
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 1, 1994                   TAG: 9406010088
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Boston Globe
DATELINE: WASHINGTON                                LENGTH: Medium

ROSTENKOWSKI INDICTED

Rep. Dan Rostenkowski, the committee chairman who has played a key role in much of the president's congressional agenda, was indicted Tuesday on charges of defrauding the government of more than $600,000 in sham transactions and then trying to obstruct an investigation of his office.

A federal grand jury returned a 17-count indictment against the Chicago Democrat, charging him with mail fraud, embezzling public funds and tampering with a witness. Rostenkowski, an influential deal maker as head of the important Ways and Means Committee, now must vacate the post while the case against him proceeds.

U.S. Attorney Eric Holder charged Tuesday that Rostenkowski had engaged in a ``very reprehensible, very offensive'' pattern of conduct over two decades. ``The allegations contained in today's indictment represent a betrayal of the public trust for personal gain.''

The indictments said Rostenkowski padded his payroll with workers who performed few or no official duties, used his office account to buy gifts for friends, obtained money improperly from the House Post Office and converted cars leased by the government to his personal use.

Rostenkowski, 66, has denied any wrongdoing. He was not in the capital Tuesday, but said Monday he would fight the charges because ``truth is on my side.''

President Clinton issued a statement saying Rostenkowski ``has the right to contest the charges made against him and to have his day in court.''

Clinton, who had been counting on Rostenkowski to shepherd his major health-care reforms through his committee and provide impetus for change, said Rostenkowski ``and others have helped create real momentum for health care reform, and I am confident that legislation will pass this year.''

Negotiations by lawyers for Rostenkowski and the government to reach a plea agreement in the case fell through over the Memorial Day weekend.

Holder said some members of Rostenkowski's staff were required to turn back money to his office manager in Chicago. ``Ghost'' employees allegedly endorsed their paychecks and gave them to the office manager, who would pay them some cash. The rest, containing ``several thousand dollars of public money,'' was kept in the manager's desk or file cabinet for later use. The 49 pages of indictments and particulars against Rostenkowski, some of which dated back 20 years in his 35-year House career, made these specific allegations:

Under House Democratic caucus rules, Rostenkowski now gives up his job as chairman of the tax-writing Ways and Means Committee until the criminal matter is resolved. If House Democrats stick with seniority, Rep. Sam Gibbons of Florida will inherit the task of trying to steer the panel through the thicket of health-care reform.

Gibbons, 74, was first elected in 1962 and has concentrated on trade matters during his years in the House. For the most part, he has stayed in the background on non-trade matters while Rostenkowski pushed legislation on unemployment benefits, welfare reform and Social Security, among other tax-related items.

The prospects for Clinton's health legislation already were shaky because of the complexity of the issue and the opposing special interests that stand to lose financially with any reorganization of the health insurance system.

But the indictment of Rostenkowski, a master at twisting arms into policy, dealt reform prospects another blow and complicates the effort even further.

``One reason the health bill has a chance to get through the House is because of his ability to count heads,'' said Rules Committee Chairman J. Joseph Moakley, D-Mass. ``He's one of the best negotiators we have."

by CNB