Nightline (ABC) - 1992-03-09 - 1 of 2

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[0:00] pack pickup tonight. Human Touch is the

[0:02] title cut to one of two Springsteen

[0:04] albums. While the video's out, the

[0:06] albums won't be at local record stores

[0:08] until March 31st.

[0:13] And that's tonight's entertainment

[0:15] report.

[0:16] >> And it's that good. Let's take a last

[0:17] look at the weather.

[0:18] >> All right, let's take a look at it.

[0:19] Looks like lots of sunshine tomorrow.

[0:21] We'll hit about 67 for a high

[0:23] temperature. Thanks, Jim.

[0:24] >> And that's our news, everybody. Thanks

[0:25] for being with us.

[0:40] I've got the power.

[0:45] The House of Representatives, where

[0:47] legislators are busy passing laws and

[0:49] spending billions of dollars of

[0:51] taxpayers money. But when it comes to

[0:53] spending their own money, members of

[0:55] Congress used to have a great deal.

[0:57] their own bank, where for years many

[0:59] wrote checks for a lot more money than

[1:01] they had in their accounts. More than

[1:03] 300 House members wrote bad checks

[1:05] totaling millions of dollars. And now

[1:08] some congressmen are trying to keep you

[1:10] from finding out who the check bouncers

[1:12] are.

[1:21] This is ABC News Night Line,

[1:24] substituting for Ted Capid, reporting

[1:26] from Washington, Chris Wallace.

[1:29] >> Just when you think Congress's standing

[1:31] with the American people couldn't get

[1:32] much lower, it always does. Whether it's

[1:35] late night pay raises or parking tickets

[1:37] that are fixed, free health clubs, or $5

[1:40] haircuts, the politicians on Capitol

[1:42] Hill keep acting as if they're different

[1:44] from all the rest of us. And the voters

[1:47] back home keep getting angrier. Now,

[1:49] another scandal is reaching its climax.

[1:52] Over the past 3 years, congressmen have

[1:54] written almost 20,000 bad checks,

[1:56] overdrawing their accounts in the House

[1:58] Bank. But those checks didn't bounce.

[2:01] They weren't returned for insufficient

[2:02] funds as ours would have been. No, the

[2:05] House Bank paid the money as a kind of

[2:07] interest free loan until the congressman

[2:09] made good on their accounts. To add to

[2:12] the controversy, this week the House is

[2:14] expected to approve an ethics committee

[2:16] plan to name only the 24 worst

[2:18] offenders. More than 300 other current

[2:21] and former members of Congress would not

[2:23] be identified. According to some

[2:25] Republicans, it's a cover up. As Night's

[2:28] Jackie Jud reports now, the mood on

[2:30] Capitol Hill seems to be to protect the

[2:32] members from the people who elected

[2:34] them. Imagine writing someone a bad

[2:37] check and doing it time after time after

[2:40] time and getting away with it. No

[2:42] penalties, no threats of closing your

[2:44] account. That's exactly what many House

[2:47] members did in the 3 years before their

[2:50] private bank closed last October amid

[2:52] controversy and voter anger.

[2:55] >> I think it's reprehensible. These are

[2:56] the our elected officials who we have

[2:59] chosen to represent us and do for us

[3:02] what we as individuals can't do and they

[3:04] are going ahead and doing just the

[3:05] things that they're telling us we

[3:06] shouldn't do. The banking scandal was

[3:09] the last straw for a lot of people who

[3:11] already were disgusted with Congress for

[3:13] its middle of the night pay raise, for

[3:15] its perks of fixed parking tickets and

[3:17] free lunches at congressional

[3:19] restaurants.

[3:20] What we have is a system here that is

[3:23] decayed and corrupt and we need to do

[3:25] something about it.

[3:26] >> What had the congressman so upset was a

[3:28] report by a house ethics subcommittee.

[3:30] It had spent the past 5 months

[3:32] investigating the bank accounts of House

[3:34] members. Among its findings, 296 current

[3:39] House members had bounced checks. 200

[3:42] overdrew more than their next paycheck

[3:43] would cover and 24 current and former

[3:46] members overdrew their monthly salaries

[3:49] at least eight times since 1988.

[3:52] Night Line has been told by a committee

[3:54] member that the worst abuser wrote about

[3:56] 1,000 bad checks for some $500,000.

[4:00] Congressman Matthew McHugh led the House

[4:02] probe. It's a case of members uh not

[4:05] taking care of their own personal uh

[4:08] checking accounts in any sensible way.

