Partisan Battle in Wright Case Seen : Details on Finances Surface as Ethics Report Is Awaited

Times Staff Writer

House Democratic leaders braced Monday for a partisan battle over an imminent ethics report on Speaker Jim Wright (D-Tex.) as new details about Wright’s close financial relationship with a Ft. Worth, Tex., businessman emerged.

The House Committee on Standards of Official Conduct, wrapping up the first phase of its eight-month investigation of six allegations against the Speaker, is expected to start deliberations today and possibly report its findings this week.

Meanwhile, House Democratic leaders made public a letter to the 258 Democrats in the House, accusing some Republicans of being “zealous partisans” improperly attempting to turn the investigation into a “brazenly political circus.”

The letter underscored Democrats’ concerns that Republican leaders, smarting from the Democrat-controlled Senate’s rejection of John Tower to be secretary of defense, would retaliate by demanding that Wright’s conduct be subject to strict, high standards.

Speaker Asserts Innocence

Wright has insisted that he broke no laws and no House rules and suggested that he, like former Speaker Thomas P. (Tip) O’Neill Jr., is the target of a Republican attack because he is an effective legislative leader.


Although the panel has preserved strict secrecy on its proceedings, it appeared to be focusing major attention on Wright’s complicated business dealings with George Mallick, a real estate developer from his home city of Ft. Worth.

The attitudes of the six Democrats and six Republicans on the ethics committee on this aspect of the inquiry may hold the key to the outcome, congressional sources said.

Mallick and his wife, Marlene, formed a company in 1979, known as Mallightco, to provide assistance to Wright and his wife, Betty. The next year, the Wrights bought a 50% interest in the company in return for stocks worth at least $50,000 and with a maximum value of $100,000.

At issue before the ethics panel is whether Wright adequately disclosed his holdings in the partnership during the years 1980-86. Wright did not detail the holdings in his House financial disclosure statements until 1988, when he listed them in amended reports.

Car Used by Betty Wright

A related issue involves a 1979 Cadillac sedan that once belonged to the company but later was loaned to Betty Wright for her use in Washington. She also was paid $18,000 a year from 1979-83 by the company, and the Wrights for years were allowed to use a Ft. Worth condominium that belonged to Mallick’s son, Steven.

The issue before the committee apparently is whether Betty Wright’s salary, the car and the apartment were compensation for her work for the company or undisclosed gifts. According to the Wall Street Journal, which published a story about the car Monday, Mallick has said that Mrs. Wright helped explore real estate deals for the firm.

In late 1987, Wright put his holdings, including the Mallightco stock, in a blind trust. The trustee sold the stock but its price and the identity of the buyer have not been disclosed.

The 10-year-old Cadillac, however, is still being driven by Betty Wright. Mark Johnson, a spokesman for the Speaker, said it is the Speaker’s understanding that the car was placed in the blind trust and thus became the property of the Wrights.

Loan and Dividends

According to his disclosure reports, Wright and his wife received a loan of $84,000 from Mallightco and dividends from investments valued between $16,000 and $52,000 in 1986 and 1987.

Another major issue is whether Wright improperly evaded limits on outside income by arranging for publication of his 117-page book, “Reflections of a Public Man,” by his political campaign printer and receiving $55,000 under a generous royalty contract. Many of the books were bought in bulk by Wright’s political supporters.

Defenders of the Speaker, however, said that House rules specifically allow an exception to the limits on outside income for copyrighted books and, therefore, that the Speaker was not violating any ethical standard. A related issue is whether Wright improperly assigned a staff member to travel to Ft. Worth to work on the book, however.

The panel also is weighing charges that Wright tried to bully federal regulators so that they would give favorable treatment to Texas savings and loan associations under government investigation.

Under House rules, the committee has several choices. If it finds no violations, it would exonerate the Speaker. If violations deemed not serious were found, it could recommend against sanctions.

If, however, the panel members want to discipline the Speaker, they would issue a statement of alleged violations similar to an indictment and invite Wright to reply at a committee hearing.

Possible penalties include a reprimand, censure or expulsion from the House.

In their letter to House Democrats, several of the party’s leaders said that the investigation is a “serious and legitimate inquiry” but that each member of Congress is obligated to approach the issues with “absolutely no regard for political pressure of partisan convenience.”

Democratic congressional sources, who asked not to be identified, said they expect at least three of the six Republicans on the panel, along with the six Democrats, to reach an unbiased conclusion on the allegations against Wright.

Rep. Newt Gingrich (R-Ga.), who filed the complaint last May that sparked the inquiry, has said that he will seek to make public a 450-page report by the committee’s special counsel, Richard Phelan, no matter how the committee decides the case.