The chairman of American Invsco, the giant nationwide condominium converter, yesterday avoided a contempt of Congress citation by agreeing to surrender part of the records sought in a sweeping investigation of conversion practices.
A House subcommittee had voted Monday to cite Invsco chairman Nicholas Gouletas for contempt, but Gouletas reluctantly agreed to a last-minute compromise yesterday and avoided similar action by a full House committee.
The agreement resolved -- at least temporarily -- a fierce battle between Gouletas and Rep. Benjamin Rosenthal's (D-N.Y.) subcommittee over Gouletas's refusal to turn over subpoenaed records that his company contends are confidential.
However, committee chairman Jack Brooks (D-Tex.) raised the possibility of a future contempt citation if lawyers for the company do not hand over part of the records to Rosenthal's staff by Dec. 16, as they promised to do yesterday.
"The U.S. Congress will be bak in session [in January] and this committee will be back in session," Brooks asserted, "and those records better already have been in the subcommittee's hands for a month."
With that, Brooks adjourned the committee session, leaving both sides to claim victory from a compromise reached through behind-the-scenes wrangling that was not resolved until after the committee began meeting.
Invsco has agreed to supply the subcommittee with records on the prices it has paid for dozens of apartment buildings throughout the country and the prices it got for selling them as condominiums. But under the compromise the company may withhold figures on its conversion costs, such as rehabilitation and marketing of the buildings.
Rosenthal has been seeking the records in an investigation of the growing conversion trend, which he says is displacing low- and moderate-income tenants, causing speculative buying that may fuel inflation and using huge chunks of the scarce pool of mortgage money available to home buyers. He selected Invsco's conversion of the Promenade Apartments in Bethesda to cooperatoves as a case study after protests by tenants of the building received wide attention last summer.
As the committee session adjourned yesterday, Invsco lawyer Thomas Quinn boasted that "there has been no concession" on the company's part. "What [the subcommittee] is being given are buying price and selling price, all public information."
But subcommittee counsel Peter Barash said that such information is not available publicly, and Rosenthal said that he was "ecstatic" with the outcome of the proceedings.
"The material they will furnish and the information we are gathering will more than adequately fill our needs to present a full picture," Rosenthal said.
The battle over the records had turned into a struggle between Rosenthal and Gouletas, with the company chairman mounting a fierce lobbying campaign to keep the records out of the subcommittee's hands. The battle had included calls from influential politicians, visits from high-powered lawyers and expensive newspaper advertizements in New York City, Chicago and Washington.
Despite the lobbying effort, the subcommittee voted 5-to-3 on Monday to cite Gouletas for contempt. That citation had to be ratified by the full Government Operations Committee and the House before moving to federal court, where a guilty finding would have carried heavy fines and a term in jail.
The compromise yesterday was worked out in a frantic series of conversations in a conference room behind the giant committee meeting room. The compromise had been offerred by Rep. Elliott H. Levitas (D-Ga.), and agreed to early yesterday by Rosenthal. But when the committee took up the issue chairman Brooks said he wanted an assurance from Invsco that it would go along, according to sources familiar with the negotiations.
First, Invsco lawyers and then Brooks himself spoke to Gouletas by phone, but Gouletas at first refused to go along, the sources said. Brooks stormed out of the room, telling the attorneys that if Gouletas would not agree, the committee "would have to do something else," these sources said. Moments later, Gouletas agreed to the turn over part of the disputed records.