[4:11] Uh I don't know how members actually

[4:14] could sleep at night given the disarray

[4:16] in which their checking accounts in some

[4:18] cases were. Still, the House Ethics

[4:20] Committee seems intent on furthering

[4:22] Congress's image as an arrogant

[4:24] privileged class. It voted to disclose

[4:27] only the names of the very worst

[4:28] abusers, those two dozen who went over

[4:31] their limit at least eight times. McHugh

[4:33] says to make a broader accounting would

[4:35] violate a member's right to privacy. And

[4:38] besides, he says the House bank wasn't

[4:40] really a bank at all.

[4:41] >> No, I I think it is important that we

[4:43] not uh retroactively apply standards on

[4:46] people because there's political uh

[4:49] heat. Uh this was a bank in which only

[4:52] the money of members of the house was

[4:54] involved. uh only their salaries and

[4:56] other deposits were in this bank. It was

[4:58] a bank which uh tolerated for more than

[5:01] 40 years overdrafts of accounts so long

[5:04] as those overdrafts did not result in a

[5:07] deficiency which exceeded the next

[5:09] month's net pay deposit. And uh there

[5:11] was never any money lost in this bank.

[5:14] It is true that this is not a bank in

[5:16] the classical sense of of the word. But

[5:18] that very point I think is what sticks

[5:21] in the craw of some of our constituents.

[5:23] This is yet another special privilege

[5:25] for members of Congress. Well, it really

[5:27] wasn't all that special. It was a place

[5:29] to to to deposit your monthly paycheck

[5:31] and and to be able to write checks on

[5:33] it.

[5:35] >> The resolution that was approved by the

[5:37] ethics committee is to disclose just the

[5:39] 19 people.

[5:40] >> Right.

[5:40] >> The newspaper roll call broke the

[5:42] checking story last year. Its editor

[5:45] calls the committee's solution of

[5:47] limited disclosure a poor attempt at

[5:49] damage control. Part of the idea, and

[5:52] there's no doubt in my mind, is to find

[5:55] some scapegoat, sort of throw them over

[5:57] the side, and then hope that nobody's

[5:59] going to get upset about anybody else.

[6:01] Well, you know, I would almost go along

[6:04] with this idea, sort of sacrificing some

[6:06] people who probably shouldn't be

[6:07] sacrificed if it really helped the

[6:09] institution. I mean, I could buy that

[6:11] idea, but it's not going to work anyway.

[6:14] A group of freshman Republicans smelling

[6:16] a chance to embarrass the Democratic

[6:18] leadership which poo pooed the scandal

[6:19] when it broke is demanding full

[6:22] disclosure. They say too many people

[6:24] will get off the hook using the

[6:26] committee's narrow definition of abuse.

[6:28] >> Uh the majority of the committee used an

[6:31] arbitrary standard which resulted in 24

[6:34] people being designated as having abused

[6:37] their banking privileges. Uh people who

[6:40] escaped that designation wrote over 850

[6:45] bad checks totaling over $150,000.

[6:49] There were other examples of members

[6:51] writing 500700 bad checks over $100,000.

[6:55] And I can't defend that conduct as not

[6:59] being abusive of the banking privileges.

[7:01] If this institution uh is going to be

[7:04] relevant in American society, we've got

[7:06] to be able to level with the people who

[7:08] sent us here and show them that we're

[7:10] willing to stand up uh and and behave as

[7:13] they as they expect us to behave.

[7:15] >> A bitter fight is expected this week on

[7:17] the House floor about how many members

[7:19] should be exposed and in what manner.

[7:21] Glassman says he's never seen elected

[7:23] officials so scared.

[7:25] >> It's indefensible from a political point

[7:27] of view. It's very You can defend the

[7:29] pay raise. That's not hard. You know,

[7:30] you can get out there like Rostenowski

[7:32] said and said, you know, damn it, I'm

[7:34] worth $125,000. If you don't think I'm

[7:37] worth that, then vote me out of office.

[7:39] But you can't get up and say, damn it, I

[7:42] bounced 20 checks. So what? I'm a member

[7:44] of Congress. I mean, you can't say that.

[7:45] What What are you going to say?

[7:47] >> One way or another, many incumbents will

[7:49] have to stand the heat this fall. In an

[7:51] election year where voters have made

[7:53] clear that they won't accept politics as

[7:55] usual, the House is faced with the

[7:57] choice of naming names or appearing to

[8:00] favor a coverup. This is Jackie Jud for

[8:02] Night Line in Washington.

