Rep. Daniel J. Flood (D-Pa.), the influential and colorful chairman of a key House Appropriations subcommittee, was indicted by a federal grand jury in Los Angeles yesterday on charges of lying about payoffs he allegedly received.
The three-count perjury indictment is the first formal charge to come out of a wide-ranging Justice Department investigation of Flood. The inquiry gained momentum early this year after Stephen B. Elko, Flood's former top aide, was convicted of bribery and started cooperating with prosecutors. He is reported to have told investigators that Flood took more than $100,000 in return for political favors.
Investigations of those charges are continuing in several cities. For instance, a New York rabbi pleaded guilty in May to bribing Flood to gain federal aid, and is believed to be cooperating with investigators.
Yesterday's indictment grew out of testimony Flood gave to a federal grand jury and at Elko's trial last year in Los Angeles.
The 74-year-old congressman is charged specifically with lying to the grand jury in June 1977 when he denied receiving $5,000 cash from William Fred Peters, a former trade school operator, and when he denied taking $1,000 in cash from Daryl Fleming, a former Washington lobbyist.
Flood is also charged with lying at Elko's trial last October when he said he didn't know Peters had paid Elko $5,000. All the payoffs allegedly took place in 1972, and this apparently could not support separate bribery charges because of the five-year statute of limitations.
Each count is punishable by five years in prison and a $10,000 fine.
Flood denied the charges yesterday in a statement from his home in Wikes-Barre. "I am certain that these charges will be proven false, charges made by desperate men under pressure."
Now campaigning for his 16th term in the House, Flood said, "I do not intend for one minute to relent from the responsibilities of my office.
"I do not intend for one minute to falter in my endeavor . . . a campaign that I am certain will result in my overwhelming victory at the polls."
Flood has won 70 percent of the vote in recent elections and the affection of his constituents continued during a barrage of headlined accusations earlier this year. During the midst of the publicity in March, for example, a sell-out crowd turned out when the local Lions Club named him "Man of the Year."
As chairman of the House Appropriations subcommittee on labor and health, education and welfare> which oversees some $75 billion in spending a year, he has directed millions of dollars in federal projects into his district over the years.
It was Flood's alleged dealings with principals of a chain of now-defunct West Coast trade schools that led to yesterday's indictment.
It seems clear now that Flood was a target of prosecutors ever since the trade school scheme began to unravel more than three years ago, as first Peters and then Fleming and Elko were "turned" to become government witnesses.
In August 1975, when he was arrested on a passport violation, Peters offered to implicate a member of Congress in return for immunity. Prosecutor refused and he was convicted in 1976 of bribing Eiko in exchange for help in getting his schools accredited so they would be eligible for federal aid.
Elko's troubles began in late 1975 when Senate investigators subpoenaed him for a paralled inquiry. In April 1976 he testified before a grand jury after being briefed by attorney John J. (Roy) Ingoldsby, a close friend of Flood's. Elko later was convicted of perjury in that appearance.
Elko resigned from Flood's staff in June 1976 and Ingoldsby later arranged to pay for his legal fees. Elko was indicted in June 1977, shortly after both Peters and Fleming became government witnesses.
Elko, in turn, began cooperating only after he was convicted of bribery last fall.
It was during questioning of Elko in December and January that Justice Department prosecutor John Dowd in Washington first learned of the possible involvement of Flood and Rep. Joshua Eilberg, another Pennsylvania Democrat, in some allegedly questionable dealings over federal financing of a Philadelphia hospital.
That case became a national issue when Republican U.S. Attorney David W. Marston charged that he was being fired during his investigation of the two Democrats' involvement in the hospital deal.
Both Attorney General Griffin B. Bell and President Carter were battered by the ensuing controversy, though it now seems clear that it was Dowd, rather than Martson, who first heard evidence of possible misdeeds by the congressmen in the hospital case.
A grand jury in Philadelphia has been hearing evidence in that matter. Assistant U.S. Attorney David Hinden directed the investigation leading to yesterday's perjury indictment.
Dowd has been coordinating the investigation from Washington, including a separate grand jury probe of alleged payoffs to Elko and Flood by Dr. Murdock Head, founder of the nonprofit Airlie Foundation of Warrenton, Va.
Another spin-off of the Flood investigation led to the guilty plea last May by New York Rabbi Leib Pinter, who said he paid Flood about $1,000 on at least five occasions between late 1974 and 1976 in exchange for help in obtaining federal grants for his jobs program for the elderly.
Flood is due to be arraigned in Los Angeles on Monday.