100 in House each put out 45 bad checks Ethics panel report says top abuser did so 996 times

March 12, 1992|By Tom Bowman | Tom Bowman,Washington Bureau

WASHINGTON -- One hundred House members bounced at least 45 checks at the House bank during the past three years, while another 133 lawmakers had five or fewer overdrafts, according to a House Ethics Committee report.

The top abuser of the bank wrote 996 bad checks between July 1, 1988, and Oct. 3, 1991. That amounts to about one bad check per business day for more than three years.

Even the official responsible for the bank, House Sergeant-at-Arms Jack Russ, bounced 19 checks drawn on other banks with a total value of $56,100. A teller at the House bank also cashed 28 bad checks at the bank worth $9,138.

The daily flow of overdrafts was so routine, the committee found, that one bank employee, Caroline Klemp, spent much of her time telephoning lawmakers about bounced checks. Ms. Klemp said yesterday that she would not discuss the bank's operations, which were characterized by the ethics committee as "haphazard" and "lax."

House members should have known after receiving calls from Ms.Klemp that bounced checks "were unacceptable even at this bank," the report said.

The eight members of the Maryland delegation all say they did not write any bad checks at the House bank.

All checks were eventually covered by the lawmakers and officials before the House bank closed in December, soon after the check-bouncing came to light in an audit report.

The ethics committee report found that the kiting had gone on far longer than the three years investigated by the committee.

For at least 40 years the House bank had a policy of honoring lawmakers' checks whether they had enough money in their accounts or not. Despite critical audit reports over the years -- including one in July 1991 -- no steps were taken to end the practice until news reports prompted a public outcry last fall.

"The management of the House bank was not professional," the committee report said. "Its recordkeeping was haphazard, its internal accounting controls were lax."

Mr. Russ, who is recovering from a gunshot wound to the mouth that he said he received during a mugging March 1, was unavailable for comment, and his office would not offer a response to the report.

Responsibility for the thousands of bounced checks must be shared, said the report, which recommended no disciplinary action.

The bank's management should have called for more professional operation, the report said, a House committee overseeing the bank should have exercised more oversight, and the House leadership should have intervened when the General Accounting Office, the investigative arm of Congress, began highlighting the problem in the mid-1950s. The GAO should have been more aggressive in pushing its concerns, the report said.

But the "major responsibility" should fall on those members who "month after month, year in and year out, wrote significant overdrafts on their House bank accounts," according to the ethics committee report.

No taxpayer money was lost on the House bank, which was a cooperative that accepted only paychecks. It did not pay interest, extend loans or mortgages, or issue credit cards. And it also did not charge fees for bounced checks, the report said.

The report did not specify how long some members were in arrears before their accounts were sufficient to cover the bounced checks. As a result, at least some of the overdrafts could be construed as no-interest loans.

House members, embarrassed and angry over the revelations, are now trying to determine how many names of check-bouncers should be released, a move many lawmakers say will be a political death sentence. A vote on the release of names is expected tomorrow.

The House Democratic leadership is backing the ethics committee recommendation to release the names of 24 lawmakers: 19 current members and five former members who were the most egregious offenders. The number of bounced checks for those members ranged from 81 to 996.

But House Republicans advocate further disclosure, with some members pressing for disclosure of all 355 who bounced at least one check, including 296 current and 59 former members. They were joined yesterday by President Bush, who said full disclosure was inevitable.

"There is no middle ground when it comes to revealing members of Congress who bounced checks at the House bank," said Rep. Jerry Lewis, R-Calif., chairman of the Republican Conference, who wants full disclosure.

Republicans on the House ethics committee are now backing the disclosure of all 355 check-kiters. They said releasing only 24 names would exclude check-bouncers with "significant numbers" of overdrafts, including one individual who wrote 850 bad checks totaling more than $150,000.

Members of the Maryland delegation are divided over how many names to release. Democratic Representatives Kweisi Mfume and Tom McMillen together with Maryland GOP members Helen Delich Bentley, Constance A. Morella and Wayne T. Gilchrest, favor full disclosure. Democratic Representatives Steny H. Hoyer and Benjamin L. Cardin are backing the release of the 24 names, while Beverly B. Byron is undecided.

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