Evening star., 1954-09-20
BroWneI| Calls
For FHA Probe
By Grand Jury
Rover Told to Present
Evidence on Powell:
National Quiz Set

Attorney General Brownell an
nounced today he has directed
United States Attorney Leo A.
Rover to conduct a special grand
jury investigation into any
bribery or other criminal conduct
IN connection with the Federal
housing program.
Mr.. Rover has been instructed
specifically to present evidence
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Senate FHA Probe Gets Underway in
Indianapolis Today. Poee A-3
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in connection with activities of
Clyde L. Powell, former assistant
commissioner of the Federal
Housing Administration.
No date has been set for the
opening of the special grand
jury investigation. However, i'm
panelling of the grand jury, au-
thorized by Chief Justice Bo-
litha j. Laws of the United
States District Court for the
District of Columbia is expected
shortly, the Justice Department
announcement said.
Powell Gets Subpoena.
1t was learned today that
Mr.. Powell was served with a
subpoena last Friday for a
grand jury appearance on Oc-
tober 6.
The Attorney General also re-
vealed that sweeping investiga-
tlons are contemplated in other
jurisdictions concerning any
criminal conduct that may be
uncovered by investigation in
those districts.
Mr.. Brownell said Assistant
Attorney General Warren Olney
III, head OF the Justice Depart
ment's Criminal Division, will
call upon United States attor.
neys this week in all other dis
tricts of the Nation to present
cases to grand juries as soon
as material is available on full
testimony concerning criminal
conduct uncovered by the ad-
ministration's investigation.
Previously. the Justice Depart
ment reported it first received
widespread complaints in FILA
matters early in 1858. The Fed
eral Bureau of Investigation was
Instructed to survey the situation
and, after consultations between
Mr.. BroWneH and Administrator
Albert M. Cole of the Housing
and Home Finance Agency, the
FBI was requested last April to
assume primary investigative re-
sponsibility for all allegations of
violations.
"a Criminal Indictments.
Summaries of department ac-
tlvltles during last year and to
mid-August of this year showed
foreclosure proceedings ordered
on 80 housing projects involving
$32 ,O09,476 in FILA insured
mortgages and IA criminal in
dlctments involving 1856 indivi-
duals of whom Ct had been con-
vlcted. Most of the criminal
cases involved falsified loan doc.
uments in the home-improve-
ment program. However, others
included corruption of Govern
ment officials, mail fraud and
violation of banking laws.
Mr.. Brownell referred to last
weeks final report of Deputy
Administrator William F. Nc
Kenna of HHFA to Mr.. Cole on
the special investigation and
said:
1T shows how the huge Fed
eral agency upon which the
Nation depended for stimulating
home building and construction
became riddled with corruption
-Ander the prior administration"
The Attorney General also said
the program directed by Mr..
Powell had resulted in exploita-
ton both of the Government
and the tenants and in financial
"windfalls without precedent" to
promoters.
Had Arrest Record.
Mr.. Powell, who entered FHA
IN 1888, rose to assistant COM
missioner despite knowledge of
the former administration of an
arrest record, including convic-
ton of jewel theft, the Justice
Department announcement said.
While assistant commissioner.
Mr.. Powell had charge of the
rental housing program which
(See FILA, Page A-4.)
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