[8:05] >> When we come back, we'll talk with the

[8:06] acting chairman of the House Ethics

[8:08] Committee, Congressman Matthew Matthew

[8:10] Mchugh, with former Senator William

[8:12] Proxm, a longtime watchdog of government

[8:14] spending who calls the check bouncing

[8:17] scandal a disgrace. and Boston Globe

[8:19] columnist Mike Barnacle who says

[8:21] Congress is just a pack of dead beats.

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[10:46] >> Joining us now from our Washington

[10:47] studios are Congressman Matthew McHugh,

[10:50] a Democrat from New York, who is the

[10:51] acting chairman of the House Ethics

[10:53] Committee, and former Senator William

[10:55] Proxm, who spent much of three decades

[10:57] in the Senate spotlighting government

[10:59] waste. And from our Boston bureau,

[11:01] Boston Globe columnist Mike Mike

[11:03] Barnacle. Congressman, let me start with

[11:05] you if I can. Speaker Foley predicted

[11:07] today that uh when the House votes this

[11:10] week, it will vote to approve the ethics

[11:12] committee plan to name only the 24 worst

[11:15] offenders. I have to say I still don't

[11:17] get it. Why is it that voters aren't

[11:20] entitled to know how many bad checks

[11:22] their congressman wrote and for how

[11:24] much?

[11:24] >> Well, first Chris, let me say I'm not

[11:26] here to defend these banking practices,

[11:28] and I personally did not write any bad

[11:30] checks. But as chairman of the ethics

[11:32] committee for this investigation, uh I

[11:34] was bound to follow the house resolution

[11:37] which was passed 390 to8 last October.

[11:40] And that resolution directed us on the

[11:42] ethics committee uh to determine who

[11:45] abused their banking privileges by

[11:47] repeatedly and routinely overdrafting

[11:49] their accounts by a significant amount.

[11:51] Now we have faithfully tried to carry

[11:53] out that charge. uh if the House wants

[11:56] to change its mind, if it wants to

[11:58] engage in what is called full

[12:00] disclosure, uh that's perfectly uh

[12:02] acceptable to me. Uh but that was not

[12:04] the direction that we had in terms of uh

[12:07] >> Let me let me pick you up on that though

[12:09] because you will have a vote along with

[12:10] all the other congressmen sometime later

[12:12] this week. Will you vote for or against

[12:15] full disclosure?

[12:16] >> I will vote against full disclosure

[12:17] because it's not equal disclosure. First

[12:20] of all, we do not have complete

[12:22] information on many of the accounts uh

[12:24] on the list of 355. Uh many of those

[12:27] accounts only had a few bad checks. Uh

[12:30] 133 members had five or fewer checks. Uh

[12:33] these are private transactions. If a

[12:35] member of Congress did nothing wrong, if

[12:37] he didn't abuse his banking privileges,

[12:39] and most people would agree five checks

[12:41] over 39 months is not abuse, uh then why

[12:44] should these private transactions be

[12:46] spread out on the public record? It

[12:48] seems to be that we're treating

[12:50] congressmen different than everybody

[12:51] else.

[12:51] >> Well, let me ask uh they first of all, I

[12:53] suppose one of the answers to that would

[12:54] be that congressmen are different from

[12:56] everyone else. But let me ask Senator

[12:57] Proxm. Do you think that members of

[13:00] Congress enjoy some right to privacy

[13:02] here? Do you think there should be

[13:03] either this partial disclosure of only

[13:05] the the 24 worst offenders or do you

[13:07] think that uh we should find out about

[13:09] every congressman?

[13:10] >> Well, there's an easy answer. The easy

[13:11] answer is that you ought to have full

[13:12] disclosure. If you if you write one bad

[13:15] check, it should be known. You can

[13:16] explain that to your constituents. If

[13:18] you can't, you probably aren't aren't

[13:20] likely to be reelected anyway. So, I I

[13:23] it seems to me that the only answer that

[13:25] makes any sense at all is to have full

[13:27] disclosure. There are all kinds of ways

[13:29] in which you could have full disclosure.

[13:31] One thing, one way you could do it is

[13:33] simply to tell every write a letter to

[13:35] every single member of the House and who

[13:38] and and say whether he's clear, whether

[13:41] he's had a a check bounce or check 10

[13:44] checks bounce or 50 checks bounce. and

[13:46] then let the local newspaper, the local

[13:49] TV station, local radio station call him

[13:51] up, say, "Okay, Buster, what's your

[13:53] record? Let reveal it. You have it. And

[13:55] if if you don't have it, then it seems

[13:57] to me that that his opponent would have

[14:00] every reason in the world to raise the

[14:03] Dickens about it."

