The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Wednesday, three pro democracy rioters were publicly executed in China, Secretary of State Baker said the United States deeply regrets the action but would not impose new sanctions. And the U.S. Supreme Court said the first amendment protected the right to destroy or desecrate the American flag. We'll have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary, our major focus tonight is the widening trail of mismanagement and fraud at the Reagan Department of Housing and Urban Development. We start with a background report, hear from two Congressmen leading the investigation, Tom Lantos of California and Christopher Shays of Connecticut, and have a News Maker interview with the new HUD Secretary, Jack Kemp. Next, Charlayne Hunter-Gault's Wednesday interview on solutions to the drug problem, tonight two women in concerned with public housing in Atlanta, Louise Watley and Jane Fortson. Finally, essayist Roger Rosenblatt has some thoughts on the problems of democracy. NEWS SUMMARY

MR. MacNeil: In China, three pro democracy demonstrators were publicly executed today, despite appeals for clemency from the United States and other countries. The executions came as more death sentences were handed down. We have a report from Beijing by David Rose of Independent Television News.

DAVID ROSE, ITN: The announcement on Chinese television's main bulletin was brief and to the point. This afternoon, the Middle People's Court of Shanghai announced the execution of the three rioters after rejecting their appeals. The three were taken to the place of execution and shot. The Chinese characters on the screen say the three Shanghai rioters have been executed. These are the three men, two workers and one unemployed, who were killed today. They're the first to be legally executed as a result of the unrest. Each was executed by a bullet in the back of the head. In the past, families of executed men have received a bill for the cost of the bullet. The three were found guilty of setting fire to a train at Shanghai Station on June the 6th. The train had run through a barricade set up by pro democracy protesters. Six people were killed.

MR. MacNeil: Yesterday the Bush administration appealed to the Chinese for clemency for the 11 already under sentence of death. The President also cut off high level government contacts and sought to halt international development loans. Secretary of State Baker told reporters that today's executions would not bring even tougher measures.

JAMES BAKER, Secretary of State: We deeply regret the fact that these executions have gone forward, notwithstanding appeals from the United States, appeals from the Federal Republic of Germany, and perhaps other countries for clemency. The United States is not contemplating any additional action at this time. The actions which the United States has taken have been fully laid out there for you and we think, the President thinks that is the appropriate response. Under the circumstances, I ought to also say that, as we have discussed, there is an important relationship here which we should seek to preserve if we possibly can.

MR. MacNeil: Additional parts of a speech already published by China's senior leader, Deng Xiaoping, were printed in Hong Kong today. In the June 9th address, Deng said, "The United States used troops to suppress student and other demonstrators in the '60s and '70s", adding, "What qualifications do they have to criticize us?". Jim.

MR. LEHRER: The U.S. Supreme Court handed down an American flag today. The court ruled 5 to 4 that the first amendment protected the right to desecrate or destroy the flag. The case involved the conviction of a protester who burned the flag during the 1984 Republican Convention in Dallas. Justice William Brennan, writing for the majority, "Said the government may not prohibit the expression of an idea simply because society finds the idea, itself, offensive or disagreeable. The five votes included two from the court's new conservative majority, Justices Antonin Scalia and Anthony Kennedy. In another first amendment decision today, the court threw out an award against a newspaper in Florida for publishing the name of a rape victim. In a 6 to 3 vote, the court said such publication was also protected.

MR. MacNeil: In Fulda, West Germany, a 22 year old soldier pleaded guilty to espionage on the first day of a court martial. Specialist Michael Peri was charged with passing secret NATO defense plans to East Germany while missing from his unit for 12 days in February. His guilty plea was reported by a U.S. military spokesman. The charge carries a maximum penalty of life imprisonment. In Geneva, U.S. and Soviet negotiators held their first working session in the strategic arms reduction or START talks, which resumed on Monday. The two sides agreed to a news blackout on the substance of the talks.

MR. LEHRER: There was another high level U.S./Soviet encounter in Moscow today. Soviet Pres. Gorbachev met with Admiral William Crowe, Chairman of the U.S. Joint Chiefs of Staff. Crowe has been in the Soviet Union for the past 10 days, viewing Soviet military exercises and armaments. Gorbachev said the visit showed the two countries were moving from the notion of enemies to the notion of partners. Andrei Sakharov had some words of warning for Gorbachev. In a Soviet magazine article, the former dissident leader said he feared Gorbachev could become influenced by conservative elements or be removed from office by anti-reformers. He said the Soviet leader's position would be stronger if he had been elected in a multi-candidate national referendum. Yesterday Sakharov told a British audience that Western aid to the Soviets might serve to delay reform. He said ethnic and economic problems could lead to a military coup.

MR. MacNeil: Israeli war planes bombed a Palestinian guerrilla base in Lebanon today. The base belonged to a pro Syrian, anti Arafat Palestinian faction. The guerrilla said one of their fighters was killed and six injured. None of the Israeli jets was hit. It was Israel's ninth air raid this year. In Israel today, Prime Minister Yitzhak Shamir had a warning for his own people. He condemned Jewish settlers who attacked Arabs yesterday, following a funeral for a settler who had been stabbed to death. Shamir spoke out after Israel's national police chief said the growing dispute among Israelis over how to deal with the Palestinian uprising could lead to civil war. Shamir said, "All must be done to prevent such a war from taking place. It is the most dangerous thing that could happen.".

