Hud Checks Claim That Rice Exaggerated Blight To Get Loan

Federal investigators conducting a background check on Mayor Norm Rice have interviewed two community activists who question Rice’s involvement in a 1994 federal loan.

Rice, still waiting to hear whether President Clinton will choose him for a Cabinet position, returned from Washington, D.C., Thursday night as the background check was underway.

Rice is reported to be under consideration for secretary of Housing and Urban Development. The HUD inspector general is investigating the complaint.

The Seattle Post-Intelligencer reported Friday that the complaint accuses the mayor, City Councilwoman Martha Choe and other city officials of misleading HUD by exaggerating “spot blight” in the vicinity of the vacant Frederick & Nelson building downtown.

Rice’s aides say the complaint is unfounded. They say HUD officials, responding to an earlier but similar accusation, said last year that nothing was improper about the city’s obtaining the loans for renovation of the Frederick & Nelson building and nearby properties.

The complaint was filed by Jordan Brower and John Fox, members of the Seattle Displacement Coalition, an advocate group for the homeless.