Cash-Strapped Housing Secretary Stepping Down Legal Bills Force Cisneros To Look For Better Paying Job

Henry G. Cisneros resigned Thursday as secretary of Housing and Urban Development, leaving President Clinton with the seventh Cabinet vacancy he must fill as he embarks on his second term.

One of the nation’s most successful Latino politicians, Cisneros has said for weeks that financial pressures are squeezing him with two children in college and his legal bills mounting from an investigation by an independent counsel of possible false statements he made to the FBI.

In a letter to Clinton, Cisneros said he was honored to “have worked the last four years to advance your hopes for America’s communities.” But he said, “I have concluded that I cannot ask to be considered for service in the next four years.”

Cisneros told reporters at HUD that he had personally informed the president, who is traveling in Asia, and “he understood the decision I have made.” Cisneros will stay on until Clinton is inaugurated in January, a HUD spokesman said.

White House press secretary Mike McCurry responded that “the president thanks Secretary Cisneros for the outstanding work he’s done at HUD and for being a good friend.”

Many believe the 49-year-old Texan turned the ugly duckling of federal bureaucracies, saddled with 1.4 million units of public housing, into a laboratory of reinvented government.

During his tenure at HUD, Cisneros presided over the demolition of thousands of decaying apartments in high-rise buildings. He worked on new programs to build better low-income housing and sought to “unleash market forces,” as he put it, by giving rent vouchers to public housing tenants.

The debonair former San Antonio mayor managed repeatedly to turn back Republican demands to disband his department and reached agreement with GOP leaders for his reforms in public housing programs. He presided over three rounds of budget cutting that shrank the HUD budget by 20 percent - from $25 billion a year to $20 billion.

A private investment adviser after serving as San Antonio’s mayor, Cisneros had earned as much as $300,000 annually before taking the Cabinet post with a salary of $148,400.

Beginning last year, legal bills mounted as a court-appointed independent counsel investigated whether he lied to FBI agents in 1992 about payments to a former mistress, Linda Medlar.

Cisneros had publicly acknowledged his affair with Medlar, an aide when he was mayor, and that he had been paying her support for some time after their relationship ended in late 1989. But apparently out of concern that his nomination could be harmed if he acknowledged the full extent of his payments - reported to be $150,000 to $200,000 - Cisneros greatly understated the figure to FBI agents who were assigned to check his credentials.

Secret tape recordings made by Medlar revealed the discrepancy, and Attorney General Janet Reno sought appointment of an independent counsel to determine if Cisneros’ statements constituted perjury. That investigation still is ongoing although Cisneros has denied any wrongdoing.