MR. LEHRER: In Vietnam today, a U.S. military delegation received the remains of 28 people believed to be American servicemen lost during the Vietnam War. At the transfer ceremony in Hanoi, Vietnam officials told the delegation another 16 would be turned over soon. A total of 212 remains have been returned to the United States since August 1987. Fifty-six have been positively identified as Americans.

MR. MacNeil: Pres. Bush said today that millions of Americans are free falling through society and appealed to young volunteers to rescue them. Speaking to 3000 teenagers on the White House lawn, Mr. Bush made the appeal as part of his Youth Engaged in Service, YES to America campaign, to stimulate community service.

PRES. BUSH: A simple fact in America today is that too many people are free falling through society, with no prospect of landing on their feet. No one, young, old, white, brown, or black, should be permitted to go through life unclaimed. You must show us how to reclaim these lives, we need you. And so today I call on you to commit yourselves, make it your mission to make a difference in somebody else's life.

MR. MacNeil: A wildcat coal strike that began last week spread to two more states today. Thousands of coal miners walked off the job last week in West Virginia, Indiana, Missouri, Kentucky, Pennsylvania, and Tennessee. Today thousands more joined them in Illinois and Ohio. In all, more than 1/4 of the nation's miners have walked off their jobs in sympathy with striking workers at Pittston Coal Company.

MR. LEHRER: The Republican members of the House of Representatives today filed an ethics complaint against one of their own. They asked the House Ethics Committee to investigate Congressman Donald Lukens of Ohio. Lukens was convicted last month of charges involving his having sex with a 16 year old girl. Lukens, who is 58 years old, has appealed the conviction. Today's Republican action asked the Ethics Committee to determine whether Lukens failed to conduct himself at all times in a manner which reflects favorably on the House.

MR. MacNeil: That's our News Summary. Ahead on the Newshour, the anatomy of the HUD scandal, drugs in public housing, and Rosenblatt on democracy. FOCUS - BUILDING SCANDAL

MR. LEHRER: The HUD scandal is first tonight. HUD is the U.S. Department of Housing and Urban Development. The last few weeks have been full of revelations of fraud, mismanagement, and influence peddling there. Two Congressmen who have been spearheading the investigation of the agency are here tonight, as is HUD Secretary Jack Kemp. They follow this background report from Kwame Holman.

PAUL MANAFORT, Lobbyist: [June 20] The technical term for what we do and what law firms, associations, and professional groups do is lobbying. For purposes of today, I will admit that in a narrow sense, some people might term it influence peddling.

KWAME HOLMAN: Yesterday Paul Manafort, a top Republican political consultant, told this House Subcommittee how he was able to use his political connections to secure millions in government funds to renovate a housing project he partly owned. He also managed to collect a $300,000 consulting fee in the process. This probably came as no surprise to the committee members. They've been hearing stories like this all month.

REP. TOM LANTOS, [D] California: You had a contract with a developer with respect to the Essex, Maryland, project for which you were to be paid $300,000, is that correct?

JAMES WATT, Former Secretary of the Interior: [June 9] I was to be paid $300,000 if the project were successfully completed.

REP. LANTOS: That's correct. How was the figure of $300,000 arrived at?

JAMES WATT: It was the offered amount and kind of the going rate.

REP. LANTOS: The going rate of what?

JAMES WATT: There was a thousand to two thousand dollars a unit and that was what they offered, they offered three hundred thousand and that was the way it was settled. It wasn't negotiated. It was just -- it seemed like a lot of money to me.

MR. HOLMAN: Former Interior Sec. James Watt, who admitted he had no prior experience in federal housing renovation, told the committee he saw nothing wrong with using his influence to help secure a contract to rehabilitate low income housing. And Watt said there was nothing immoral in his receiving a $300,000 fee for his efforts.

JAMES WATT: My credibility was used to get a result.

SPOKESMAN: Right. Therefore, you engaged in influence peddling.

JAMES WATT: If I were a Democrat, I would say that Jim Watt engaged in influence peddling.

SPOKESMAN: And if you were an objective Republican, would you also believe that that was --

JAMES WATT: No. I would say there's a skilled, talented man who used his credibility to accomplish an objective.

SPOKESMAN: Morally, morally and ethically?

JAMES WATT: That by definition is also there.

MR. HOLMAN: Developer Judith Siegel paid part of Watt's fee after her firm was awarded HUD money to renovate 300 apartments in this complex near Baltimore.

MR. HOLMAN: Did Mr. Watt peddle his influence to get this project for you?

JUDITH SIEGEL, Developer: Well, you know, that's kind of a sexy term, and, ummm, if you want to say that the people in HUD would take Mr. Watt's phone call faster than they would take Judy's phone call, if that's influence peddling, I think not. I think influence peddling is when you say you do this for me, and I'll do this for you, or you do this for me, because I can hurt you. That's influence peddling and that absolutely did not happen.

MR. HOLMAN: James Watt wasn't the only big name Republican to profit by helping get federal housing rehabilitation funds. Former Massachusetts Sen. Edward Brook was paid $183,000 for his consulting work and former Nixon Attorney General and convicted Watergate figure John Mitchell was paid $75,000. Influence peddling is only one of the abuses alleged to have occurred in the Reagan administration's Department of Housing and Urban Development. Other accounts have detailed how private agents sold HUD foreclosed properties like this one in Washington, D.C., then, rather than turn the money from the sale over to HUD kept the money instead. One of those agents, Marilyn Harrell, dubbed "Robin HUD" by the press, said she pocketed over $5 1/2 million, but turned most of it over to charity.