[14:03] >> Well, they'll probably defeat him.

[14:04] >> Well, let's bring in Mike Barnacle,

[14:06] who's one of those pesky reporters who'd

[14:08] be calling up and calling a congressman

[14:09] buster. Uh Mike, do you think that with

[14:12] this election coming up in a few months,

[14:14] do you think that the House can get away

[14:16] with just naming 24 or do you think that

[14:18] all the names are going to come out?

[14:20] >> Oh, well, look, Buster. Uh, you know, I

[14:23] think I think probably all the names

[14:24] will eventually come out. The problem is

[14:27] is exactly as Bill Proxmire just

[14:29] explained it. I mean, if a congressman

[14:32] is popular and substantial in his own

[14:34] district, he or she can explain four or

[14:36] five bounce checks. I mean, I have great

[14:38] sympathy for anyone who kites a check,

[14:40] having stood in the dock of Boston

[14:42] Municipal Court several years ago before

[14:44] I made any money and having to answer to

[14:46] a charge of larseny over $100, which is

[14:49] what they call a bounce check in this

[14:50] jurisdiction is what they would call it

[14:52] in Washington. You've got to get it out

[14:55] there or else people are going to

[14:56] mistake the House of Representatives for

[14:57] the local House of Correction.

[15:00] >> Congressman McHugh, um let me uh clear

[15:02] up a couple of details in this scandal

[15:04] if I might. Uh, could spouses of members

[15:07] of Congress write checks on their

[15:08] accounts?

[15:09] >> Yes, they could, Chris. A member of

[15:11] Congress could authorize a spouse or a

[15:13] staff member to sign checks.

[15:14] >> And in fact, did some of the spouses of

[15:17] members of Congress write these bad

[15:19] checks that we're talking about here?

[15:20] >> Yes, I'm sure they did because a number

[15:22] of members have told me that was the

[15:24] case.

[15:24] >> Let me ask you another question. There

[15:26] has been some some issue as to whether

[15:28] or not these bad checks since they were

[15:31] paid by the House bank whether they

[15:33] constitute interestf free loans and

[15:35] thereby income for which the congressman

[15:37] would be liable. What did you find on

[15:39] that?

[15:39] >> We asked our legal counsel to uh

[15:42] research that question and an overdraft

[15:44] is technically a loan. uh but he uh told

[15:48] us that these overdrafts do not

[15:50] represent the kind of interest foregone

[15:52] situations which would require reporting

[15:55] on on income taxes. And let me quickly

[15:57] add that uh no interest was paid to

[16:00] members of Congress that had surpluses

[16:02] in their accounts. Uh in my case, for

[16:04] example, I I had surpluses and we never

[16:06] got paid interest, which is what the

[16:08] average constituent would be paid uh at

[16:10] their local bank.

[16:11] >> Chris, let me let me let me just

[16:12] interrupt to put this into a broader

[16:14] perspective. The fact is that members of

[16:15] Congress now get $129,500

[16:18] a year. That's a tremendous pay. You

[16:21] know, not more than 1 or 2% of the

[16:23] American people get anything like that.

[16:24] It's far far too big. You also have have

[16:28] a doctor uh and and free prescription

[16:31] drugs. You have all kinds of other

[16:33] advantages, including having a

[16:35] newsletter that costs over a million

[16:36] dollars a year. The fact is that the

[16:38] taxpayers pays $3.5 million for every

[16:41] single member of Congress, including his

[16:44] salary.

[16:44] >> Yeah.

[16:45] >> Now, that is just too much. And under

[16:46] those circumstances, it seems to me that

[16:49] the least that members of Congress could

[16:51] do is is to is to reveal whether or not

[16:54] they they bounce checks or not. And

[16:56] anybody with $129,500

[16:58] year doesn't have to bounce a check and

[17:00] shouldn't ought to be ashamed if he

[17:01] does.

[17:02] >> Let me break in. Mike Barnacle, let me

[17:04] break in here just for a moment because

[17:05] we do have to take a pause. But when we

[17:07] return, I want to ask you all about the

[17:08] institution of Congress and what happens

[17:11] when so many voters start saying that it

[17:13] is out of touch. And we'll continue our

[17:16] discussion in a moment.

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