Reagan HUD Scandal Exposed, Samuel Pierce Influence Peddling Investigation

Congress begins investigating whether HUD Secretary Samuel Pierce engaged in mismanagement and abuse of resources during his eight-year tenure under Reagan, uncovering that the department became a center of influence peddling and favoritism toward Pierce’s friends and political allies. During his tenure, Pierce—widely derided as “Silent Sam” for his low profile—fulfilled the Reagan-era mission by drastically curtailing the agency’s massive grant programs and shrinking its bureaucracy. Investigators conclude Pierce and his aides may have illegally steered large amounts of government money toward projects developed by influential Republicans, wasting millions if not billions of dollars.

Three congressional committees and the Justice Department’s public integrity section investigate HUD officials and programs. The probe of the moderate rehabilitation subsidy program focuses on politically influenced decisions made at the highest official levels within the department. More than a dozen former HUD officials, including Pierce, figure in the investigation. Sixteen convictions are eventually handed down, including: Deborah Gore Dean, executive assistant to Pierce, convicted on twelve of thirteen counts including conspiracy, accepting illegal gratuity, perjury, and concealing articles; James Watt, Reagan’s Interior Secretary, indicted on 24 felony counts, pleading guilty to a single misdemeanor with five years’ probation and $5,000 fine; Thomas Demery, assistant HUD Secretary, pleading guilty to steering HUD subsidies to politically connected donors; and Silvio DeBartolomeis, assistant HUD Secretary, convicted of perjury and bribery.

Secretary Pierce, the “central person” in the scandal, is never charged because he makes “full and public written acceptance of responsibility.” Although Pierce—the first Black partner in a major New York law firm, first Black board member of a Fortune 500 company, and only Black Cabinet secretary in the Reagan administration—avoids criminal charges, a five-year investigation ends in 1995 with his statement acknowledging “my own conduct failed to set the proper standard” at HUD. The scandal represents the culmination of Reagan-era systematic hollowing out of federal housing programs while converting remaining resources into patronage for Republican donors and lobbyists.