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    Money Talks

    Take and Switch

    By Dwight L. Morris
    April 15, 1996

    Originally charged in a 17-count indictment with embezzling public and campaign funds, mail and wire fraud, conspiracy, and obstruction of justice, former House Ways and Means Committee chairman Dan Rostenkowski officially joined the ranks of convicted white collar felons this week when he plead guilty to two counts of mail fraud. While most people faced with such a lengthy list of charges would have been buried under the mountain of legal bills he racked up during his nearly four-year fight with federal prosecutors, Rostenkowski found a far less painful way to pay his attorneys.

    In 1992 – when prosecutors first began exploring his embezzlement of campaign funds, his penchant for letting taxpayers pick up the tab for expensive gifts he routinely doled out to friends and his use of government employees to perform such personal tasks as photographing his daughter's wedding and mowing his lawn – Rostenkowski dipped into his campaign treasury for $156,953 to help defray the cost of his legal problems. Between January 1, 1993 and December 31, 1994, Rostenkowski diverted a staggering $1,162,582 from his campaign treasury to his defense, paying not only his own legal bills but also those incurred by senior staff members questioned by federal investigators. Attorneys collected 47 percent of the $2,491,329 Rostenkowski spent ostensibly to defend his seat during the 1994 election cycle.

    Though federal law prohibits members of Congress from using campaign funds in ways that are purely for personal benefit – and federal prosecutors were busy building a case that Rostenkowski had done just that – no one seemed to mind that between 1992 and the end of 1994 he paid Katten, Muchin, Zavis, & Dombroff $178,785 in the hope that the Washington, D.C. law firm could keep him out of jail. Nor did any of the Justice Department's legal beagles object when, during that same period, he tapped his campaign treasury to pay another Washington law firm, Brand & Lowell, $171,869. Renowned Washington defense attorney Kenneth Mundy, who helped Mayor Marion Barry avoid conviction in 1990 on charges that he used crack cocaine, collected $100,000 from the campaign in 1993. Rounding out Rostenkowski's legal "$100,000 Club" was Squire, Sanders & Dempsey, which received $168,653 of the money donated to help Rostenkowski win reelection in 1994. Four other firms received checks from the campaign totaling at least $50,000. It's hard to imagine a more personal use of campaign funds.

    When Virginia Fletcher, an administrative assistant who handled the bookkeeping duties for the Washington congressional office, was quizzed by federal prosecutors concerning her knowledge of the congressman's alleged financial misdeeds, Rostenkowski opted to have the campaign pay her $106,058 legal bill. He continued the precedent, covering $62,112 in attorneys fees incurred by Nancy A. Panzke, an executive assistant who kept the books for the district office in Chicago. Terry Gabinski, a long-time political ally who had put several of Rostenkowski's relatives on the city of Chicago's payroll, collected $51,105 from the campaign to cover the cost of retaining counsel when questions arose concerning the nature of the work performed for Rostenkowski by Gabinski's wife, Celeste. Celeste Gabinski, who was paid $79,000 for Congressional work that some of Rostenkowski's other employees claimed she never did, received $4,991 from the campaign to cover the cost of legal advice required when she was cited for contempt of court and forced to testify before the federal grand jury.

    Not even his defeat in 1994 could completely shut off the spigot. Forbidden by law to pocket the $200,255 that remained in his treasury at the end of the campaign, Rostenkowski did not hesitate to divert $145,042 to his defense during the first six months of 1995. Sadly, he is not the lone member in this particular rogues gallery.

    Indicted in May 1992 on federal bribery charges, Rep. Joseph McDade (R-Pa.) tapped his campaign treasury that year to cover $97,217 in legal fees associated with his defense. During the next two years, McDade siphoned another $100,000 out of his campaign bank account to pay his legal team. Still under indictment, still in office, and apparently unconcerned that the Justice Department might look with disfavor upon this use of campaign funds, McDade dipped into his treasury for $104,760 to cover 1995 bills submitted by Foley, Cognetti and Comerford, the Scranton law firm that is handling his defense.

    Then-Rep. Nicholas Mavroules (D-Mass.) was indicted by a federal grand jury in August 1992 on 17 counts of racketeering, bribery, and income tax evasion. He spent $78,148 of his campaign treasury to cover a portion of his attorney fees. Following his November loss to Republican Peter G. Torkildsen, Mavroules was convicted and given a 15-month prison sentence. That same year, when then-Rep. Albert G. Bustamante (D-Texas) was indicted and convicted on federal bribery and racketeering charges, the attorneys handling the case collected $46,380 from his campaign.

    Under the cloud of FBI and Internal Revenue Service investigations into allegations that he illegally diverted more than $400,000 from a company he owned to help pay for his initial House campaign in 1992, Rep. Jay Kim (R-Calif.) spent $51,755 of his campaign funds on legal advice in 1993 and 1994. With the investigations still unresolved and several major Korean corporations pleading guilty to charges that they illegally contributed to Kim's 1992 campaign, Kim paid four law firms a total of $46,460 during 1995.

    Anxious to portray themselves as reformers, Republican freshmen are currently pushing for a vote on some sort of campaign finance reform bill. If they are serious about reform, the freshmen might want to consider prohibiting incumbents from tapping into their campaign treasuries (and in essence, misusing their fund-raising power) to defray the cost of criminal and ethical investigations.

    This article originally appeared on the ElectionLine Web site.

    © Copyright 1998 The Washington Post Company

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