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    Paying The Piper With Contributors' Cash

    By Dwight L. Morris
    January 21, 1997

    Just how is House Speaker Newt Gingrich going to pay that $300,000 fine? The House ethics committee has formally recommended that Gingrich be penalized for illegally using donations from tax-exempt organizations to fund a patently political college course and then lying to the panel about his actions. Where will the money come from? For Gingrich, the solution appears to be one or two more nights of rubber chicken.

    Almost before the committee had finished outlining its case against him, Gingrich's spokeswoman, Lauren Maddox, announced that there was precedent for paying the fine with campaign funds (she quickly pointed out that no firm decision had yet been made on the payment). Redefining chutzpah, the speaker appeared ready to pay for his ethical lapses with money collected from the people controlling the tax-exempt foundations that funded his course in the first place.

    Although Democrats both on and off the ethics committee immediately began crying foul, few seem to have noticed that the speaker's plan has already been in effect for two years. Since Jan. 1, 1995, Gingrich has spent $690,998 of his campaign funds to cover legal bills associated with the ethics case, nearly all of which was rung up by Jan W. Baran of Wiley, Rein & Fielding before he quit amidst suggestions that Gingrich lied to him.

    Gingrich knew he was on solid ground in paying for his legal expenses with campaign funds; he had done so before. During the 1990 election cycle, Gingrich, then minority whip, spent $136,967 to battle an ethics complaint accusing him of improperly forming a partnership financed by political supporters to promote a book he co-wrote. Chalking those allegations up to political payback for leading the charge to oust Speaker Jim Wright (D-Texas), the ethics committee dismissed the charges.

    In fact, no one questioned Gingrich's latest diversion of campaign funds to his legal defense simply because it has become commonplace. The speaker is the latest in a growing series of indicted or ethically challenged House incumbents who have paid their lawyers from funds donated to help them win re-election.

    Rep. Dan Rostenkowski (D-Ill.)
    When former Rep. Dan Rostenkowski was indicted on 17 counts including embezzling public and campaign funds, mail and wire fraud, conspiracy and obstruction of justice, he didn't tap personal funds or take out bank loans to pay his legal bills. Instead, Rostenkowski dipped into his campaign treasury, diverting more than $1.3 million to his legal defense. That money paid not only for his own lawyers but also for the lawyers retained by key staffers questioned by federal investigators. Attorneys skimmed off 47 percent of the money Rostenkowski spent during the 1994 election cycle.

    While federal law prohibits members of Congress from using campaign funds in ways that are purely for personal benefit – and federal prosecutors were busy proving that Rostenkowski had done just that – no one seemed bothered that he paid Katten, Muchin, Zavis & Dombroff nearly $179,000 in less than three years, hoping that the Washington, D.C. law firm could keep him out of jail. In 1992 – when federal prosecutors began exploring his embezzlement of campaign funds, his use of federal employees to perform personal tasks, and his habit of tapping his taxpayer-funded House office account to pay for expensive gifts – he paid another Washington firm, Brand & Lowell, nearly $172,000. Two other law firms collected at least $100,000 from Rostenkowski's campaign during this period, while four others received payments totaling at least $50,000.

    Rostenkowski's campaign treasury also paid more than $106,000 to cover the legal bills of Virginia Fletcher, an administrative assistant who handled bookkeeping in his Washington congressional office. More than $62,000 went to cover the legal bills incurred by the bookkeeper for the district office in Chicago, and more than $51,000 paid lawyers representing an old political crony, whose wife was paid $79,000 for congressional work that other staffers said she never performed.

    Rep. Joseph McDade (R-Pa.)
    Following his indictment in May 1992 on federal bribery charges, Pennsylvania Republican Joseph McDade began siphoning off campaign money to pay his lawyers. Acquitted in 1996, McDade ultimately devoted more than $300,000 of his campaign funds to his defense.

    Rep. Nicholas Mavroules (D-Mass.)
    Indicted by a federal grand jury in August 1992 on 17 counts of racketeering , bribery, and income tax evasion, then-Rep. Nicholas Mavroules (D-Mass.) spent more than $78,000 of his campaign funds to cover a portion of his attorney fees. Following his November defeat, Mavroules was convicted and sentenced to 15 months in prison. That same year, when then-Rep. Albert G. Bustamante (D-Texas) was indicted and convicted on federal bribery and racketeering charges, his lawyers collected more than $46,000 from his campaign.

    Rep. Harold E. Ford (D-Tenn.)
    Like Gingrich, former Rep. Harold E. Ford (D-Tenn.) maintained that his 1987 indictment on charges of bank, mail and tax fraud was politically motivated. Between Jan. 1, 1987 – the first year for which we have data – and his acquittal in 1993, Ford spent more than $480,000 of his campaign funds to pay his lawyers. He also raised several hundred thousand dollars through a separate legal defense fund.

    Rep. Barney Frank (D-Mass.)
    During the 1990 election cycle, Rep. Barney Frank (D-Mass.) spent more than $143,000 of his campaign funds battling ethics allegations relating to his relationship with a male prostitute, Steve Gobie, who claimed he had operated a sex-for-hire business out of Frank's apartment. In 1990, the House voted 408 to 18 to reprimand Frank for misusing his office by, among other things, intervening to fix a number of Gobie's parking tickets.

    As is often the case with modern campaign finance, the real crime is what's perfectly legal.

    This article originally appeared on the PoliticsNow Web site.

    © Copyright 1998 The Washington Post Company

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