House to Name All Bad Check Writers : Ethics: Lawmakers are ready to authorize disclosure of financial records of 355 current, former members of Congress linked to scandal. The bank’s operator resigns.

WASHINGTON —  Facing its most explosive political scandal in recent years, the House appeared ready Thursday night to authorize disclosure of banking records for 355 current and former members of Congress who wrote at least one bad check against the House bank during a recent 39-month period.

The decision could prove politically fatal in November to an untold number of the 296 current members who wrote checks without sufficient funds to cover them. But Republicans forced the issue by contending that any course other than full disclosure would amount to a political cover-up.

As floor debate intensified in anticipation of the late-night vote, the scandal took another, unexpected turn when House Sergeant-at-Arms Jack Russ--who was responsible for the bank’s operation--resigned under pressure from the House Ethics Committee. He was replaced temporarily by Werner Brandt, a top aide to Speaker Thomas S. Foley (D-Wash.).

In another sign of the political sensitivity of the issue, the Senate voted, 95 to 2, for a resolution that noted the bad check writing scandal was limited to the House since the Senate has no comparable bank and no plans to establish one. Several senators complained on the floor that their constituents thought they, as well as House members, were writing bad checks.

In the House, a reluctant Foley approved a bipartisan compromise that would within 10 days name 19 current members and five former members who were labeled as the worst “abusers” of the casually run House bank.

Five days later, the names of all other House members who wrote any bad checks would be released, together with the number of the checks and the period in which they were written.

The apparent solution was a sharp contrast to the Ethics Committee’s recommendation to limit the disclosure to the 24 worst cases and withhold banking records of all others who wrote checks without enough funds to cover them.

Votes to carry out the arrangement were scheduled for late Thursday evening.

The identities of those who had written the rubber checks were not known officially as the House considered the disclosure rules. But it was widely believed there would be many more Democrats on the list in view of their 268-166 majority in the House. There is one independent in the 435-member body.

Leaders of both parties were expected to be named. Foley and House Minority Leader Newt Gingrich (R-Ga.), for example, were among 62 House members who already have acknowledged that they wrote some bad checks.

Rep. Charles Hatcher (D-Ga.) told the Associated Press that he overdrew his account as many as 780 times over 39 months because he understood he was permitted to write checks up to the amount of his next monthly paycheck.

Despite efforts this week by Foley and House Majority Leader Richard A. Gephardt (D-Mo.) to get party backing for the committee’s proposal for only limited disclosure, they reversed themselves when Democratic whips said they did not have the votes to stop the GOP-led drive for full disclosure.

“It’s politically untenable to resist disclosure at this time,” said Rep. Charles Wilson (D-Tex.), who said he had cashed 75 or more bad checks himself during the period from July, 1988, to last Oct. 3.

“I wish we had done this a long time ago,” said Rep. Jerry Lewis (R-Redlands), who led a Republican move for full disclosure of all bad check writers.

The bank, criticized by the ethics panel for sloppy operating practices, was shut down Dec. 31 by order of the House.

Some members complained that for four decades the bank had allowed members of the House to overdraw their accounts up to the amount of their next month’s take-home pay--in effect taking an advance on their next paycheck. Others said the bank at times did not inform members that their accounts were overdrawn.

While overdrafts had to be made up, and the bank never lost any money because of its practices, public exposure of thousands of bad checks written by hundreds of members of Congress caused a public uproar.

Russ, the sergeant-at-arms who became the first casualty of the bank scandal when he resigned Thursday, cashed 19 personal checks at the facility for a total of $56,000, although he had no account there himself.

He is recovering from a gunshot wound in his cheek that he said was inflicted by a robber who accosted him while he was walking his dog one morning a few weeks ago near the Capitol. Police, however, have cast some doubt on his story, suggesting that perhaps the wound was self-inflicted.

