Dean conspired to steer millions of dollars' worth of federal housing contracts to favored developers -- including former Attorney General John N. Mitchell, who lived with Dean's mother in the final years of his life and made $230,000 by repre

senting developers who sought HUD funds.

She also was found guilty of accepting an illegal payment of $4,000 from a Republican consultant, Louis Kitchin, and lying about her role in HUD programs before the Senate Banking Committee in 1987 after being nominated as assistant secretary for community planning and development.

Sentencing was set for Jan. 19 by U.S. District Judge Thomas Hogan.

The office of independent counsel Arlin M. Adams, which has secured 10 other convictions in the HUD probe, said Dean misused her position and "the public trust" by awarding HUD contracts to well-connected Republican consultants to enrich her friends and family.

For her part, Dean, who was on the witness stand for six days, testified that the awarding of funds at HUD was, indeed, highly political, but that she did nothing illegal and has been made a scapegoat in a government mess that resulted in $2 billion in losses.

She said that she ran political interference for her boss, Mr. Pierce, but that he ultimately made funding decisions. And she said she accepted the $4,000 check from Mr. Kitchin

to decorate an apartment for him.

So far, Mr. Pierce has not been indicted by the office of independent counsel, but he is still under investigation. While other former HUD officials who've been convicted are now cooperating with the government while awaiting sentences, prosecutors said there had been no such discussions with Dean to date.

Prosecutor Paula Sweeney said yesterday's conviction was "obviously very significant" to the government's investigation of HUD. "She was really a central figure," said Ms. Sweeney.

Dean, who now runs an antiques store in Washington, said yesterday that she still believed she did the

right thing by not pleading guilty as other HUD officials have done. "I thought I did the right thing by taking them on. You live with the decisions you make."

Her lawyer, Stephen Wehner, said he planned to file an appeal. "The battle isn't over," he said.

Two more trials against HUD officials are pending: Joseph Strauss, former special assistant to Mr. Pierce, has been indicted on charges of conspiracy and perjury. J. Michael Queenan, a former HUD aide in the Denver regional office, is charged in North Dakota with bribery, conspiracy, and aiding and abetting money laundering.

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