Rostenkowski’s Future Is On Hold : Investigation: The possibility that the powerful House chairman may face criminal charges is undercutting his ability to aid Clinton.

This was, by his own reckoning, supposed to have been Dan Rostenkowski’s finest hour.

In the twilight of a long political career, the Illinois Democrat would steer President Clinton’s economic and health care policies through the treacherous shoals of Congress and, in the process, make a major contribution to the fortunes of both his country and his party before retiring.

No one, it was widely agreed, was so able or eager to take up the challenge as “Rosty,” the gruff and burly chairman of the House Ways and Means Committee.

Indeed, as a comic emblem of his unrivaled appetite for punching through legislative gridlock and snatching compromise from the jaws of defeat, Rostenkowski keeps an 11-foot pole in his office --for reaching out to options he would not touch with the 10-foot kind.

Now, it seems, that may not be the way it turns out.

On the eve of what might have been the crowning performance of his 34 years in Congress, Rostenkowski has become mired in controversy, facing the possibility that he will be charged with taking government funds through an unusual arrangement that allegedly permitted some members of Congress to obtain money from the House post office under the guise of purchasing postage stamps.

The allegations, contained in a plea-bargain statement by a former House post office official and in related court documents, are part of a federal investigation.

Exactly what Rostenkowski’s involvement may have been and whether he will ever be charged or convicted remain to be seen.

The 65-year-old lawmaker denies any wrongdoing. At a Saturday news conference, Rostenkowski called the allegations “unfair, false and baseless.”

“I want to make it absolutely clear that I have committed no crime and have engaged in no illegal or unethical conduct,” Rostenkowski said.

Details of the alleged scheme remain murky. Even some of his critics find it incredible that a man with such power in Congress, who has faced little serious political challenge in his district and easily raised millions of dollars in campaign funds would endanger everything for the relatively small sums allegedly involved.

But whatever the outcome of the investigation, it is clear that defending himself will pose a major distraction for Rostenkowski.

And the controversy has focused new attention on an often-overlooked aspect of his career: Along with the towering figure of Rosty, the Ways and Means chairman, there has existed Rosty, the old-fashioned politician who pushed right to the edge of the rules when money was involved.

He was near the top of the list of lawmakers who accepted honorariums for speeches to trade groups and other special interests until receiving such fees was banned, government records show. He was a regular passenger on corporate jets as he traveled around the country attending celebrity golf tournaments and other similar events. He unapologetically hobnobbed with lobbyists and leaders of the industries and interests affected by the activities of the committee he heads.

Over the years, Rostenkowski has had few peers when it comes to taking free trips to speak before interest groups at locations that often seem to be located next to his main passion apart from politics--the golf course.

According to his financial disclosure records, between Jan. 1, 1987, and Dec. 31, 1991, Rostenkowski took 167 trips paid for by corporations, universities and charities--an average of 34 each year.

Thirty of those 167 trips were to attend golf tournaments. In 1991 alone, Rostenkowski traveled to nine tournaments.

While corporations and interest groups picked up most of the tabs, Rostenkowski also charged many expenses to his campaign.

Records indicate, for instance, that during the 1991-92 election cycle, Rostenkowski’s campaign paid $1,600 in “consulting” fees to five golf pros hired by the lawmaker to attend on-the-links “fund-raising events.”

The records also show that Rostenkowski charged his campaign for $28,422.35 in meals at restaurants and country clubs during the 1992 election cycle.

Until 1991, when the practice was banned, Rostenkowski was also a leader in collecting honorariums--the fees that corporations and interest groups pay to have lawmakers address them. Between 1987 and 1990, Rostenkowski collected $1,062,500 in honorariums, always keeping the maximum amount allowed under House rules and donating the remainder to charity.

While this is not illegal, federal prosecutors in Chicago are examining other financial arrangements between Rostenkowski and his campaign. These include $73,000 in campaign funds that Rostenkowski paid himself and his sisters as rent for a little-used office in his Chicago home and another $73,000 in taxpayer money used to lease several cars for the lawmaker.

No matter how the House post office investigation turns out, it is likely to cast a shadow over Rostenkowski’s career.

If all had gone according to his plan, he would now be strapping on his armor, sharpening his 11-foot pole and swaggering out to do battle for Clinton’s deficit-reduction and health care reforms.

The fact that the task of uniting all of the Democratic Party’s unruly factions behind a budget deal seemed impossible has never daunted him. Indeed, the more difficult it appeared, the more Rosty seemed to relish his self-anointed role as “the Capitol Hill cardinal of the Clinton popeship,” in the words of one lobbyist.

These days, however, Rostenkowski looks more like an embattled lord besieged in his castle than he does a knight in shining armor, riding to Clinton’s rescue. With federal prosecutors firing subpoenas at his gates, he is simultaneously waging two battles--one for the Clinton budget and the other for his political life.

Sources close to Rostenkowski said there is both a siege mentality and an aura of resignation around his office.

Among the legions of lobbyists and fellow lawmakers who count themselves as Rostenkowski’s friends, nearly all express shock at the investigation.

“It’s just inexplicable,” said Rep. Robert T. Matsui (D-Sacramento), who has served with Rostenkowski on the Ways and Means Committee for 13 years. “In all the time I’ve known him, he has always followed the rules, always been assiduous in dealing with ethics issues.”

Why, Matsui and other friends ask, would one of the most important men in Congress put his entire career in jeopardy for a relatively small amount of money?

According to William Schneider, a political analyst with the American Enterprise Institute, the “answer to that question can be expressed in one word: Chicago.”

A barrel-chested bear of a man, Rostenkowski is what even a close friend concedes is the “last of the breed”--a proud and craggy-faced example of the old-style wheeling-and-dealing politicians who dominated Congress until post-Watergate reforms in the mid-1970s.

The reforms that periodically convulse Congress--most recently last year in the aftermath of a scandal involving tens of thousands of dollars in overdrafts at the House bank--have never seemed to sit well with Rostenkowski, who some friends say eschews “faddist” ethics in favor of a personal code of honor that involves doing what he can for people and always keeping his word.

“He’s someone who says what he means, means what he says, keeps his word and whose handshake is as good as gold,” said Paul Equale, a senior lobbyist with the Independent Insurance Agents of America.

To others, Rostenkowski also is an example of a politician who sometimes cuts ethical corners, who makes no secret of the fact that he feels he is underpaid and who, in Schneider’s words, “has always done things the way they do them in Chicago and . . . always taken every perk he could get.”

Still, friends insist that while he doesn’t mind letting a lobbyist pick up the tab for an expensive meal, Rostenkowski would never steal.

Under Democratic House rules, if Rostenkowski is indicted, he will have to step down as Ways and Means chairman--a move that many Democrats say would spell disaster for the major policy initiatives Clinton wants Congress to pass this year.

“Rosty is the glue that keeps the committee together . . . nobody is capable of replacing him,” Matsui said. “No one has his skills in putting legislative packages together, and “There’s no question that (an indictment) would be a major setback for President Clinton’s agenda.”

“I’m barely exaggerating,” said a senior Democratic aide, “when I say that if Rosty is indicted, a lot of people around here will feel that it’s time to retreat to the bunker and break out the cyanide capsules.”

Researcher Murielle Gamache contributed to this story.