The Trouble with Rosty

By John Greenwald

Molecules still shift whenever Dan Rostenkowski walks into a room. Everyone looks up and shrinks a little to make space for one of the most powerful lawmakers in Congress. But while the chairman of the House Ways and Means < Committee should be in his glory as he oversees the passage of President Clinton's tax bill, he is stuck beneath the darkest cloud of his career. The prospect that Rostenkowski may soon be indicted and stripped of his chairmanship has placed his ability to help Clinton in serious doubt. And the potential loss of Rostenkowski's deft political skills makes some Democrats fear that the rest of the President's legislative agenda could be in trouble. "We're worried about what happens down the road with health care, the North American Free Trade Agreement and all the other things we have to get through Ways and Means," a senior Administration official concedes.

The threat of prosecution grew more ominous for Rostenkowski last week, when a former House postmaster Robert Rota pleaded guilty to embezzlement and indicated that the 18-term Chicago Democrat had been involved. Rota said he had helped lawmakers illegally swap stamp vouchers for cash for nearly 20 years. While he named the most prominent offenders only as Congressman A and Congressman B, sources close to the prosecution identified Congressman A as Rostenkowski and Congressman B as former Pennsylvania Representative Joe Kolter, who was defeated last year. Rota indicated that Rostenkowski had used vouchers to embezzle $21,300 over a six-year period, but it remained unclear whether the money was used for office or personal use. Separately, federal investigators are still probing charges that Rostenkowski converted hundreds of thousands of dollars in campaign funds to his personal use, partly by cashing the checks at the post-office window. Asserted Rostenkowski at a Saturday press conference: "I have engaged in no illegal or unethical conduct. I'm frustrated and angry at these allegations."

The disclosures rattled Rostenkowski's colleagues and constituents. While the Ways and Means chairman often comes off as gruff and arrogant on camera, he is a Washington institution. "By golly, I've known the guy for more than 25 years," said House minority leader Robert Michel. "I can't believe he'd do any such thing -- it's just not like our Danny."

The lengthy probe has dampened Rostenkowski's spirits and raised the possibility that even if he is cleared, the 65-year-old Congressman will quit next year. "This has all been very difficult for him and his family," says Raymond McGrath, a close friend and former Congressman."They've subpoenaed his daughters, many of his friends and his secretaries in Chicago." When + people ask Rostenkowski how he's doing these days, he's likely to shoot back, "How the hell do you think I'm doing?"

The disclosures last week set up a race between a possible indictment of Rostenkowski and completion of the budget bill now before a 14-member House- Senate conference subcommittee. Sources close to the U.S. Attorney's office said an indictment could come in late August, after Congress adjourns for its summer recess.

The widening scandal only seemed to strengthen Rostenkowski's resolve to help push through the budget measure. "He will be around to finish up his chores," says Bill Frenzel, a former Republican member of the Ways and Means Committee who is now with the Brookings Institution. "He sees this conference as one of the most important jobs of his life, and that's the way he'll handle it."

That could help explain why the conferees seemed to be moving more swiftly toward a deal last week than the White House had anticipated. Braced by a speech in which Clinton declared, "We were elected to end gridlock," the lawmakers agreed to raise the tax rate on corporations from 34% to 35% and to put the lion's share of new personal taxes on households making more than $140,000 a year. But many issues remain unresolved. Among them: decisions on how much to boost the gasoline tax and how much to cut Medicare and other entitlement programs.

The real test for Clinton's legislative agenda will come if Rostenkowski is indicted and steps down. His chairmanship would then go to Sam Gibbons, a 73- year-old Florida Democrat who is lightly regarded by other members of the pivotal and fractious committee. If Gibbons does become chairman, true leadership of the committee could quietly pass to House majority leader Dick Gephardt and Speaker Tom Foley, who would work behind the scenes to crack heads and push the Clinton agenda. But neither Foley nor Gephardt nor Gibbons could be nearly as influential with Ways and Means members as the burly, steak-chomping chairman who has ruled the committee for 13 years.

With reporting by Margaret Carlson, Michael Duffy and Nancy Traver/Washington