New questions face nominee for labor post Her role in development is probed by Senate panel


WASHINGTON -- In a new set of questions about the nomination of Alexis M. Herman as secretary of labor, a Senate committee is examining why she received an ownership interest now worth as much as $500,000 in a real-estate development here without investing any money, government officials said yesterday.

Herman was given an interest in the $200 million project on Pennsylvania Avenue in the mid-1980s, when she ran a consulting business that worked to ensure minority participation in that project and other such ventures.

People involved in the deal said Herman, who is now a White House aide, was one of three minority business owners who received small interests in the project in what they described as a fairly typical effort to meet federal affirmative-action goals.

Herman was not a government official then, and it was legal for her to accept part ownership in the project. But Senate Republicans are looking broadly at whether Herman, a longtime Democratic Party activist, ever blended her political activities with either her business dealings or her role at the White House, where she has directed the Office of Public Liaison since 1993.

Questions about the real-estate deal have added to the troubles facing Herman's nomination, which has become caught in the furor over fund-raising practices in President Clinton's re-election campaign.

Special counsel Lanny J. Davis and other White House officials insist that Herman, a political appointee at the Labor Department in President Jimmy Carter's administration and chief of staff of the Democratic National Committee from 1989 to 1991, has done nothing improper in her business dealings or her work at the White House. White House officials said they still expect her to win confirmation to succeed Robert B. Reich as labor secretary.

The Senate Labor Committee has held off scheduling hearings on the nomination, however. The Office of Special Counsel, an independent federal agency, is also examining whether Herman or her White House assistants engaged in improper political activities in helping the Democratic Party reach out to ethnic voters last year.

White House officials said the Senate committee recently asked for information about Herman's involvement in the Pennsylvania Avenue redevelopment project, a huge office, retail and residential complex known as Market Square.

The main developer, Herbert S. Miller, had close ties to Washington Mayor Marion S. Barry Jr., and one of the minority partners ran a public relations company that employed Effi Barry, then the mayor's wife.

One question on Capitol Hill is whether Herman was included in the project to take advantage of any ties she had to local or federal Democratic officials.

Herman has declined to grant interviews while her nomination is pending. But White House spokesman Joseph Lockhart said she did no lobbying on the Market Square project. Henry A. Berliner

Jr., an appointee of President Ronald Reagan who chaired a federal corporation that oversaw the choice of the developer, also said she played no role in that decision.

Inviting members of minority groups to join such projects at little or no cost to meet affirmative-action goals "was pretty common in any program at that time that involved the federal government," Berliner said. Lockhart said Herman got involved in the Market Square project in 1984 through a friend, Robert Mendelsohn, who was working with Miller.

Mendelsohn helped Herman's consulting firm, A. M. Herman & Associates, win a $205,000 contract to oversee the hiring of minority workers and contractors at Market Square, Lockhart said.

Pub Date: 2/15/97

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