MARILYN HARRELL, Former HUD Closing Agent: [June 16] I had done a HUD closing where no one had asked where the proceeds were and it had gone for a couple of months, in fact, I think it went over eight months before anyone asked where the proceeds were for this particular case.

REP. CHARLES SCHUMER, [D] New York: What do you think the total amount of dollars are that have been lost in these escrow --

PAUL ADAMS, HUD Inspector General: Based on the best information that's available to us at this point on identified instances, I cannot, I would not say it seeks more than $20 million.

MR. HOLMAN: It was an internal audit by HUD Inspector General Paul Adams that first alerted Congress to possible fraud and abuse within the Housing Department. He has appeared before this House Subcommittee twice in the last month, mostly defending the cautious pace he took defending the problems he found.

REP. CHRISTOPHER SHAYS, [R] Connecticut: What specifically do you do to follow up when there's wrongdoing besides telling someone, the person who's probably involved in the wrongdoing?

PAUL ADAMS: First of all, Mr. Shays, the investigation was ongoing so we didn't have the final report, nor did we have the final audit. We did report it to the Congress in our September 30, 1988, report, semi-annual report to the Congress, that we had problems and it was an ongoing effort.

MR. HOLMAN: Another HUD employee wasn't as forthcoming with the committee.

DEBORAH GORE DEAN, Former Exec. Asst. to HUD Secretary: [June 13] I have accepted the advice of my counsel to decline respectfully to answer any questions posed by the subcommittee at this time on the basis of the rights guaranteed to me by the fifth amendment to the Constitution of the United States.

MR. HOLMAN: Finally, the man in the middle of the HUD scandal, former Secretary Samuel Pierce, told the committee last month that he was as surprised as anyone that his department wasn't functioning as it should have.

SAMUEL PIERCE, Former HUD Secretary: [May 25] Perhaps we should have watched the program closer than we did, but when you've got a whole department and you're thinking about so many other things, sometimes you don't do as much as you should with respect to a program. You lose some of it.

MR. LEHRER: [Network difficulty] -- the current Secretary of Housing and Urban Development. Mr. Secretary, welcome.

SEC. KEMP: Thank you, Jim.

MR. LEHRER: What words would you use to describe what was going on or what is going on at HUD?

JACK KEMP, Secretary of Housing and Urban Development: I'd certainly separate what was going on from what is going on now.

MR. LEHRER: All right. Let's do that.

SEC. KEMP: I hope you do. We've taken some rather bold, and some people would say radical steps to change the management practices at HUD, but I would characterize it as mismanagement, systemically flawed programs, influence in politics and outrage and moral, morally reprehensible conduct, and then I would pause and say but this Secretary and this President of the United States are going to clean it up from stem to stern and make these programs work on behalf of needy people, not greedy people.

MR. LEHRER: When you signed on to become the HUD Secretary, did you know about any of this? Had you had even a smell of it?

SEC. KEMP: Well, I did not honestly know the way the programs had worked or the extent of the flaw in the program, but I must admit, I knew that HUD was a troubled agency, I knew it needed leadership, I knew there was a need in our pockets of poverty and urban America for someone who cares and can bring some new thinking to the subject, so from that standpoint, I saw it as a great challenge. But being, you know, an old quarterback, I also saw it as a great opportunity to do some good and we're -- I want to emphasize that we are moving forward, as I told the mayors at the U.S. Conference of Mayors in Charleston on Monday, that we're moving forward on Pres. Bush's agenda of urban revitalization while cleaning up and cleaning house and reorganizing from stem to stern.

MR. LEHRER: Is there any question in your mind that Samuel Pierce simply did not run the agency properly for eight years that he was the Secretary?

SEC. KEMP: That question for me is a tough one, because I look upon him as a friend and as a decent and honorable and honest public servant. I've got to say to you, however, that I'm going to and am in the process of making a lot of changes, so I guess in juxtaposition or comparison with the way things were done at HUD in previous administration and frankly, Jim, in previous, plural, administrations, going back to Carter, I'm not going to do it the same way it's been done in the past, so if that's criticism of the past, I don't think it has been managed for a long time, and we're going to manage it correctly and I'm going to have zero tolerance for abuse and taking advantage of poor people or the programs that are designed for needy communities in the United States.

MR. LEHRER: As a Republican, how do you explain this influence peddling, the Jim Watt case and others, where people just because they could pick up the phone and get somebody on the telephone, were able to use money designed to help poor people the way it was? What does it do to you?

SEC. KEMP: There was a systemic flaw. There was a problem in the program and very frankly, there was not competitive bidding, the process was flawed, and I don't want to shift the blame, because it's not like Jack Kemp to do that, but I do want to say to anybody, to those who are watching and listening, there was a poison that allowed the developer, the contractor and the person with influence in any administration, be it Democrat or Republican, to have the ability to make a phone call and get that type of a contract. That is what we are removing and I hope you know, I know you know that when Mr. Adams presented me with the problems in mod rehab, as I told Congressman Lantos and Congressman Gonzales and the Senate, we literally suspended the whole program and reformed it and reopened it for bid and made it competitive predicated upon need and objectivity, not subjectivity, political influence, and I'm as morally outraged at Republican conduct as I would be at Democratic conduct. This is something that has been going on for a long time.

