Does U.S. Atty. Jay Stephens, after more than a year of examining dozens of witnesses and hundreds of pages of records, have the evidence to indict Rep. Dan Rostenkowski?
Stephens took a low-level drug case involving workers at the House Post Office and expanded it to a major inquiry that includes possible charges of fraud, theft and tax violations.
In the last few weeks, the case has taken on even greater significance because President Clinton is counting heavily on the veteran Illinois Democrat to steer his economic plan through the House Ways and Means Committee.
How important is Rostenkowski to Clinton? “Very important. Very important. Very important,” said the normally reserved Budget Director Leon Panetta. Pausing for effect, he added: “Very important.”
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Rostenkowski is important because he maintains tight control over his tax-writing committee. As much as any committee chairman, Panetta said, Rostenkowski can deliver his members.
If indicted, Rostenkowski would be required by House Democrat rules to step down from his committee chairmanship until the matter is resolved. The Chicago congressman has conceded that the investigation has been a constant distraction, and colleagues on the committee say the inquiry weighs heavily on him.
Under normal circumstances, Clinton would be likely to replace Stephens, a Republican, rather quickly. But any decision the president makes will be read in a larger political context.
Jimmy Carter was sharply criticized in his first year for dismissing David Marston, a Republican U.S. attorney in Pennsylvania, after taking a phone call from a Democratic congressman whom Marston was investigating. Like Stephens, Marston had been accused by many Democrats of conducting politically motivated prosecutions.
During her confirmation hearings, Atty. Gen. Janet Reno was asked if she would attempt to find out the status of the Rostenkowski investigation for the White House. Reno insisted she would not.
But Reno or one of her senior deputies would be likely to take a role in approving an indictment, according to lawyers familiar with Justice Department procedures on such sensitive cases.
Although several details of the investigation have been reported, Stephens has said little about the case since Rostenkowski’s lawyers accused him in court of leaking information to the media in violation of grand jury secrecy rules, a contention rejected by a federal judge.
The investigation has been unusually lengthy for what at first appeared to be a straightforward case. But it concentrates on one of the most subtle and difficult subjects for prosecutors to pin down: Whether public money was converted to personal use.
Financial records cases can be painstakingly slow, and even those critical of Stephens concede he would not rush to bring charges against such a high-profile figure.
Rostenkowski is responsible for some of the delay because he has fielded a large legal team for himself and many of the 20 current and former aides subpoenaed by the grand jury.
This much is known. Prosecutors have information that stamps from the House Post Office were exchanged for cash. What is not publicly known is where the money went. To charge Rostenkowski with a criminal offense, the money must be traced to his own pocket.
Prosecutors have requested records from the 32nd Ward organization in Chicago, Rostenkowski’s congressional campaign committee, his congressional office account and other documents linked to his personal finances. They have called some two dozen of Rostenkowski’s current and former aides before the grand jury.
Some lawyers who have detailed knowledge of the case believe Stephens will seek an indictment. To them the issue is simply when.
At the same time, doubters abound. “It sounds like a fairly slim reed they have been on,” said one well-known defense lawyer.
For every argument made about the case, there is a counterargument and each is plausible. But Rostenkowski finds his chairmanship and his national stature marred by the investigation.
“They have done a clean sweep on me,” Rostenkowski, 65, said in a recent interview. “I may wind up very well charged with not having any licenses for my dogs.”
Asked if he denies any wrongdoing, Rostenkowski answered firmly: “Yes, that’s what I have been saying all the time.”
The investigation flows from allegations that Rostenkowski may have enriched himself by obtaining cash from the House Post Office under the guise of buying stamps.
From 1986 to 1992, Rostenkowski’s office purchased more than $68,000 in stamps, often in unusually large amounts considering that members of Congress can send their official mail with the so-called franking privilege.
In 1991 Rostenkowski’s franked mail cost taxpayers $167,000.
Rostenkowski said his office did not keep track of the volume of his mailings and has no lists or receipts to account for the large stamp expenditures. But he said that his committee generates an exceptional volume of mail because it has jurisdiction over issues such as taxes and Social Security.
Former postal employees have told investigators that stamp vouchers were exchanged for cash. So far, however, no evidence tracing where the money went has become public.
Rostenkowski said none of his personal financial records have been subpoenaed, but acknowledges that prosecutors could get them from financial institutions or the Internal Revenue Service without his knowledge.
Despite his consistent claims that members of Congress are underpaid, Rostenkowski, who has outlasted eight presidents and survived 18 elections, has assets worth at least $2.2 million.
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Such wealth is possible given his congressional salary, which now is $133,600. But it would require frugal spending for his family of six, making near the maximum in allowable outside income for speeches when that was permitted and an exceptional return on investments.
Rostenkowski also draws political money, from five funds from the federal to the ward level. He maintains a state political action committee with the same name as his federal political action committee that corporations have used to circumvent federal contribution limits. Federal election law prohibits the use of a state fund to directly affect a federal election.
The grand jury reportedly is also looking into alleged improprieties in the way Rostenkowski handled lease payments on cars and office space in his Northwest Side district, but the congressman has said the payments didn’t involve anything improper.