In a recent interview on CNN, he had acknowledged feeling “like a small kid walking into school who is set upon. I have one thing in my favor . . . I know the truth and it will come out,” an apparent reference to both the shooting and the check scandal.

Russ sent his resignation, in writing, to the Speaker after it became clear that he would not be able to hold on to his job.

The pending disclosure decision prompted a series of confessions by House members on their authorship of bad checks at the casually run House bank.

“I called the posse and gave up,” said Wilson. He said he favored full disclosure of his banking habits and those of his colleagues. When asked whether it might doom his chances for reelection, Wilson replied: “The voters won’t give you a badge of honor for it but it’s not a show-stopper. Like voting for a pay raise.”

Why did Wilson do it? “Irresponsibility,” he said. “I’ve always lived from paycheck to paycheck.”

Rep. Peter H. Kostmayer (D-Pa.), who also acknowledged that he wrote 19 bad checks totaling less than $9,000, said simply: “I made a mistake. The question is whether 19 checks for less than $9,000 is enough to end Peter Kostmayer’s career.”

Driving the House’s decision was a widespread feeling that the issue could not be evaded and that it was better to authorize full disclosure and let those on the list explain the matter to their constituents.

The scandal over the House bank has been simmering ever since the General Accounting Office reported in September that thousands of bad checks had been written by members of the House without any penalty or interest charge.

At first, Foley ordered a halt to the bank’s practice of covering bad checks but balked at further action. Under considerable pressure from Republicans and some members of his own party, however, he relented and supported an Ethics Committee investigation of the bank. He also agreed to permanently closing the bank on Dec. 31.

Foley at first argued that no taxpayer funds were involved in the massive overdrafts since the House bank was more like a “check writer’s cooperative” than a normal banking institution. But a wave of voter resentment at a congressional perquisite that was not available to ordinary citizens forced a retreat by the Speaker and his high command.

When the ethics panel recommended on a 10-4 vote to identify only the 24 worst abusers and not disclose the names of the 331 current and former members who had written at least one bad check during the three years under scrutiny, a furor exploded.

Led by the four dissenting Republicans on the committee and Lewis, the third-ranking GOP leader, a demand for disclosure of the names of all those who wrote bad checks picked up steam on both sides of the aisle.

Foley, along with Gephardt and House Majority Whip David E. Bonior (D-Mich.), threw his support behind the Ethics Committee recommendation but then abruptly reversed himself Thursday. His Democratic lieutenants told him they did not have the votes to stop the drive for complete exposure of House bank records.

At that point, Foley devised a bipartisan compromise that would support the Ethics Committee’s report on its five-month investigation but also provide for total disclosure that the Republicans had been demanding.

How the House Bank Worked

The House Ethics Committee spent five months investigating rubber check writing at the House bank. Here is some background: What kinds of transactions occurred? Most members transferred their monthly paychecks by direct deposit into the House bank. They then wrote checks for spending money, or, in some cases, as payment to third parties. House employees and journalists also used the bank to cash checks. The bank was closed in the fall when the system came under scrutiny. How many House members were involved? The ethics panel says 296 current members and 59 former members wrote bad checks at the bank during the 39 months under review. What is the controversy about? Unlike commercial banks, the House bank almost always honored overdraft checks. In a commercial bank, the customer would be charged a fee and the check would be returned. Was there a limit on the amount of the check? Only members with overdrafts bigger than their next paychecks risked bouncing checks. When the bank closed last year, members earned $125,100 a year and were paid $10,425 monthly. Depending on withholding and deductions, members could net roughly $7,000 a month. Under the policy, bad checks larger than this amount would be bounced. What did this cost taxpayers? Nothing. Bad checks were covered by funds from other House members. But the bank itself was supported by taxpayers. The General Accounting Office says personnel costs for a 12-month period totaled more than $700,000. Does the Senate have a similar system? There is no bank as such. The Senate secretary runs a check-cashing service. A spokeswoman says a GAO audit has given the service a clean bill of health.