MR. LEHRER: How does it work now?

SEC. KEMP: First of all, we brought all the Public Housing Authorities into the process. The contracts are going to be competitive. We're going to have the Inspector General continually auditing on an ongoing basis. And any contractor or any businessman or woman having done business with HUD that has been found guilty of criminal contract either in any aspect of HUD's business with them is going to find not only that they're not going to do business with HUD again, they're never going to do business with any agency of the federal government again.

MR. LEHRER: What about people who call you, old friends, Republicans, Democrats, people in Congress, whatever, how are you going to handle that?

SEC. KEMP: There is -- it's very important that there be zero tolerance at the top of HUD. And I don't want to make it look like, you know, I am making moral judgments here, but I want folks to know in HUD -- and there are a lot of good, decent and honest, able people at HUD who are working hard for the common wheel, as well as a lot of good contractors and a lot of good builders and a lot of good developers and a lot of needy people -- I don't want to shut off the program from the need. What I want to do is make sure that they know from top to bottom and across that plain of every program at HUD that there is a Secretary and a President who is going to demand accountability, that there is zero tolerance for abuse of these programs, and I have pledged to clean it up, make it as competitive as possible, and take politics out of it, be it Republican or Democrat, be it Republican or Democrat.

MR. LEHRER: It was widely reported and has not been denied that during the Samuel Pierce regime of the eight years, the Reagan administration used HUD as a kind of repository for political, people who were owed political debts, but didn't have a lot of talent or abilities, and they would stick them over at HUD. Now, what's it like under the Kemp administration?

SEC. KEMP: Let me put a different cast on it. I think there was a brain drain at HUD and I don't mean to reflect negatively on the people who are there, because there's a lot of good people, but I have been proud under this President and under my stewardship of HUD under Pres. Bush that a lot of good men and women have come at great sacrifice, at great sacrifice to their own personal well being, the old, this old man, himself, had some sacrifice. I'm not trying to make anybody feel sorry for me, but there's a lot of good people who've come back to HUD, who want to work at HUD, and do right by folks who are in need, and I feel very confident that the type of men and women that we have chosen, the type of good people that are there, and the type of leadership that we're trying to exercise, that there is accountability, that there's going to be far more merit as a criterion. And then I want to say one other thing. Where there's embezzlement, where there's criminality, we've set up a strike force to go out and work with the Attorney General and work with the U.S. Attorneys in all of the regions of the United States to recover the assets that have been lost on behalf of the taxpayer and on behalf of poor people.

MR. LEHRER: It's astonishing, isn't it, how much money?

SEC. KEMP: Yeah. Yeah. Incidentally, I said this in Charleston, South Carolina, to the mayors, and I should say it to you and your audience, about the problem that has existed for a long time. Back in the early '80s or back in the '70s, the influence was there, the contributions to previous Presidential candidates were predicated in some states on their being part of the HUD construction programs. And I think it's important to know that whenever the government directly subsidizes a business, then you must be very careful that there is accountability and competition, whether it's defense or HUD, and I plan to try to make HUD that way in the future, whether it's mod rehab, or the Section 8 program, or co-insurance, or this problem with our field representatives who were in some cases acting in a criminal action to embezzle funds. They'll be brought to --

MR. LEHRER: Have you figured out a way to stop that?

SEC. KEMP: Yeah, yeah.

MR. LEHRER: These independent closings --

SEC. KEMP: They have to be fully bonded. I think Tom Lantos, Chairman Lantos, talked about bonding. They ought to be fully bonded. We're tightening up the bonding requirements. I would certainly consider licensing and making them meet professional standards. And while I believe in the private sector, I think wherever the government is cooperating or in partnership with the private sector, there have to be very strict standards of audit, control, accountability, and standards of ethical conduct, which Pres. Bush wants throughout the length and breadth of his government.

MR. LEHRER: Is there any question in your mind that you're going to be able to clean this thing up?

SEC. KEMP: No question in my mind. We're going to clean it up and we're going to move forward on our agenda simultaneously. I've pledged that to the Congress. I've pledged it to the President as late as earlier today and I have pledged it to the mayors, and particularly to the inner-city folks to whom I have been speaking for the past four and a half or five months.

MR. LEHRER: Have you been tempted to just kind of take that job as commissioner of the National Football League and say forget this business at HUD?

SEC. KEMP: I'm only pausing because it would have been tempting at perhaps another time and another --

MR. LEHRER: You mean the job?

SEC. KEMP: Yeah, the job. I love pro football. The players are friends of mine. My son is a player. The owners are friends of mine. Roselle is a good friend of mine. But right now I feel that the challenge is in waging war on poverty and cleaning up HUD and doing a good job for the Bush administration and also, even more important, doing a good job for people who really are crying out desperately for help and hope and assistance.

MR. LEHRER: Finally let me ask you this. When you agreed go to on the Bush cabinet, a lot of people said Jack Kemp's going to have a problem because Jack Kemp is a man with his own ideas and he's going to have real problems subjugating them to George Bush or anybody else. Have you had any?

