WASHINGTON -- Rep. Dan Rostenkowski has rejected a proposed plea agreement that would allow him to avert a broad criminal indictment on federal corruption charges, lawyers in the case said yesterday.
His lawyers, who are still urging him to accept the agreement, have told federal prosecutors of the decision but asked them not to consider it final until the government's deadline Tuesday.
The lawyers hope that he might change his mind over the weekend, but said that there was no reason to think he might do so.
If the Chicago congressman is indicted, it would remove one of President Clinton's most powerful allies in the fight for health care reform. Mr. Rostenkowski chairs the House Ways and Means Committee, one of five key panels considering the president's health proposal.
Federal prosecutors have said that they were prepared to wait through the holiday weekend for the Illinois Democrat to reconsider. But they repeated their warning that if he does not accept their terms by early Tuesday they will ask a federal grand jury to indict him that day on more than a dozen corruption charges.
The charges include taking thousands of dollars in cash payments from the House post office disguised as stamp purchases, converting a government-leased vehicle to his personal use, putting people on his office payroll who did no work and using his congressional expense account to buy chairs and other personal gifts from the House stationery shop.
If he were convicted on a combination of any of the counts against him, Mr. Rostenkowski could face fines and prison time far in excess of the penalties he would face under the plea-bargain agreement.
And he would face enormous personal costs. Under House rules, an indictment would force him to step down from his chairmanship of the Ways and Means Committee, removing his most potent lure to raise money for a legal defense fund.
His legal fees could run as high as $1,000 an hour for the team led by Robert S. Bennett, whose own hourly rates are estimated at $450.
Mr. Rostenkowski already has paid more than $800,000 in fees for himself and staff members who have been caught up in the investigation. That money came from his political funds, and he is believed to have at least that much remaining to pay additional fees.
But a trial could take years, and that money could be exhausted quickly.
The investigation of Mr. Rostenkowski began as an embezzlement case in 1991 involving low-level employees whom federal prosecutors accused of taking small amounts of money from the House post office.
The inquiry steadily grew through the chain of command at the post office until July 1993, when Robert V. Rota, the former House postmaster, pleaded guilty to misdemeanor embezzlement charges and implicated Mr. Rostenkowski in a scheme to steal cash from the mailing office.
Yesterday, both sides held out a slight possibility that an agreement might yet be worked out. But people who have followed the negotiations said that the effort had soured and that there was little expectation that a settlement could be reached.
With no plans for further talks, there was a sense that both sides had exhausted their negotiating strategies.
There was no sign that the congressman's lawyers were seeking better terms, nor was there any evidence that prosecutors were considering any further concessions.
Under their proposal, Mr. Rostenkowski would admit that he had committed a crime, give up his committee chairmanship, serve a six-month prison term and pay a fine.
A trial would represent an enormous gamble.
The case would probably be tried by Judge Norma H. Johnson of U.S. District Court, who has presided over the post office case and is known as a tough sentencing judge.
Federal sentencing guidelines would mean that if Mr. Rostenkowski were convicted of a felony or multiple felonies, he would almost certainly face a long prison term without the possibility of parole -- although he could appeal to President Clinton for a pardon.
The indictment is likely to allege that Mr. Rostenkowski in effect stole $21,000 by exchanging stamps issued to his office for cash. Former Postmaster Rota, who pleaded guilty to corruption charges last summer, is expected to testify against Mr. Rostenkowski.
Mr. Rostenkowski's lawyers believe that they will be able to undermine the credibility of Mr. Rota's testimony. However, prosecutors have three other witnesses who might be able to bolster that testimony.
One consideration weighing on Mr. Rostenkowski, according to one of his lawyers, is the possible criminality of staff members who have worked for him for years in Chicago.
Federal prosecutors have used the threat of going after some staff members as part of their leverage in trying to reach a plea-bargain agreement. Several staff members have been called to testify before the federal grand jury.