These should be the fat days for Rostenkowski. The ward boss’s son from Chicago’s Northwest Side was at the pinnacle of power last week. For the first time in 12 years, he was writing tax policy for a Democratic president. He pushed Bill Clinton’s $246 billion package of proposed increases through his House Ways and Means Committee largely intact but in vintage Rosty fashion: behind closed doors and with breaks for selected industries sprinkled here and there. And the president was careful to pay tribute. On a visit to Chicago several days before the vote, Clinton joined Rostenkowski and Chicago Mayor Richard M. Daley for dinner at Myron and Phil’s, a favorite local joint of Rosty’s that offers massive steaks and the blunt political talk that he savors.
Yet the congressman’s moment is sullied by deep uncertainty. For the last year the U.S. attorney’s office in the District of Columbia has been investigating possible money laundering, fraud and obstruction of justice in Rostenkowski’s Washington and Chicago offices. Dozens of current and former staff members, friends and associates have been subpoenaed for grand jury testimony. Rosty’s supporters say he is the victim of an ambitious Republican prosecutor (Jay Stephens) who was hungry to spear a big-name Democrat before being replaced by the new administration. Stephens suggested that he was hustled out of office in March prematurely to keep him from wrapping up the probe. But last month Attorney General Janet Reno said she told Stephens’s interim successor, career prosecutor Ramsey Johnson, to move “full steam ahead” on the inquiry. Sources familiar with the case tell NEWSWEEK that Johnson’s recommendation on whether to seek an indictment could come as early as next month.
It’s also possible that Rostenkowski will remain in extended legal limbo. Under House Democratic rules, an indictment would require him to relinquish his Ways and Means chairmanship-at a time when Clinton desperately needs his help in securing congressional passage of economic and health-care initiatives. Reno could buy time by electing to review Johnson’s decision, or even postponing final action until Clinton names an assistant attorney general for the criminal division, which would have jurisdiction over the case. With the Senate Judiciary Committee backlogged by other pending appointments as well as an upcoming Supreme Court nomination, it’s possible a criminal-division head may not be in place before September.
Rostenkowski, who invoked the Fifth Amendment when subpoenaed by the grand jury last summer, declined an interview request. But his friends and colleagues say the waiting game has exacted a personal toll. Some depict the 65-year-old legislator as a brooding dinosaur, angered and confused by the legal assault. A proud product of the late Richard J. Daley’s political machine, where loyalty and respect for seniority are transcending values, he is appalled at the notion that his 40-year political career is in the hands of faceless federal prosecutors. “He’s trying like hell to block this out as much as he can,” says a close Chicago friend. “He’s been on their frying pan a long time. It’s a slow death.”
He’s even cut back on his one diversion–golf. Rostenkowski is rarely seen these days at his home course, Chicago’s Ridgemoor Country Club-although some say that has more to do with a heavy Washington workload than prosecutor-induced shyness. Others suggest that the essential narrowness of his life makes his predicament all the more oppressive. “He works, he goes to dinner, he eats 15-ounce steaks five nights a week. You wonder why the guy’s alive. That’s all he does,” says lawyer William Daley, son of the Chicago mayor who sent him to Congress in 1958, and a close friend. Others say they’ve seen a fiery self-assurance. One influential Illinois Democrat recalls: “He looked me right in the eye and said, ‘There is nothing to this and there will never be anything to it, because I didn’t do anything wrong’.”
Government prosecutors are working along three major tracks. One is an alleged attempt to convert campaign contributions and office expense vouchers to cash for personal use by buying more than $55,000 in stamps from the House Post Office from 1986 to 1992. Because members of Congress enjoy franking privileges, the transactions stood out to investigators like a red flag. Two other former House Democrats, Joe Kolter and Austin Murphy of Pennsylvania, and former House postmaster Robert Rota are also under investigation for alleged postal abuses.
Prosecutors are also following up disclosures in the Chicago Sun-Times last December that Rostenkowski has paid himself and family members $73,000 since 1986 to rent what he called campaign-office space from a building the family owns adjacent to his Chicago home. The newspaper charged that the space was little more than a mail drop. The government is also looking into a Sun-Times report that Rosty may have improperly spent $68,000 in taxpayer money to lease three vehicles from a suburban Chicago dealership that transferred ownership to the congressman. NEWSWEEK has also learned of a third element to the case: allegations that Rostenkowski encouraged underlings to take the fall for him and paid them off with salary increases of 30 to 50 percent.
A Rostenkowski spokesman told NEWSWEEK, without elaboration, that the stamp issue has been “totally explained” to the grand jury. He also insists that the car and office transactions are within House rules. Rostenkowski’s office says there’s been no attempt to obstruct the investigation by offering salary increases. While he has used more than $150,000 in campaign funds to pay legal fees for himself and staff, the spokesman says only one aide, longtime assistant Virginia Fletcher, recently received a major raise. He said Rostenkowski awarded Fletcher-who has appeared before the grand jury five times, according to published reports-a pay hike “in the double digit thousands” so that she would discontinue Tupperware-like dress sales get-togethers she operated from home. Allies say the allegations are flimsy and raise questions about the real strength of the government’s case. “The Feds found suspects in the World Trade Center bombing in a f–ing week, but they can’t indict this guy in a year?” asks a Ways and Means member.
Despite Rostenkowski’s private anguish, there’s little evidence that his legal difficulties have diminished his ability to keep the powerful 38-member committee in line. He delivered for the White House, stiffarming attempted Republican amendments to the tax package and landing all 24 Democratic votes on the committee. One former committee aide says cowed junior members still come to him for advice on how to handle the crusty chairman. “How many people have dinner with the president of the United States and come away with a deal?” he said. It could be the last major display of legislative muscle they see from Dan Rostenkowski. The burly chairman’s next challenge may not be on Capitol Hill, but at the Justice Department. And he won’t be calling the shots.