SEC. KEMP: No, Ireally haven't. I can find places where I would disagree with this or that. I think the Bush Presidency is very good for the country, and I've said many times I think he's the right man at the right place in history for our country and in that sense, I feel very comfortable with the overall direction. I might have done a couple of things differently, but as far as my agenda for fighting poverty and pursuing enterprise zones and affordable housing for low income people and --

MR. LEHRER: So you're --

SEC. KEMP: -- the homeless, absolutely no.

MR. LEHRER: So you're not having to bite your tongue all of the time on other issues?

SEC. KEMP: I have not had to bite my tongue. The President is very capable of listening to the debate. We've had some good debates in his administration. I like his cabinet, I like he and his wife. It's a lot of fun, and what I've found is that there are nobody in Congress, left or right, who don't want us to succeed in HUD. I think everybody has a sense of good will, at least hoping, for whatever reason, in both simultaneously waging war against poverty and hopelessness, as well as cleaning up this agency that's in desperate need of an overhaul from stem to stern.

MR. LEHRER: Sec. Kemp, thank you.

SEC. KEMP: Thank you, Jim.

MR. MacNeil: We get more on the Congressional investigation of HUD now from California Democrat Tom Lantos, the chairman of the Government Operations Subcommittee conducting the inquiry. Joining him on Capitol Hill is Republican Committee Member Christopher Shays of Connecticut. Chairman Lantos, first of all, how do you feel about the way Mr. Kemp has handled the situation since he took over?

REP. TOM LANTOS, [D] California: [Capitol Hill] Well, I think Sec. Kemp is the right man, in the right job, at the right time. I couldn't be more pleased that he is presently our Secretary of Housing and Urban Development. Jack Kemp has a passionate commitment to clean, honest, open government. And as chairman of the subcommittee with oversight responsibility, I must say I have had the most excellent cooperation from Jack Kemp. He has had, I believe, the same cooperation from me, and working together we will, in fact, clean up this mess. I couldn't be more pleased that a man of Jack's integrity and ability and determination has this very very difficult and unpleasant assignment.

MR. MacNeil: Do you now feel you know the full dimensions of all this, or is there a lot more to be uncovered?

REP. LANTOS: Robin, there is a lot more to be uncovered. One of the things that I think we must understand is that housing is a decentralized industry. When you are dealing with a scandal in the Department of Defense, you may be dealing with a major defense contractor. When you are dealing with a problem at HUD and you find the problem in the New York office, the chances are the same problem exists in a dozen other offices. As a matter of fact, I find it extremely significant that the Attorney General has decided to unleash all U.S. Attorneys on all HUD field offices all across this country. I think the problems will be coming in over the next few months and I am afraid that my good friend Chris Shays and I and Jack Kemp will be busy with this for a long time to come.

MR. MacNeil: Can you add to that, Congressman Shays, in what direction you think the further uncovering will lead us?

REP. CHRISTOPHER SHAYS, [R] Connecticut: [Capitol Hill] Well, HUD is an agency in total disarray, and I just couldn't be more pleased that you have Jack Kemp leading it. We're very proud of him, and we're working with him, Republicans and Democrats, but I think wherever you look at HUD, you're going to find problems.

MR. MacNeil: What is the most troubling aspect, Congressman Shays, of what you've heard in the weeks you've been looking at testimony?

REP. SHAYS: Well, I think the most troubling thing is that it's been going on for years. It's an agency that's been in disarray for decades literally. And when Sec. Pierce was made Secretary, he found it in disarray and left it even worse than he found it. And as a result, we've lost good people, people who believe in housing for the poor and for modern incomes who want to help and just felt very discouraged.

MR. MacNeil: Chairman Lantos, is this just a Republican scandal, or was it Democrats too? The Secretary has just said previous administrations, plural. Was there historically no controls at HUD, or just during the Reagan years?

REP. LANTOS: Well, Robin, let me say in the first place, that I am one of those who feels that virtue or vice are not the monopolies of either political party. The fact is that for the last eight years we have had Sec. Pierce in charge of this department. As a matter of fact, he's the only cabinet member of the previous administration who came in at the very beginning and stayed to the very last day. So he had eight years to run an agency. Whatever previous problems may have existed, he not only failed to clean them up, but he clearly ran an agency that Jack Kemp describes as a swamp, and I subject swamps might object because they're losing their good name.

MR. MacNeil: Well, let me ask you this. The Secretary just described Pierce as his friend, as a decent, honorable and honest public servant. Do you agree with that?

REP. LANTOS: Well, I don't know Sec. Pierce nearly as well as Jack Kemp does and Jack will have to stand by his characterization. I have no notion how honest Mr. Pierce is. I always assume that an individual is honest unless there is proof to the contrary. And there is no proof in this case thus far. What is obvious is that under his stewardship for eight years you have had blatant influence peddling of the most sleazy and unethical type, you have had embezzlement, fraud, malfeasance, nonfeasance, all of this, while Sam Pierce sat in his chair as Secretary of HUD.

MR. MacNeil: Let me ask your colleague, Congressman Shays. What do you feel about the Secretary's testimony, Sec. Pierce, that all this was a complete surprise to him?

REP. CHRISTOPHER SHAYS, [R] Connecticut: Well, I mentally wept, because I felt that here was a man who had an opportunity of a lifetime to be a Secretary, cabinet official.

MR. MacNeil: You believe him when he says it was a surprise to him?

