Investigation of Banking Committee Chairman Ends : No Charges to Be Filed Against St Germain

The Justice Department said Tuesday that it is ending a criminal probe without filing charges against House Banking Committee Chairman Fernand St Germain, who allegedly allowed a savings and loan industry lobbyist to pay entertainment bills for him.

Justice Department spokesman John Russell said, “We’re declining prosecution,” concluding a criminal investigation that began last summer. St Germain issued a two-sentence statement saying he had been informed by his attorney of the decision and that “this means the case is closed.”

Disclosure Probed

The department investigated allegations that St Germain accepted food, drink and entertainment from James O. Freeman, lobbyist for the U.S. League of Savings Institutions, and other financial industry lobbyists.

That is a possible violation of a federal anti-bribery statute forbidding members of Congress from accepting anything of value in exchange for an official act. The Justice Department probe also focused on possible congressional reporting requirement violations, specifically whether St Germain should have disclosed meals allegedly bought for him by Freeman.

St Germain’s attorney, Raymond Banoun, has said he was confident that the Democratic congressman from Rhode Island would not be charged with any wrongdoing because “we’ve shown to them that there’s a degree of inaccuracy in the league records.”

Banoun said last year that one reimbursement submitted to the league by its lobbyist shows that he was having dinner with St Germain when the congressman was on television debating his opponent live in Rhode Island.

“The fact of the matter is there are dozens upon dozens of instances where he was out of town,” Banoun said last November.

League spokesman Mark Clark said, however, that the league keeps accurate expense records and has internal controls and audits.

The Justice Department in the St Germain probe also subpoenaed the records of the American Bankers Assn., the largest lobby group for the banking industry, and the Securities Industry Assn., the largest trade group for investment bankers, said federal law enforcement sources, speaking on condition of anonymity.

Under-Reported Income

The Justice Department investigation followed a 14-month probe by the House ethics committee into allegations that St Germain used his chairmanship for personal gain.

The committee found that the 14-term congressman violated House rules by under-reporting his assets by more than $1 million and by accepting a free plane ride from a Florida savings and loan association. But no disciplinary action was recommended.