Check-kiting spurs House to close bank Ethics inquiry to consider cases of repeat offenders

October 04, 1991|By Peter Osterlund | Peter Osterlund,Washington Bureau of The Sun

WASHINGTON -- The House of Representatives, attempting to conclude an embarrassing chapter in its history, ordered the closure of the House bank yesterday in the wake of revelations that it had covered thousands of bad checks written by lawmakers.

"No member of Congress should enjoy any privilege . . . that's not available to any other citizen," said House Speaker Thomas S. Foley, D-Wash.

Lawmakers voted 390-8 to close the private bank and to order the House ethics committee to investigate cases of members who "routinely and repeatedly" bounced checks there, for possible punitive action.

The vote came a day after a separate embarrassing disclosure -- that about 300 current and former House members failed to pay more than $300,000 in bills incurred at the chamber's food facilities.

Reports of the check-kiting and the unpaid food bills brought protestations of innocence from most lawmakers yesterday -- including every member of the Maryland delegation. All said they had neither bounced a check nor stiffed the House restaurant, and all of them voted to close the bank.

The revelations also brought public contrition from some members who came forward to confess to signing a rubber check or two.

Yet they provoked indignation from a few lawmakers who considered nothing as scandalous as the furor over the scandal.

"This is an appalling waste of the media's desperate resources," harrumphed Representative Barney Frank, D-Mass., who simply stated that "all accounts are clear" when asked if he had been in arrears at the bank or the restaurant. "There are real issues to be written about."

Yesterday, however, those issues appeared far from the collective mind of the House. Instead, members dickered over whether to release the names of check-bouncing miscreants and over how to quell the uproar over last month's General Accounting Office report that during a 12-month period, members had written 8,331 checks on accounts with insufficient funds -- without incurring interest or penalty.

Last week, Mr. Foley ordered an end to check-cashing privileges at the bank, rejecting calls for the bank's closure. But subsequent revelations of unpaid restaurant bills of more than $300,000 unleashed a new round of finger-pointing.

"It seems to us that at this juncture it would be a better decision, and one that we are taking, for members to utilize either some existing local depository . . . or a bank of their choosing in their home districts," Mr. Foley said.

Meanwhile, leadership officials noted that the ethics committee would focus on 134 members who had written 581 bad checks exceeding $1,000 each. And they sought to quell a brewing controversy over the House restaurant, promising to collect outstanding balances and noting that the facility has instituted strict, pay-as-you-go rules.

For some lawmakers, all this was not enough. "It's time to expose the check-writing scandal I call Rubbergate," said Representative Jim Nussle, R-Iowa, one of a group of freshman Republicans demanding the release of the list of check-bouncers. Added Representative John A. Boehner, R-Ohio: "Let the public know those members who have betrayed the public trust."

That did not appear to be in the offing. House leaders instead stressed that the House bank had never run a deficit and that members' banking privileges had not taken a dime from the U.S. Treasury. "These deposits are deposits of members' salary earned and their property," said Mr. Foley.

In fact, the House bank is not a bank in any conventional sense, performing instead many of the functions of a corporate payroll office. Unlike a typical disbursing department, however, the House bank deposits members' payroll checks in non-interest-bearing accounts -- and long ago instituted an informal practice of clearing members' checks and, in cases of insufficient balances, covering checks and sending notices of overdrafts.

Often, the bank has cleared bad checks and, without notifying the member, counted it against the next pay. That caused considerable embarrassment among members who claimed they had never bounced a check -- only to find that they had.

That group included Mr. Foley, whose office had denied that he bounced a check lately, only to find out that, indeed, he had -- on Dec. 27, 1990. The check was for $540, used to purchase a receiver and a compact disc player.

Evidently, the bank held the check for 24 hours until a deposit was received. "It was, by the way, to a Spokane, Wash., hi-fi store," Mr. Foley said. "They probably didn't miss it."

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