REP. SHAYS: Well, I believe him when he says it was a surprise to the extent that it exists, and I feel that he was someone who simply wasn't in charge and let a lot of people under him do their own thing and their own thing was hurting the public.

MR. MacNeil: You don't think that he was implicated in this influence peddling and so on himself?

REP. SHAYS: I think he clearly was involved in this whole process. There's no doubt in my mind about that. In terms of whether it was malicious or not I just don't know.

MR. MacNeil: Is he going to be recalled as a witness, Congressman Lantos?

REP. LANTOS: He may well be recalled as a witness. We are really only at the very beginning, Robin, of our investigation. There are new major issues coming up almost daily, certainly weekly.

MR. MacNeil: Can you describe a few of the major issues coming up and some of the witnesses who will be coming?

REP. LANTOS: Let me just try to categorize the problems. In the first place, we have people outside of HUD who have stolen vast amounts of sums from HUD. We had a woman who admitted before our subcommittee that she diverted, to use an elegant phrase, $5 1/2 million or so, and it may be much higher than that, from HUD accounts to her own private accounts. Then we had HUD officials who embezzled funds. We have the case in Denver where a HUD employee transferred electronically about a million dollars, and it may prove to be much higher than a million dollars, from HUD accounts to his own private accounts. Then we have the overcharging cases. We have now found the functional equivalent of the $600 toilet seat of the Defense Department. We now find in Tennessee that tub repairs which should have cost less than a couple of hundred dollars were overcharged by a factor of four. Then we have what to me is the most unseemly, the most unethical, the most sleazy conduct of people well connected, using their political connections like Mr. Watt with a brief meeting with Sec. Pierce and a handful of telephone calls making hundreds of thousands of dollars.

MR. MacNeil: Mr. Kemp just said that there was also influence used during the Democratic Presidencies and quid pro quo suggested during campaign giving. Can you support that?

REP. LANTOS: No, I certainly can't support it. As you probably know, I was not in Congress during that administration. But I would certainly accept Jack's statement that all of the problems of HUD did not originate during the course of the last eight years, and I stipulated that neither vice nor virtue is the monopoly of either party. The fact is that my subcommittee is conducting a totally bipartisan fair investigation with the sole purpose of cleaning up what Jack Kemp has referred to as a swamp.

MR. MacNeil: Congressman Shays, do you think that what Mr. Kemp has done is enough, or there will be new legislation required on how HUD is run?

REP. SHAYS: There will be a lot of new things. First off, this committee is working on a bipartisan basis. I have members, Republican members, who say, you've got to get at this, this is just disgusting, what's going on. You're going to see HUD cleansed, you're going to see new legislation, you're going to see new programs. It's a bipartisan effort and the American people I feel certain can feel in the years to come that there's going to be a change at HUD.

MR. MacNeil: What about new ethics rules, Congressman Lantos, are they needed governing the kind of influence peddling that you talked about?

REP. LANTOS: Well, I don't think ethics can be taught, Robin. I think it's quite obvious that it is difficult to completely give Sec. Pierce a clean bill of health. After all, he could have thrown Mr. Watt out of his office for lobbying for something that should have been made available at no charge to the most meritorious project. Let me give you an analogy.

MR. MacNeil: I'm afraid, Congressman, I'm very sorry, but we've run to the end of our interview time.

REP. LANTOS: We'll do it next time.

MR. MacNeil: We'll do it next time. Thank you and Congressman Shays for joining us. SERIES - TALKING DRUGS

MR. LEHRER: Next, Charlayne Hunter-Gault's weekly conversation series which examines solutions to the drug problem. Tonight, voices from the front line in Atlanta.

MS. HUNTER-GAULT: This is the Carver Homes Housing Project, one of the oldest of Atlanta's developments for low income people, average income is about $4,000 per family. Close to 2500 families live in its 990 units. Carver Homes is located in an area known as the war zone because of the rampant crime, much of it drug related. Last year, crime was up 17 percent over the previous year, with an increase in random night time shootings. It's a familiar story in housing project all over the country. But there are points of light in Carver Homes, at least in the vision shared by women from different worlds who have been brought together by their mutual desire to do something about the drug problem in public housing. Louise Watley, a lifelong resident of Carver Homes, is president of the citywide advisory council on public housing, representing a majority of the tenant associations in the city; Jane Fortson, a banker, is commissioner of the Housing Authority and chairman of its drug task force. Together, activist and public official, they frequently meet in the war zone to test their mutual conviction that the will of the community is critical to solving the drug problem in their midst. Already, they have witnessed a change of heart by many residents, sparked at first by a big old fashioned church revival meeting against drugs held on the grounds last year. It was the first step in a series of community meetings, one of which was attended by the mayor, that have heightened awareness, helped overcome the fear that had permeated the community and led to growing tenant activism against the drug dealers. On a recent visit to the area, they told me how the drug problem had affected the community, especially the children.

LOUISE WATLEY: Children who are school age children are afraid to go to sleep at night. They're afraid to go to the restroom because of the shooting. They wake in cold sweats. They go to the classroom the next day and they sleep in the classroom and the teachers ask, why are you sleeping, and they say we couldn't sleep last night because they were shooting, we was afraid we were going to get shot. Some of the kids say, we get on the floor and we crawl to the bathroom at night, and some of them start to bed wet and things like that because of the problems so severe. Mothers are afraid to let the kids play outdoors in the front or backyard. They have to keep them in the house and the children get frustrated, and they get on each other's nerves, and that created a lot of stress on her pressure on the children, because they don't want them to be shot or hurt. And it took a police murdering a young man who was involved in drugs to bring some folks together, but we were able to come together and had some outdoor revivals. We brought in the ministers. We had business folks to come in and work with us.

