Bombshell in The House

By GEORGE J. CHURCH

The surprise was not in the tone of the document: it had been widely tipped to be "devastating," and it was. The charges for the most part had also been well rehearsed. Nonetheless, when the House ethics committee at last released its report on Speaker Jim Wright, the findings of the ten-month investigation still qualified as a bombshell. Bad enough were the accumulated allegations of venality: details of Betty Wright's alleged no-show job, accounts of the Speaker's staff shamelessly peddling his book, the description of a wildly lucrative -- and suspicious -- oil-well deal that few had known about before. More important, and more ominous for Wright, was the fact that all six Democrats on the committee joined the six Republicans in finding "reason to believe" that the Speaker had violated House ethics rules by failing to avoid "even the appearance of impropriety."

That unanimity crippled efforts by Wright and his allies to portray the report as a partisan Republican attempt to smear a powerful political opponent, and it tilted the odds against the Speaker. Only a few weeks ago, Wright had seemed likely to hold on to his job. Now close observers of Congress, such as lobbyists and Democratic powers outside the legislative chamber, think the best he can expect is to retain the speakership until late in the year, before being pushed into resignation. House Republican Whip Newt Gingrich, who first called for the Wright investigation, went even further, predicting that Wright would become such an embarrassment for the Democrats that Majority Leader Tom Foley of Washington "will be Speaker by June."

Wright, to be sure, would have none of that. On occasion during the week he looked haggard, and he told reporters wryly, "I believe I have had easier times." But he made himself conspicuous, bustling about the halls of Congress and on at least two occasions visiting the White House, most of the time wearing a defiant grin; like many politicians, he can smile on cue, whatever his inner feelings. He emerged from a closed meeting of the Democratic Caucus to report, "I told them I intend to fight and I intend to win." He renewed a demand that the ethics committee call a hearing at which he could state his case publicly (Wright and attorney William Oldaker have already appeared before the committee in private).

Wright is not without ammunition for this battle, though his defense is in part technical and legalistic. Having found "reason to believe" that House rules were violated, the congressional equivalent of an indictment, the ethics committee must now judge whether there is "clear and convincing evidence" of the violations. In a couple of cases, the situation remains murky. One question, for example, is whether Fort Worth businessman George Mallick, who showered gifts on Wright and his wife, had a "direct interest" in legislation. If he did not, then Wright's acceptance of the gifts was no violation of House rules.

Committee counsel Richard Phelan insisted that Mallick did have such an interest, if only because his extensive oil and real estate holdings made him much more vulnerable to any change in tax laws than the ordinary American. But Mallick does not meet three standard tests of direct interest: he is not a lobbyist, he employs no lobbyists, and he does not have a political-action committee. By the standard of interest that the ethics committee seems to be applying to Mallick, says one member of Congress, "I couldn't talk to my own mother. She's 65, and on Social Security."

The Speaker also sought to make some headway by concentrating his defense not on himself but on his wife Betty. The committee charged that Betty was paid $18,000 a year by Mallick for doing no work. Wright indignantly defended his wife's integrity and insisted she did work as an investment adviser; he produced a list of proposed investments she had supposedly looked into for Mallick. Mallick seems never to have acted on any, but Betty explained to the Washington Post that her advice frequently had been not to buy. To the New York Times she complained that "they are making me a Nancy Reagan . . . I am being accused of changing ((Wright's)) life not for the better but for the worse."

Attorney Oldaker concedes that there is no written proof that Betty ever did anything: no memos written by or to her, no memos written by others in which she is mentioned, no indication that she worked in Mallick's offices more than five to seven days a month. Even so, Wright's defense may win the sympathy of many of the 300-odd members of Congress whose wives or husbands also hold paid jobs. They are not at all eager to set a precedent that might encourage future investigators to ask exactly what it is their spouses do and what interest in legislation the spouses' bosses may have.

Wright may have more trouble defending himself against charges relating to bulk sales of his nonbook Reflections of a Public Man (it consists mainly of speech excerpts slapped together by an aide). On the surface, at least, the sales look like a blatant attempt to slide around House limits on members' outside income; honorariums for speeches are restricted, but book royalties are not. In several cases Wright's staff members pointed out that the Speaker was near his limit on honorariums and suggested that organizations buy books instead of paying him directly. Wright refused to answer any questions about the book last week; if he or Oldaker has a plausible explanation, neither has come forward with it.

Moreover, the case against Wright may still be building. The committee last week dispatched two investigators to Texas to look further into an oil-well sale involving Wright. The story: Mallick and the Wrights were fifty-fifty partners in an investment company called Mallightco, but in 1987 Wright instructed the trustee of his blind trust to sell out. Mallick told the committee that he wanted to "bet the farm" on one more deal before the pullout.

Mallightco bought a 4% interest in an oil-and-gas well known as Sabine Lake Prospect for $9,120. On the very day the purchase became final -- May 10, 1988 -- Mallightco resold the interest to Union Rheinische Petroleum Inc., a West German company, for $440,000. The well at the time showed some prospect of becoming a commercial producer but has since been plugged. Wright's trustee then sold the Speaker's interest in Mallightco for $350,000, less $80,000 to pay off debts to the firm -- a handsome profit from a hopeless dry hole. Wright insists he knew nothing about the well deal, but the ethics committee wants to probe deeper -- especially because the sale of the well was in part arranged by Morris Jaffe and his son Doug, two Texans who are trying to sell a $3 billion training-aircraft system to the Pentagon.

So far, most Congressmen detect no great excitement among their constituents about the Wright investigation. But the longer the affair drags on, and the more heavily the press and television focus on eventual public hearings, the more likely voters are to pay unfavorable attention. "This is no ten-kiloton violation," says Ted Van Dyk, a noted Washington political consultant. "But it's hard to convince the folks at home after Meese, Tower, Hart et al."

The betting now among relatively impartial experts is that the full House will eventually vote on some kind of sanction against Wright. They also expect the ballot will be very close. If that is the case, whether Wright wins or loses becomes almost irrelevant; either way, his effectiveness as Speaker would be undermined. Like Ed Meese, he would probably hang on to his job for a while for appearances' sake, then quietly resign (no one expects him to leave the House). The Speaker still has time to turn that glum scenario around, but he will have to mount a more convincing defense than any he has been able to produce to date.

With reporting by Hays Gorey/Washington