Where Were the Media on HUD?

Big bucks. Heaps of hypocrisy. Influence peddling by prominent Republicans. The unfolding scandal at the Department of Housing and Urban Development is the kind of story that guarantees front-page play. It is also the kind of story that could guarantee brilliant future careers, perhaps even Pulitzer Prizes, for enterprising journalists. So reporters have pounced on Washington's latest example of sleaze. There is just one hitch: it's yesterday's news. All that murky bureaucratic back scratching and buck passing happened during the heyday of the Reagan Administration. Where was the ever vigilant press back then?

The short answer: sleeping. Almost 5,000 reporters prowl the nation's capital, and during the Reagan era, many Washington insiders knew what any inquisitive reporter should have known: HUD, with its million-dollar contracts, was a feeding trough. "Everybody who talked about HUD knew there was money to be made," says Republican political consultant David Keene. Despite recurring gossip about payoffs and even some hard evidence, the nation's best TV news organizations, newspapers and newsmagazines -- including TIME -- failed to report the corruption at HUD until last spring, when an internal investigation jump-started the story. The entire episode says a great deal about shortcomings in the way the press covers Government. "Somebody, an editor or a reporter, should have said, 'Where is the money going?' " says Bob Woodward, assistant managing editor of the Washington Post.

At least one reporter picked up the scent early on. In December 1986 Joan Jacobson, a housing reporter for the Baltimore Evening Sun, received a tip: Rhode Island developer Judith Siegel was throwing James Watt's name around HUD offices in Baltimore in connection with a low-income-housing rehabilitation project that Siegel wanted to develop in Essex, Md. Like any good reporter, Jacobson started asking questions. Why would the former Interior Secretary, now a Wyoming-based businessman and a professed enemy of Big Government, be involved in such a project? Jacobson started combing every public file on the 312-unit Kingsley Park development but could not turn up any references to Watt. Jacobson says Siegel flatly denied that Watt was involved. Since Jacobson could not confirm the story, she shelved it.

As it turned out, Jacobson's source was right. Watt had received a $300,000 consulting fee from Siegel for making eight telephone calls and holding a 30- minute meeting with HUD Secretary Samuel Pierce to ease the way for the project. Siegel claims she does not recall talking with Jacobson in 1987. "You think I'm going to risk five, six or seven hundred thousand dollars talking to somebody on the Baltimore ((Evening)) Sun?" asks the developer today. Local housing officials, curious about Watt's involvement, were cheering Jacobson along. "I wanted her to find the facts," says Maryland community-development administration director Trudy McFall. "But they just weren't there." Laments Jacobson: "I feel bad that I couldn't prove the story."