JANE FORTSON: And the preachers came and they talked about a value system, of bringing a value system back into this community, and there was a tangible spirit being built there. At the same time, the police force was coming in and establishing friendly contacts in the community. At the same time, the school system, the principals of the schools were coming in and reaching into the community, and you could begin to feel a spirit building, and the results have shown themselves here.

MS. WATLEY: What happens, a lot of folk would see it happen, see the folks on the corner and say, well, they're not bothering me and they would see it and finally it was in everybody's yard almost, and then we got together and met. And some people got hammers and sticks and say get out of my hard, you can't stand there, you have to get out, and call the police. You call 911 and the police come to your house and a lot of folks are afraid to call, so what we did, we organized, and everybody would call 911, maybe 10 families would call 911, so they couldn't come to everybody's house so they had to come into the area. And that is very important, when you build that relationship. It's a team effort between the police department and the tenants because if you don't have that, they can't do it alone and the tenants can't do it alone.

MS. HUNTER-GAULT: How hard was it to get people to the point that they felt they could work with the police?

MS. WATLEY: They had to get really fed up. They would call me and say, you know, they would call and say I have a problem up here and I want somebody to call me, and I said, well, I don't see that, you see it. You report it. They say, I'm afraid to report it. I say, well, you have to, and that's when we set up the network that everybody would call and report it. And then we would have meetings in this building here twice a month and we just met one day and said we are tired and we said that -- that really got things moving. Because we decided we were going to go out on rifle range and be trained, buy our own guns -- we made that information available to the mayor's office, what we were going to do and we got some results from that.

MS. FORTSON: There has to be enough outrage to say we've had enough, we are not taking it anymore, we are taking our communities back and they're ours. And when that happens, when that happens, that's when they become empowered and change begins to occur.

MS. WATLEY: I drive this committee to 2 o'clock in the morning, anytime I want. They've wrote nasty names on the van, on my car, but when they see me coming, they get back, they run from me faster than the police officers. Then we had two or three young men who got killed in my neighborhood. For the first time in my life, a young black man laying dead on the ground, I heard folks cheering, saying, one more gone, another one bit the dust. We as black folks don't usually rejoice in death and they did rejoice in death at those young men that had been terrorizing the community.

MS. FORTSON: I think that fear is an inhibiting factor in the community rising up against the drug dealers, but I see it has being probably subordinant to the fact that this is a community that's in pain. This community is in pain because the outside world says it has no value and internally they're having a crisis of self-esteem. And these two things combine to take the motivation out of being able to fight that fear and the greatest thing I think that we can do, those of us on the North side, is to care enough to say you count, you have value.

MS. HUNTER-GAULT: How do you show that?

MS. FORTSON: We show that by getting involved in these communities, by making resources available, by people like myself coming out and getting involved and caring. We do it through our churches, we do it by giving a mandate to our housing and our school systems and saying you must address these problems through your own systems. And as soon as that mandate occurs from the outside community by saying, validating so to speak, by saying you have value, and I think it'll add to the courage that's in this community. This community was, in Atlanta particularly, this black community was a big participant in the civil rights movement many years ago. And at that time, fear was a factor as well but there was a great moral courage that swelled up and carried this community to a victory. And that same moral courage has to come from within, not without. That same moral courage has to swell up.

MS. WATLEY: Onething I find, fear, they fear the drug pushers. I never feared them because I never took drugs. I never have been involved in drugs and I have two grown sons and they've never been involved in my house. Now I'm not going to say they haven't been involved in drugs. And too many families are into it and they're not talking and there's a smoke screen when they're saying they're fearing. They're not really fearing because they can't call the police and turn in their own child. And we have talked to folks and talked to them and said, if you don't want to get put outdoors, if you know you're son's doing it, you must turn them in. And we had families call and say my son is selling drugs and I'm tired of this, come get him. And that it took a big person, they cried afterwards. But I embraced the lady who come crying. I said, well, you, I admire you, it took a lot of courage to do that. She said, he'll be in jail, but at least he'll be alive, if he stays on the street, someone going to kill him. And it took that kind of encouragement from parents saying, enough is enough, and I'm going to report it, and when they start facing up to the fact a lot of fear went away, that they had psyched themselves up to say that they was fearful.

