Dealmaker's

By GEORGE J. CHURCH

He seemed to have made a difficult transition from cog in the legendary Chicago Democratic machine to politician of the '90s. Not the blow-dried telegenic kind; burly, raspy-voiced Dan Rostenkowski remained a backroom dealmaker to the bitter end. He won vast respect as the Congressman who could + massage the tough bills -- tax reform, maybe health care -- into literally passable form. But, says Chicago political columnist Steve Neal, "he was caught in a sort of time warp," and he is under investigation for allegedly taking perks that were common in the Chicago wards of the 1950s, and even in Congress when he arrived there 35 years ago, but are now forbidden. And even though he angrily insists he is innocent, the session of the tax-writing Ways and Means Committee held last Thursday could easily be the last that Rostenkowski presides over as chairman.

Over the holiday weekend, Rostenkowski mulled a dismal choice. He could take a deal offered by U.S. Attorney Eric Holder: plead guilty to at least one felony count, and probably accept a short prison term. Or he could let himself be indicted on 10 to 15 counts, charging fraudulent use of his office expense accounts for personal gain, and face trial. He might then escape prison altogether -- or draw a sentence as long as three to four years for each count on which he might be convicted.

Either way, Rostenkowski would have to give up the Ways and Means chairmanship. That would be part of any plea bargain, and if he is indicted, it would be required by the rules of the House Democratic Caucus. Technically, if he is tried and acquitted, he could resume the chairmanship some years down the road. It seems likely, though, that Rostenkowski will resign even as an ordinary member of Congress, whether he cops a plea or has to start preparing, at the age of 66, for an almost certainly long and exhausting trial.

Fellow House Democrats are so sure of the departure of Rosty (everybody calls him either that or Danny) that they have already settled on his successor. The new chairman will be Florida Democrat Sam Gibbons, 74, an affable and experienced veteran of 31 years on Ways and Means but hardly Rosty's equal as a coalition builder or horse trader. Though Gibbons insists he is a leader, he concedes he has not steeped himself in the arcana of taxation to the extent Rostenkowski has; Gibbons' primary interest has been trade. Some Democrats talked of choosing a younger and more dynamic chairman for Ways and Means, but the move collapsed after Gibbons invoked the nearly sacred rules of seniority.

Commentators have judged Rosty's downfall to be possibly fatal for the health-reform plan. That seems exaggerated: Rostenkowski acknowledged that any final law would resemble whatever bill emerges from the Senate Finance . Committee more closely than the one Ways and Means is shaping. Still, Rosty's presence will be missed. His wheeling and dealing might have been as sorely needed to pass Clinton's future legislation as it was last year to get the President's deficit-reduction plan enacted.

Oddly, just as he was reaching a peak of power, Rostenkowski ran afoul of an investigation that started with postage stamps. One charge against him is that he took $21,000 from the House post office over two years by trading expense vouchers for cash instead of stamps, or for stamps later exchanged for cash. The investigation broadened to include accusations that Rostenkowski used campaign funds to rent a vacant office in a building he owned, put "ghost" employees on his payroll, and acquired ownership of cars he supposedly rented with expense money.

Some colleagues think the charges sound wildly out of character for Rostenkowski, who regularly submits some of the most meticulously detailed expense reports prepared by any Congress member. Certainly he had no need for the relatively piddling sums said to be involved. His power over taxes made lobbyists eager to curry his favor, and he gladly -- and legally -- let them pick up the tab for steak dinners at Morton's in Washington and golf games all over the world. Reports put his holdings of stocks, real estate and other assets at anywhere between $700,000 and $2.3 million. Longtime political observers note, though, that urban-machine politicians -- and at least some members of Congress -- long regarded the paying of ghost employees and "cashing out" of stamp funds as routine prerogatives of office.

Rostenkowski was born into the machine culture; his father Joe was a Chicago alderman and ward boss. After a brief fling at playing minor-league baseball, Dan served in the Illinois legislature before going to Congress in 1959. His wife LaVerne stayed in Chicago, so Rostenkowski commuted home on weekends. But for years he would stop first at city hall to brief Mayor Richard J. Daley on his doings.

Rosty became chairman of Ways and Means in 1981. His tenure opened with a stinging defeat: the committee opted for Ronald Reagan's tax cuts over Rosty's opposition. But the chairman recovered to steer the landmark tax reform of 1986 past all sorts of shoals and obstacles to enactment. He has handled his colleagues adroitly, knowing just when to trade a tax break narrowly benefiting a particular committee member's constituents in return for the * member's vote on a more important matter.

John Sherman, a former aide, remembers once phoning the recuperating chairman after an appendectomy, only to have Rosty answer by rumbling, "What do you want?" He was so steeped in the culture of trading one favor for another that he had trouble believing Sherman had called merely to ask how he felt. Sherman quickly adds, however, another aspect of Rosty's mastery: "In dealing with the committee members, he had a code he never broke. It included giving political cover to every member, Republican or Democrat, in fending off requests of lobbyists or contributors." A member was always free to reply to an unreasonable request by saying, "I'd love to help you, but the chairman says no." All in all, Rosty was well on his way to being remembered the way he wished, as the lawmaker who got the big things done. It would be a bitter irony if his downfall began with something so small as postage stamps.

With reporting by Laurence I. Barrett and Julie Johnson/Washington and Jon D. Hull/Chicago