Ethics Cases Lost in Shadow of ‘Keating Five’

Elwood Broad, an unemployed former congressional aide, says that for six years he was forced to pay $700-a-month kickbacks from his government paycheck to Rep. Gus Yatron (D-Pa.) in order to retain his job as Yatron’s administrative assistant.

Whenever Broad questioned the propriety of this arrangement, he recalls, Yatron advised him, “Don’t worry, you’ll never go to jail. If anyone finds out, they’ll go after me. I’m the one that’s taking the risk.”

So, when Broad went public not long ago with his startling accusations of congressional chicanery, he expected it to generate big national headlines that would embarrass Yatron in Washington and across the nation.

But to his surprise, these allegations have received surprisingly little attention outside of Allentown, Pa., and nearby Reading, Pa., where Broad and Yatron live. Although newspapers in those cities have written extensively about it, even many of Yatron’s colleagues in Congress are unaware of the case.

Ironically, although the well-known “Keating Five” scandal has stimulated a full-blown national debate over congressional ethics, the Senate’s longstanding, high-profile investigation of the Keating case appears to have drawn attention away from many other allegations of congressional misdeeds that have surfaced in recent months.

Among the other cases that have been relatively overlooked:

--Sen. Mark O. Hatfield (R-Ore.), whose ethical judgment has come under fire in the past, has been accused of accepting almost $36,000 in previously unreported gifts and a scholarship for his son, Charles, from the University of South Carolina--at a time when the school was seeking his assistance in winning a federal grant.

--Glen N. Mauldin, once a top aide to former Sen. Chic Hecht (R-Nev.), has been indicted in Texas on charges that he illegally conspired to accept a 10% interest in a chain of savings and loan institutions in exchange for using his Senate position to lobby the Federal Home Loan Bank Board on behalf of the group.

--And Rep. Tom Lantos (D-San Mateo) is under investigation by the Federal Election Commission for allegedly funneling campaign contributions into New Hampshire last year in an effort to help elect his son-in-law, Dick Swett, a freshman Democrat, to Congress.

These and other ethics cases have been piling up in Congress while the Senate Ethics Committee continues to weigh the fate of Sen. Alan Cranston (D-Calif.), who has been accused of violating his office by intervening on behalf of Lincoln Savings & Loan in exchange for contributions from thrift owner Charles H. Keating Jr.

The Keating case has been under investigation since November, 1989, and although the committee has recently dismissed charges against the four other senators, a final decision on Cranston’s case is being delayed because one panel member recently resigned after suffering a serious heart attack.

Unlike the Keating Five scandal, however, most of the new ethics cases are not centered on the much-criticized system of financing political campaigns with special-interest contributions. Instead, they are based on allegations of a more fundamental type of wrongdoing--the use of public office for personal gain. As such, they are strikingly similar to the charges that drove House Speaker Jim Wright (D-Tex.) and House Majority Leader Tony Coelho (D-Merced) from office two years ago.

“Personal enrichment is the oldest type of political scandal, even though there have been new forms of it in recent years,” says political scientist Larry Sabato.

Still, it is highly unusual for a modern member of Congress to be accused of defrauding the taxpayers by collecting kickbacks on federal salaries paid to one of his staff members, as Yatron has. The last member of Congress to be found guilty of such charges is Rep. Charles Diggs (D-Mich.), who went to prison over the case in 1978.

Yatron insists that Broad’s story about kickbacks and other misdeeds is a fabrication. He charges that Broad is nothing more than a disgruntled ex-employee who is conducting an unusually public vendetta because the congressman refused to support his bid for federal disability payments after he retired with a heart condition at the age of 42.

Broad, who was employed from 1984 until 1990 as administrative assistant for the congressman in his district office, charges that he not only paid monthly kickbacks, but also yielded to Yatron’s instructions to spend campaign funds on such items as lottery tickets and astrology books for the Yatrons and expensive gifts for their children.

Likewise, Maureen Jalbert, Broad’s sister, said she received a federal paycheck from Yatron in 1989 and 1990 for doing laundry and light housekeeping at the congressman’s home in Reading. And Broad also says he received frequent expense checks from the U. S. Treasury to reimburse him for driving Yatron’s wife to visit her daughter in New Rochelle, N. Y.

In a wide-ranging interview, Broad proffered numerous allegations about his former boss, who, he said, used congressional office telephones for campaign fund raising, mailed political materials with government-purchased stamps and even drove back to Pennsylvania on weekends with trunks full of stationery supplies from his House office.

When Yatron held a polka party in Reading to raise money for his 1990 reelection campaign, according to Broad, the congressman simply pocketed $1,300 from the cash box at the end of the evening, and the money never found its way into his campaign treasury.

By the time that Broad sought to retire on disability a year ago, he says, Yatron’s profligate spending of campaign funds had created a $13,000 deficit. Yatron forced him to make up the deficit from his own money, he contends, and the congressman threatened to deny him any federal disability payments if he failed to do so.

But Yatron later refused to recommend Broad for a disability pension, even though his former employee had paid $13,000 into the congressman’s campaign treasury to make up the shortfall. Yatron contends that it was Broad who misspent the campaign funds, and therefore he was solely responsible for it.

“Although one does not agree to make restitution unless one is criminally responsible,” Yatron said in a statement shortly after the matter came to light, “at the time I decided not to prosecute out of compassion for Mr. Broad because he had agreed to make restitution, had resigned his position and claimed to be in poor health.”

