Congress: Life Among the Ruins
In the wake of the House Bank scandal, the bad news got worse-and real work came to a halt
Paper trail. At the House post office, the easy-money mentality may have invited even more. Members and staff can buy stamps at five branches in Capitol office buildings, but the operation--under contract from the U.S. Postal Service--also cashes checks of all kinds. A confidential postal inspector's audit shows systemic disregard for record keeping, substantial cash shortages and loose management that allowed check cashing to become a main business at some branches. Of 169 checks inspectors found in post-office tills last summer, 161 "bore no indication of the accepting employee," 126 did not "indicate the date of acceptance" and nine were insufficiently endorsed. More than half were personal checks. Such lapses erased any paper trail, enabling clerks to hold checks, effectively giving the check writers floats.
Now, investigators are probing another possible scam, this time involving the vouchers congressional offices use to purchase stamps for "official" purposes. It centers on these possible abuses: whether members or staffers received cash instead of stamps for the vouchers and whether members bought stamps with campaign funds and later cashed in the stamps for their personal use. So far, authorities have discovered that postal clerks often destroyed vouchers, making it impossible to tell how many cash exchanges occurred--and with whom. Several knowledgeable sources told U.S. News that post-office employees routinely shifted money in and out of tills to cover telltale losses during audits, which were always announced ahead of time. Possible criminal violations include misappropriation of funds, embezzlement and obstruction of justice.
Turf battle? On another front, the federal grand jury investigating the post office is now examining a claim of possible coverup. Frank A. Kerrigan, former chief of the Capitol Police, says that on behalf of House Democratic leaders, staffers--including House counsel Steve Ross and Heather Foley, an unpaid administrative assistant and wife of the speaker--tried to quash an early post-office investigation. Both firmly deny the charges. Kerrigan has given the grand jury a tape he secretly recorded of a meeting with Ross in which there was disagreement over who should conduct the probe. The grand jury may find that this was a turf battle between the speaker's office and former Sergeant-at-Arms Jack Russ--who ran the bank and the Capitol Police. Their relationship was frequently strained, and Russ resigned two weeks ago. So, last week, did Postmaster Robert ("Can't-Say-No") Rota. "He always bent over backwards to be helpful to members," says House Administration Committee Chairman Charlie Rose. "This time he fell over."
Critics say the six-member House task force now investigating the post office is itself open to conflicts of interest. Democrat Mary Rose Oakar, for instance, is on the task force even though she heads a subcommittee responsible for the entire postal operation. Democrat Rose, another task-force member, has also helped place at least a dozen workers on the postal payroll, according to sources. "It's like asking the rabbits to guard the lettuce," complains one Democrat. The task force is to report by May 30.
Answers may be just as hard to come by at the now-defunct bank. One line of inquiry centers on whether rubber checks helped some members pay last-minute election expenses. Republican ethics-committee member Fred Grandy says panel members worried about several cases of unusually heavy activity in members' accounts around election time. Wilson of Texas, for example, admits to writing a $10,000 check to his campaign on Dec. 21, 1990, that became an overdraft when the bank held a deposit check for the same amount for 40 days.
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