MS. FORTSON: There's a difference here though. When a parent becomes concerned about his daughter, his child, his son becoming involved in drugs, the only response is they have to call the police. In our middle class and upper class neighborhoods, when a child is involved in drugs, they call a private hospital and they commit that child to a treatment center. Those centers are not available to low income people. Those centers are not available widely in this community. When the child voluntarily wants to come off of drugs, when a parent wants to come off of drugs, there's very little available to that individual to be able to kick the habit, so a parent, the only recourse that parent has is to call the police, and then it becomes a criminal problem, not a health problem. MS. HUNTER-GAULT: What kind of advice would you give to Drug Control Director Bennett? MS. FORTSON: First of all from what I've been able to read and from what I've heard, the trial balloons that have gone up as of this time have been the classic warrior response, more guns, more police, more jails, more planes, more boats. It's we're going to go out and we're going to fight this thing till we win. And it's an understandable approach, but I don't think it's going to work. In fact, I'm sure it's not going to work. The problem is more complex than that. On the supply side, you have an economy that's the largest economy in the world. You have in low income neighborhoods the foot soldiers of that economy. You've got the door to door salesmen, except the doors drive up. And the distributorships and the turf is protected by violence, a very terrible kind of violence, instead of company policy. So you have a very powerful economy in low income neighborhoods and throughout the drug culture, whether it be in upper income or low income, however, the demand side what you have is, we take drugs for two reasons. We take drugs either to help ourselves heal or to alleviate pain. I think that probably aspirin is the largest used drug in the world and it's a painkiller. Drugs alleviate pain and in this community and in any community that uses drugs it's used to alleviate pain, whatever that pain is. And we've got to get to the root causes of pain and we've got to make resources available to reach to that pain and do something about it.

MS. WATLEY: If I could speak to how drugs are, I wish they would stop playing games, because that's what they're doing, they're playing games. It's no accident that drugs come to public housing. It's no accident it's here. We don't have the boats, we don't have the planes. We don't bring it into this country. And this is a way of control. If you're geeked out, as they call it, on cocaine, you ain't going to fight about nothing. You're not going to be worried about not having a job and not being able to make it in society, you're just going to be geeked out, and that you won't be in the streets rallying like they did in the '60s, and we have the same problem that I see is worse than it was in the '60s, so this is a way to control a whole generation of folks and it was put here I think to control the low income blacks. But, you know, everybody's into it and that if they want to deal with the drug problem, if they can go to the moon, they can deal with the drug problem. They don't want to deal with the drug problem. If I was the mayor for a few minutes or the governor, or whomever, I would get on top of it, because my feeling is that anybody come here to buy drugs, we should take their car and sell it and take their money and turn it to a service program, give the money to help the community. Who buys the drug in public housing? In most parts, it's the folks from surrounding areas, the clean kind of cars come in and buy drugs, they come in and drive out. The truck drivers come in and buy drugs. Yes, some of the tenants use their food stamps on drugs, but most of the drugs are bought by those individuals who are out in the work force, your next door neighbors, your friends.

MS. FORTSON: I agree with Ms. Watley. When we first established the task force, I said at that time that the drug problem was bigger than public housing in Atlanta, it was bigger than low income neighborhoods in Atlanta, it was bigger than Atlanta. It was a problem of international scope and it was really something that was beyond our reach for really being able to address the problem. We have the limited resources and it's an international problem, so I didn't have any high expectations that we would come up with answers and with solutions. And what has turned me around is getting to know this community, communities like this, hearing the frustration, feeling the rage, and feeling the sense of impotence that comes from this community.

MS. WATLEY: Only the drug users, the drug dealers can it be solved; those who are not using it feel that it can be solved because when I talk to folks they're usually the ones, the users or sellers who's saying it's not going to be solved. But the folks who are not using it say it can be done, because I don't believe there's no thing on earth that can't be conquered, and this can be done because we have made a big change and we are going to be drug free again.

MS. HUNTER-GAULT: Well, thank you, Ms. Watley and Ms. Fortson. ESSAY - SOUNDS OF SILENCE

MR. LEHRER: Finally tonight, our plans to air essayist Roger Rosenblatt's thoughts on democracy changed due to the length of the HUD discussion. Instead, we have his comments on silence. Roger Rosenblatt is Editor of U.S. News & World Report.

ROGER ROSENBLATT: If we can see the stars, why can't we hear them? I mean, things as big as that, you'd think that they would make the most God awful noise, tremble the nights with nuclear thunder, but no, they just sit up there as silent as clams, silent as mountains. Mountains are quite big in themselves and you'd expect them to make some noise. But they too keep their mouths shut or whatever they keep shut, lacking the apparatus for noise making. The sky, not a sound from that. Islands, pastures, the ocean, not a peep, unless the wind blows it about. Hard to know what to make of all that natural silence. We, after all, are just as natural as the stars and we make lots of noise. We make noises all our own. We make machines that make noises for us. And we are not alone in making sounds. Other animals chip in. We've got a lot to say, us animals, a lot of noise to hurl into the universe. But the great objects in nature, they keep their own counsel, a canyon, a forest, a sphaeroid, a cloud. You might conclude that such objects have nothing to say. But writers have addressed observations to them for thousands of years. "I walked as lonely as a cloud." "My mistress's eyes are nothing like the sun," wrote Shakespeare, who also deduced "I can make nothing of nothing.". Do you think that it is the silence of those objects that so impresses us? We make our own little squawks in contrast. They sit back mum, like brooding judges, like God, no comment. There must be something to that silence. We offer our prayers to silence, receive silence in return. I can hear you and you can hear me. We hear each other when we make our sounds. Who hears us when we do not make sounds? Who hears our silence? Maybe it's those silent bignesses which may hear only silence being silent themselves. Is silence the raucous of the universe? An eclipse of the sun too makes no noise -- listen. RECAP

MR. MacNeil: Again, the main stories of the day, despite clemency appeals from around the world, China executed three people arrested in pro democracy demonstrations. The U.S. said it deeply regretted the action but would not impose new sanctions. The Supreme Court said that under the first amendment people have the right to destroy or desecrate the American flag. Good night, Jim. MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.