WASHINGTON - A top federal housing official testified yesterday that, in expectation of receiving a $100,000 bribe, he engineered the award of a federal grant to a Florida housing project that was 15% owned by Lance Wilson, a former Paine Webber Inc. vice president.
Dubois Gilliam, a former deputy assistant secretary at the Department of Housing and Urban Development, delivered the testimony under a grant of immunity as the government's key witness in its conspiracy and fraud case against Wilson and two other defendants before the U.S. District Court here.
Gilliam also said he made sure the Wedgewood Plaza housing project in Riviera Beach, Fla., received an Urban Development Action Grant because he wanted to do a favor for Wilson, a former HUD chief of staff who helped initiate him into the department and whom he regarded as a "friend."
After the project received $3.6 million of funding in November 1985, Paine Webber, Wilson's employer at the time, was added in as co-manager of a $21 million tax-exempt bond offering for the project, according to Florida officials involved with the deal. Smith Barney, Harris Upham & Co. and the William R. Hough Co. also managed the deal.
Gilliam, who is the 11th witness to testify in the four-week-old trial here before the U.S. District Court, said he championed the Wedgewood project on behalf of Wilson and its developer, co-defendant Leonard Briscoe, despite objections to the project from the department's staff reviewers.
Those reviewers testified earlier that they did not believe the project qualified for federal funding because it did not benefit many low-and moderate-income tenants, and because the developer, co-defendant Briscoe, had not contributed enough equity, among other reasons.
Gilliam said he forced the staff officials, who worked under him, first to classify the project as being in a "pocket of poverty" eligible for funding, despite their doubts. And then he said he had them approve changes in the project plans that would enable Briscoe to use some of the federal funds to pay a $100,000 "consultant fee" that Gilliam said was actually intended as a bribe for himself.
Briscoe originally attempted to pay the alleged bribe or consultant fee out of the project's bond proceeds, Gilliam testified. But on the day of the bond closing, on April 23, 1986, the issue's bond counsel, Bryant, Miller & Olive, informed Briscoe that he could not pay such "soft costs," which they termed "developer overhead," out of the bond proceeds, Gilliam said.
Briscoe then telephoned Gilliam and said he could not close the bond deal unless he got an amendment to the grant agreement, allowing him to pay the alleged bribe and some other "soft costs," such as construction interest out of the grant proceeds. Gilliam said he approved the change over the phone.
"I wanted this done because I expected to benefit, to get $10,000," Gilliam said. He added that the money was to be split evenly between himself and a friend who is the third defendant in the case, David Maurice Steier, an attorney in Nebraska.
Gilliam said he hired Steier to establish a shell corporation in Nebraska, Northwest Investment Co., which would hold and invest the money until he left the government. He said Steier notified him shortly after the bond deal was closed that he had received the $100,000 from the issue's trustee, Barnett Bank.
Steier has maintained that he obtained the $100,000 fee for providing tax-exempt bond advice on the bond deal as well as other legal advice to Briscoe through Briscoe's now-deceased personal attorney, Darrell Wood.
In an attempt to discredit Steier's alibi, the government called in another witness yesterday, a West Palm Beach, Fla., attorney, Paul Courtnell of Gunster Yoakley & Stewart, who said he was also hired by Briscoe's development firm, Wedgewood Plaza Associates, to provide bond advice on the deal. Courtnell said that despite attending the closing and spending hours reviewing the bond documents for the deal, he never saw, talked to, or heard of Steier, and was not aware that Steier was being paid as a consultant on the bonds' tax-exempt status. Courtnell said he was not the primary bond counsel on the deal, however, which was the Bryant firm. Bryant attorneys so far have not testified in the trial.
Gilliam, who admitted at the beginning of his testimony that he has lied repeatedly not only to federal prosecutors and judges but in testimony before Congress in 1990, said that to provide Briscoe with a "cushion" for paying the bribe he granted the Riviera project nearly twice the federal funding it needed.
He said he obtained Briscoe's agreement to kick back 2% of any future grants he approved for Briscoe's projects. Briscoe's attorneys have not yet had the opportunity to cross-examine Gilliam, who is expected to testify for several more days. Defense attorneys are expected to stress that Gilliam has admitted that he has perjured himself in previous testimony and they will argue that he is lying again, Wilson told a reporter yesterday.
While Gilliam's testimony did not directly implicate Wilson in the alleged bribe, he said that Wilson introduced him to Briscoe and seemed aware that he would ask Briscoe to cooperate in arranging the payoff.
"Lance said Briscoe was a fair man. If I scratched his back, he'd scratch my back," Gilliam said. Gilliam testified that he also received several other small cash payments from Briscoe, ranging from $2,000 to $4,000, at meetings here and in Florida.