Time - Man of the Year/Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso/moy/032392/0323106.000

Text File | 1992-08-28 | 6KB | 114 lines

                                                                                NATION, Page 30

CONGRESS

Nobody Here but Us Chickens


Who kited checks at the House bank? Almost everybody, egg-faced
lawmakers admit, and they vote to tell all.

By DAVID ELLIS -- Reported by Nancy Traver/Washington


    If an ordinary citizen wrote a bad check, he could pay a
penalty of up to $25 or face interest on the overdraft amount.
Not so for the members of the U.S. House of Representatives who
collectively kited at least 20,000 checks worth $10.8 million
at their members-only bank over a three-year period. When the
scandal broke last October, congressional leaders tried to shrug
it off as a minor administrative snafu and closed the bank. But
public outrage over abuse of privilege continued to mount,
fueled by allegations of dope dealing at the House Post Office,
unpaid bills at the exclusive members' dining room and
extravagant junketeering at taxpayer expense.

    Terrified at the prospect of facing an angry electorate in
November amid charges of a cover-up, Democrats and Republicans
alike voted last week to come clean. The identities of all 355
check floaters will not be made public until next month, but the
24 most flagrant offenders will be outed next week. According
to the the House ethics committee, these members "repeatedly
and routinely" abused the overdraft privilege by writing checks
that exceeded the amount of their next month's salary at least
eight times within the 39-month period under investigation. One
member kited 996 checks totaling $251,000 during that time, a
rate of about one a day; another legislator issued 743 bad
checks for $595,000 worth of goods and services.

    Among the offenders is the man who was responsible for
running the bank: House sergeant-at-arms Jack Russ. The
46-year-old Mississippian, who had personally floated checks
totaling $56,100, resigned under pressure last week. The move
followed news reports suggesting that Russ, who claimed to have
been wounded in a mugging on March 1, may actually have shot
himself in the cheek in order to deflect criticism over his
handling of the bank during his nine years on the job. Russ, who
denies the rumors, ignored repeated warnings from the General
Accounting Office that the check-writing perk needed reform.

    Once it became clear that all names would be divulged, the
hallways of Congress were jammed with lawmakers reciting fervent
mea culpas to TV crews in hopes of lancing the boil before they
were officially exposed. Charles Hatcher, a Georgia Democrat,
apologized for writing 780 bad checks. California Republican
Duncan Hunter confessed to constituents that he had overdrawn
his account at least 160 times. By week's end, more than 75
members of Congress had fessed up to using the privilege, but
some of the most chronic abusers remained silent. Even the
leadership has not been spared embarrassment: Speaker Tom Foley
kited a $540 check for stereo equipment, and House minority whip
Newt Gingrich wrote bad checks at least three times.

    Some of the guilty sought refuge in technicalities. They
pointed out that the defunct facility was not really a bank but
a disbursement center where members were given accounts that did
not bear interest. Each account was credited monthly with the
individual member's net salary, generally $7,000 after
deductions. Because overdrafts were covered by the money on
deposit from congressional colleagues, it was argued, no public
funds were involved. Sloppy record keeping prevented some from
knowing that they were in arrears. "We've been double-crossed
and done real dirty by this bank," complained Pete Kostmayer,
a California Democrat who admitted to writing 19 bum checks
during the period.

    But Foley and his fellow Democratic leaders badly
misjudged popular outrage over the cozy banking arrangements --
particularly during a recession, when making ends meet is so
difficult for ordinary people. Opinion polls indicated that the
public could not understand how Congressmen making $125,100 a
year had so much difficulty balancing their checkbooks.
Republicans seized on the issue, knowing that public contempt
for Congress would be especially damaging to the Democrats, who
enjoy a 102-seat majority in the House. Maverick G.O.P.
presidential candidate Pat Buchanan, for example, began blasting
"those check-kiting boodling Congressmen" and called for
appointment of a special prosecutor.

    Fearing his party would pay disproportionately at the
polls in November, Foley had foolishly tried to control the
damage by releasing only the names of the worst offenders. But
the very "fairness" doctrine he invoked was undermined by the
complicated rules drawn up by the ethics committee, under which
the names of many habitual check abusers would have remained
secret. "We should have come clean right away. Instead, we
fought to protect people whose transgressions were not as bad,"
says an aide to one top Democrat. "Now the Republicans look like
good guys, and we're accused of a cover-up."

    Congressional leaders concede that many of the more
flagrant abusers may be voted out of office because of the
scandal. In the meantime, Foley seems to be doing his best to
ensure that Russ avoids paying a higher price for his failure.
The Speaker has promised Russ that he can stay on for three
months, probably as a "consultant." That is the amount of time
he needs to become eligible for his pension.