Broad, now unemployed and unable to find another job in Reading, has recently declared personal bankruptcy and is suing Yatron for return of the $13,000 and the alleged kickbacks paid to the congressman. He has requested a House Ethics Committee probe, and says he was interviewed twice by FBI agents, who appear to be investigating the matter.

The FBI, the Senate Ethics Committee and a federal grand jury are known to be looking into the case of Hatfield, who--like Yatron--is being accused of using his office for personal gain. No matter what comes of these cases, the allegations may have already tarnished the reputation of a senator whose reputation for integrity once earned him the nickname “St. Mark.”

Hatfield himself seems to be genuinely surprised by the furor over the gifts he has received from people seeking influence, but he acknowledges that it has created “an appearance problem” for him. In response, he recently adopted a new policy against accepting gifts from people other than family members or close friends.

The primary allegation against Hatfield is that during the mid-1980s, he accepted free airline travel and gifts, including a piece of Steuben glass, an Audubon print and a porcelain statue, from James B. Holderman, then president of the University of South Carolina. Hatfield’s son also received a scholarship valued at $15,000.

Holderman resigned from the university last year under criticism for his lavish spending, and has since pleaded no contest to tax evasion and guilty to using his office for private gain. He has agreed to cooperate in the federal probe of Hatfield.

Not only did Hatfield fail to report the gifts from Holderman, as required by Senate rules, but he also allegedly used his influence as a ranking member of the Senate Appropriations Committee to win the university a $16.3-million federal grant.

At the same time, Hatfield and his wife, Antoinette, are alleged to have borrowed large sums of money from former Rep. John R. Dellenback, an Oregon Republican, and the late Charles E. Cook, a California industrialist--both of whom had interest in legislation before the Senate. A portion of the loans was later forgiven.

In this respect, the Hatfield case is similar to the allegations against Wright and Coelho, both of whom were accused of accepting unusually favorable investment opportunities from men who had an interest in particular legislation.

Despite Hatfield’s upstanding reputation, this is not the first time the Oregon senator has gotten into trouble as a result of his personal financial transactions. In the early 1980s, he was forced to defend a $55,000 payment that his wife received for interior decorating services from Basil A. Tsakos, a Greek entrepreneur, who received some assistance from the senator in advocating a trans-African oil pipeline.

Under current circumstances, the grand jury investigation of Hatfield’s case is likely to be concluded long before the Senate Ethics Committee deals with the matter. Not only has the Senate panel failed to finish its work on the Keating Five case, but it has yet to tackle longstanding allegations that Sen. Alfonse M. D’Amato (R-N.Y.) may have abused his office by intervening with federal agencies on behalf of campaign contributors.

The case involving allegations that Hecht’s former aide, Mauldin, lobbied the Federal Home Loan Bank Board would have been another matter for the Senate Ethics Committee to tackle, had the Nevada Republican senator not been defeated in 1988. Neither the House nor the Senate ethics panels have jurisdiction over former members of Congress or their aides, even if their alleged misdeeds occurred while they were on the congressional payroll.

Nevertheless, a number of Senate employees have been subpoenaed to testify in the upcoming trial in San Antonio of Mauldin and two others.

Mauldin, who served as Hecht’s administrative assistant from 1983 to 1988, is accused of conspiring with the other two men to improperly use the influence of Hecht’s Senate office to acquire 10 government-held savings and loan institutions and to obtain federal funding to build an oil refinery in Grenada.

In exchange, Mauldin, who allegedly wrote letters on Hecht’s Senate stationery endorsing their business plans, was to have received a secret 10% share of the business.

Hecht, now U. S. ambassador to Bermuda, has not been implicated in the case.

Defense attorneys do not quarrel with the government’s contention that Mauldin may have discussed such a scheme with his alleged co-conspirators, but they say that government prosecutors will be hard-pressed to prove that their actions actually violated the law.

Like the Keating Five case, the Mauldin case appears to be another chapter in the tale of how some of the nation’s business and political leaders sought to capitalize on the remarkable boom and bust that occurred in the savings and loan industry during the 1980s.

While the charges against Lantos, the San Mateo congressman, also involve campaign contributions, they bear no relationship to the Keating scandal. Unlike the Keating Five, Lantos is under fire for the way he spent his campaign funds, not for the way he collected contributions.

In a complaint filed with the Federal Election Commission by Lantos’ three-time unsuccessful opponent, G. M. Quraishi of El Granada, the California congressman is accused of improperly funneling at least $30,000 of his own campaign funds into his son-in-law’s campaign. The congressman allegedly laundered the money by contributing it to the Democratic National Committee and directing that it be forwarded to the New Hampshire state party to be spent on Swett’s behalf.

In addition, Quraishi alleges that Lantos subsidized his son-in-law’s family income while Swett was running for Congress by paying his daughter, Katrina Lantos-Swett, nearly $26,000 for acting as treasurer of her father’s campaign in 1990.

Records show that Katrina Lantos-Swett served as treasurer of her father’s campaign without any pay for more than two years. She received her first payment, a $10,000 lump sum, from her father’s campaign funds in April, 1987, just a month before she bought a new home.

Swett has already been fined about $6,500 under New Hampshire law for exceeding the state’s campaign spending limit of $400,000. And Quraishi says he is in the process of requesting a House Ethics Committee investigation of the matter.

Lantos refuses to discuss the case, except to say that it is politically motivated and without merit. He says that Quraishi filed the case at the behest of former Rep. Chuck Douglas (R-N. H.), who was defeated by Swett.

“There is no basis for any single item in the complaint,” Lantos said. “I will not lose a moment’s sleep about it.”