THE DEMOCRATS who control the House of Representatives continue to be embarrassed by their colleague Fernand St Germain. They have elected him chairman of the Banking Committee and have authorized him to play a key role on one of the most sensitive issues before Congress, the savings and loan bill. Yet evidence is accumulating that Chairman St Germain has failed to meet basic ethical standards.

The latest evidence is the charge by Wall Street Journal reporter Brooks Jackson that the Justice Department is conducting a criminal investigation that savings and loan lobbyist James O. Freeman paid sizable entertainment bills for Mr. St Germain and, according to an unnamed source, that Mr. St Germain paid for a meal with Mr. Freeman's credit card when the lobbyist wasn't there. On the basis of these charges Rep. Newt Gingrich (R-Ga.) argued that the ethics committee should reopen the investigation of Mr. St Germain it concluded in April. Ethics Chairman Julian Dixon disagreed, and Mr. Gingrich's motion was beaten 292 to 111.

The committee would have been wiser to take the case. Mr. Dixon argued, on the one hand, that charges made in just one newspaper article by unnamed sources weren't substantial enough to require investigation. On the other hand, he said the committee shouldn't investigate if the Justice Department is making a criminal investigation and "I have reason to believe, based on independent information as chairman of the committee, that there is a criminal investigation going on." But why should a criminal investigation prevent the ethics committee from looking for violations of House rules, any more than the independent counsel's investigation prevented the Iran-contra committee from holding hearings?

In the short run the House protected itself against the unpleasant prospect of an investigation of a powerful member. But in the long run, it left itself -- and particularly its Democratic majority, which elected Mr. St Germain chairman -- vulnerable to the charge of failing to keep a close enough eye on a member accused of violations directly relevant to his legislative duties.

The ethics committee earlier this year tiptoed through the St. Germain case, finding violations of House rules not serious enough to require punishment, deploring the fact that Mr. St Germain's top assistant called a federal regulator to inquire about a case in which the chairman had a personal interest but declining to draw the inference that Mr. St Germain authorized the calls. Now it won't even tiptoe. All but one House Democrat voted against an investigation now. But if it turns out that their chairman accepted favors from a savings and loan lobbyist while writing a multibillion-dollar bill bailing out savings and loans, many House Democrats may face some uncomfortable questions from their constituents in 198