House Postmaster Quits Amid Growing Scandal : Congress: Charges surface that the post office cashed checks for House members. Embezzlement and drug use allegations still face postal center.

WASHINGTON —  The House postmaster on Thursday became the second senior congressional official to resign within a week as new allegations of improprieties and possibly illegal activities involving congressmen spread through the scandal-plagued House of Representatives.

The resignation of House Postmaster Robert V. Rota, which followed that of Sergeant-at-Arms Jack Russ, coincided with allegations that the House post office may have allowed congressmen to cash checks in violation of federal regulations prohibiting postal facilities from using their funds for check-cashing operations.

Seeking to stop a wave of politically ruinous publicity, House Speaker Thomas S. Foley (D-Wash.) said Rota had been planning to retire for months and that his resignation was not connected to the ongoing investigation of mismanagement, cocaine use and now illegal check cashing at the House post office.

“I don’t think there is any connection with that at all. There’s been a plan for him to retire for . . . many, many months, going back long before the investigation began or even before there was any talk of an investigation,” Foley told reporters.

But Rep. Charlie Rose (D-N.C.), head of a House task force investigating the post office, confirmed that Rota’s policy of “bending over backwards” to accommodate members’ requests led to his downfall after 25 years of service.

“Mr. Rota was bending so far over backwards to do things for people that he fell over,” Rose said. “I’m not going to get into details, but clearly bad judgment was exhibited in many of the things he did.”

Rota, who handed in his resignation on his 57th birthday, supervised a Capitol Hill post office plagued by scandals involving embezzlement and cocaine use.

Three former House postal employees recently pleaded guilty to charges of embezzlement, while a fourth is awaiting trial on that charge as part of an ongoing investigation by the U.S. attorney’s office and the Postal Inspection Service. At least one employee also has told investigators of drug use and drug dealing at the facility.

Congressional sources confirmed a special task force from the House Administration Committee, which oversees the management of the House, is looking into the new allegations involving members’ use of the post office to cash checks and, in some instances, to obtain money by using checks to buy stamps that were subsequently resold and converted into cash.

One senior source said the allegations, which were first reported in Thursday’s edition of the Washington Times, are “only the tip of an iceberg of scandal” involving patronage, mismanagement and the abuse of congressional privileges in the House. When the rest of the iceberg becomes visible, he added, it is likely to create new waves of anti-incumbent sentiment among voters that could “prove to be just as ruinous politically” as the House banking scandal that has dominated news from Capitol Hill in recent days.

That scandal, which threatens to result in dozens of House members being voted out of office in November, took another twist Thursday with disclosures that some congressmen who overdrew their House checking accounts by large amounts of money also used those accounts to make loans to their reelection campaigns.

At least six of the 24 current and former representatives identified by the House Ethics Committee as major abusers of the no-penalty overdraft protection at the now-closed House bank made substantial loans to their campaign committees during the period under review by the committee.

However, only one--former Rep. Jim Bates (D-San Diego)--has so far admitted making a loan to his campaign by overdrawing his House checking account. Another member on the list of worst abusers, Rep. Charles Wilson (D-Tex.), also acknowledged making a $10,000 loan to his campaign with a check written on his House account. He said, however, that he wrote a second check from a personal account at an outside bank on the same day to cover the amount.

Bates, who loaned $30,000 to his campaign treasury during the 1990 cycle, acknowledged that one of the four personal checks that he wrote to his campaign was listed among his overdrafts at the House bank. He said the check for $4,300, written sometime between late May and early July, may have been held for two or three days by the bank.

Bates now is running for Congress again.

Wilson maintained that his problems stemmed from an unexplained delay at the House bank in crediting his account with the deposit he said he made to cover the $10,000 check he wrote as a loan to his campaign treasury on Dec. 21, 1990.

He said the House bank failed to credit his account with the $10,000 payment from his personal account until Jan. 31--40 days later. He added that the loan to his campaign was funneled through the House bank because his campaign treasurer was located in Washington.

Congressional sources said that officials investigating the House bank and post office scandals had come across a surge of check writing activity during campaign periods. It is a pattern that could prove deeply embarrassing if it can be shown that members took advantage of the free overdraft protection to give themselves interest-free loans that in turn were passed on to their campaigns for a fee.

Wilson, for instance, said he charged his campaign 16% interest for the $10,000 loan, a rate that his press secretary, Elaine Lang, said was “the standard interest at the time on a personal loan.”

While members of Congress often loan money to their campaigns, some do so without charging interest while others usually charge less than 16%.

Besides Wilson and Bates, the biweekly congressional newspaper Roll Call identified four other members listed among the 24 worst checking account abusers as having made loans to their campaigns--although not necessarily from their House accounts. They were Reps. James H. Scheuer (D-N.Y.) and Harold E. Ford (D-Tenn.) and two former House members, Douglas Bosco (D-Sebastopol) and Doug Walgren (D-Pa.).