TIME: Almanac 1995

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<text id=89TT1480> <title> June 05, 1989: How Many Will Fall? </title> <history> TIME--The Weekly Newsmagazine--1989 Profiles June 05, 1989 People Power:Beijing-Moscow </history> <article> <source>Time Magazine</source> <hdr> NATION, Page 34 How Many Will Fall? </hdr> <body> As Jim Wright topples, the ethics purge takes down Tony Coelho too, and only Tom Foley seems safe in the succession struggle By Margaret Carlson For Jim Wright, the outcome was predictable, but the collapse of yet another Democratic leader was sudden and unexpected. Barely had Wright's lawyer, Stephen Susman, begun his opening statement to the House ethics committee last week, pleading that even a dead man deserves due process, when all parties seemed to be looking for a way out of the spectacle of a Speaker of the House of Representatives going on trial. Getting Wright to walk the plank--with dignity, if possible, but above all with speed--seemed to be Congress's best hope of restoring its tattered reputation. When the Speaker and his wife Betty left town for a Memorial Day vacation in an undisclosed location, where Wright was expected to prepare a departure-with-dignity speech, Democrats quickly began speculating openly about his successor, no longer so squeamish about reading the will before the funeral. Current majority leader Tom Foley's anticipated move to Speaker would satisfy the Democrats' need for an ethically pure successor. Squeaky clean and conciliatory, Foley could be to the Democrats what Jerry Ford was to the Republicans after Richard Nixon: a healing, avuncular presence and a guarantee that the congressional leadership would cease to be a staple on the nightly news. Despite some scurrilous efforts to spread rumors about him, Foley seems a shoo-in. "Only the Angel Gabriel could beat him," said one Congressman. But the same could not be said of whip Tony Coelho, who had hoped to bump up a notch to majority leader. The Justice Department is reportedly in the preliminary stages of a criminal investigation of Coelho's investment in a $100,000 junk bond sold by indicted inside trader Michael Milken's firm, Drexel Burnham Lambert. Late Friday, after Common Cause asked the ethics committee to determine whether the bond deal was a favor, Coelho could see what lay ahead. He announced that he was quitting his leadership post immediately and resigning from Congress on June 15, his 47th birthday. "I don't intend to put my party through more turmoil," he told the New York Times. That cleared the way for Richard Gephardt, who has already passed professional, financial and sexual scrutiny as a candidate for President, to run for majority leader. Gephardt had been lying low until Coelho dropped out--he and Coelho have a noncompete clause in their friendship contract--so late Friday he was scrambling to get members' home phone numbers to campaign over the weekend. Georgia's Ed Jenkins, an ally of powerful Chicago Congressman Dan Rostenkowski, is another likely candidate. Former Budget Chairman Bill Gray, Arkansas' Beryl Anthony and Michigan's David Bonior will probably fight it out for Coelho's majority-whip slot. The buzz of succession talk was interrupted only for periodic "when will he go" bulletins on Wright. From the moment the klieg lights came on in the ethics committee hearing room on Tuesday morning, Democrats realized they had been living in a state of denial about the scandal. By nightfall negotiators for Wright and the committee were sounding each other out about a deal: Wright's resignation in exchange for the committee's agreement to drop some of the charges against him. By week's end it was clear that Wright was a goner, with no guarantee of clemency. It wasn't so much that House Democrats decided Wright was guiltier on Tuesday than he was on Monday, as that they were afraid daytime TV watchers would conclude Wright was simply the hapless guy who got caught and the rest of the bums were just as bad. Soon folks who didn't know a thing about book deals and condominiums would be getting daily reminders of the low standards Congress sets for itself. At the same time, Wright could see that his long-desired day in court was not going to be the cathartic experience he had hoped for. The ethics committee's counsel, Richard Phelan, was not going to come across as the meanspirited persecutor that Wright's lawyers had made him out to be. Ethics chairman Julian Dixon and his colleagues seemed determined to use the televised hearings to shake their reputation for letting the big ones get away. Nor did Wright relish the specter of his wife being cross-examined on the charge he was most determined to have dropped: that the salary, car and condo she received through a partnership with Fort Worth businessman George Mallick were illegal gifts. Already Betty, whose tastes run to things only money can buy, had become the lightning rod for those looking to explain Wright's troubles. The stir she caused just by entering the hearing room on Tuesday in a bright aquamarine suit--kissing Susman once and then kissing him again for the cameras--boded ill for her ability to play the role of hardworking financial adviser scripted by Wright's lawyers. In the wake of all this, Foley, whose staid wife works as his unpaid administrative assistant and frequently wears running shoes and pantsuits to the office, looks like the Democrats' savior. But the Democrats' good fortune in Foley was all but neutralized by Coelho, third in command. In 1986 Coelho was catapulted to majority whip in gratitude for his astonishing success in extracting large sums from conservative businessmen by convincing them that Democrats could help them as much as Republicans. Tirelessly, he made new friends for the party. He turned up at a Drexel-sponsored conference in 1988, just weeks prior to Milken's taking shelter behind the Fifth Amendment before a House subcommittee. "I am here tonight to show my respect...for Michael Milken," he said. "He is constantly thinking about what can be done to make this a better world." Coelho takes credit for such fund-raising innovations as the Speaker's Club: for $5,000 a person or $15,000 a political-action committee, donors can become "trusted, informal advisers to the Democratic members of Congress." Besides luggage tags and theater tickets, this entitles the club member to at least an audience with his representative. Coelho entertained big spenders lavishly on High Spirits, a 112-ft. yacht owned by Don Dixon, head of Texas' now bankrupt Vernon Savings and Loan. When federal regulators began investigating Dixon's flagrant spending, Coelho's committee reimbursed Vernon with a $48,451 check for the use of the yacht. By far the biggest problem facing Coelho is the junk-bond killing he made in 1986. He later admitted that a friend of Milken's, Beverly Hills banker Thomas Spiegel, had bought one of the oversubscribed bonds for him because he didn't have the cash to purchase it. The bonds were such hot items on the offering date that many of Drexel's regular clients couldn't get hold of one. By the time Coelho paid for the bond (in part with a loan of $50,000 from Spiegel that Coelho failed to disclose as required), it had gone up in value $4,000, and that money may amount to an impermissible gift. The transaction is also under scrutiny by the Securities and Exchange Commission. Coelho's defense is essentially "My accountant made me do it." But that, he concluded by week's end, wasn't going to fly. Simply getting rid of a few powerful members is not going to remove the stench that hangs over Capitol Hill. Last year alone, members of Congress collected $10 million in extra income: $2,000 here for playing golf, $2,000 there for watching a slide show about the needs of the offshore drilling industry, $2,000 for some after-dinner remarks. Last January Congress admitted that all this money from special interests is a form of legalized corruption and offered to give it up in exchange for a 51% salary increase, to $135,000. Though some raise was merited--particularly for federal judges and bureaucrats, whose pay scale is tied to that of Congress--this seemed a little like Willie Sutton saying, "I'd stop robbing banks if you could see your way clear to unlock the vault." Polls show that the public is fed up with the best Congress money can buy. Maybe the willingness to admit that what Wright and Coelho did is wrong means the members are finally beginning to feel the same way. -- Nancy Traver/Washington </body> </article> </text>