Wright Violated Rules 69 Times, Ethics Panel Says

In an unprecedented action, the House Ethics Committee Monday unanimously accused Speaker Jim Wright (D-Tex.) of 69 violations of House rules for allegedly accepting $145,000 in improper gifts from a Texas businessman and using sales of a 1984 book to evade limits on outside income.

While leaders of the panel emphasized that Wright is yet to be proved guilty of any wrongdoing, the 12-0 bipartisan vote to bring serious charges against the Speaker was a heavy blow to his chances of retaining his leadership post.

As Chairman Julian C. Dixon (D-Los Angeles) and Rep. John T. Myers of Indiana, the committee’s ranking Republican, declared that partisan considerations played no role in the decision, nine of the 10 other members of the panel sat behind them on a podium with somber expressions.

It was the first time that a Speaker of the House, the nation’s third-highest elected official, has been charged with ethics violations.

Reasserts Innocence

A confident Wright, however, reasserted his innocence and asked the committee to let him “confront these allegations head on, face to face” as soon as possible. But in the wake of the panel’s unanimous decision on the action, he no longer could dismiss the charges as the work of Republican extremists, as he tried to do a year ago.

“I know in my heart I have not violated any of the rules of that institution,” Wright told a labor union convention after the report was released.

Dixon’s announcement of the committee’s conclusions completed the investigative phase of an inquiry that was started last summer when Rep. Newt Gingrich (R-Ga.) and Common Cause, a citizens’ group, requested an examination of Wright’s conduct.

Based on testimony of 73 witnesses and thousands of documents, Dixon said, the panel supported charges in these areas:

--Book. Wright allegedly schemed to avoid House limits on outside earnings by promoting bulk sales of his 1984 book, “Reflections of a Public Man,” to groups that sought him for speaking engagements. In lieu of speaking fees, which are restricted by House rules, Wright arranged bulk book sales to the groups and then received royalties, which are not restricted. In at least one case, the panel said, all the books bought were not even delivered to the purchaser.

--Gifts. From 1979 to 1988, the committee charged, Wright accepted nearly $145,000 in gifts from Ft. Worth developer George A. Mallick Jr. in the form of an $18,000 annual salary for his wife, Betty, for four years; use of a free or reduced-rate apartment in Ft. Worth totaling another $53,488, and use and upkeep from 1983 to 1988 of a 1979 Cadillac.

At the Capitol, Wright’s attorney issued a point-by-point rebuttal of the charges that acknowledged only possible “technical violations” of House reporting rules and claimed that the committee was misinterpreting key precedents.

One issue was not resolved by the panel’s special counsel and was left open for further investigation. It involves a complex oil well deal in which money raised from a Texas firm was used to buy out Wright’s share for $350,000, or nearly six times his original investment.

A spokesman for Atty. Gen. Dick Thornburgh said that lawyers in the Justice Department’s criminal division are aware of the allegations and will review the panel’s entire report “line by line” to determine whether a criminal inquiry might be warranted.

Muted Reaction

Reaction in the House generally was muted, with Wright’s Texas Democratic colleagues brushing aside the allegations as frivolous and most Republicans and Democrats noncommittal.

“I think it really is premature to start dancing on the Speaker’s grave,” said Rep. Henry J. Hyde (R-Ill.). “I think we all want to maintain a sense of scrupulous fair play in this highly charged political situation.”

But Rep. Robert S. Walker (R-Pa.) urged that Wright step aside as Speaker while the charges are pending, and Rep. Howard C. Nielson (R-Utah) predicted that Wright will be out of office by the end of the year.

Only the Speaker’s Texas Democratic colleague, Rep. Charles Wilson, called the announcement “a very positive” development for Wright. “Everybody expected it to be very salacious and juicy--and it wasn’t,” Wilson said.

Defers Comment

Gingrich said he would hold a news conference later in the week to comment on the results of the investigation that he initiated.

“I’m not going to have anything to say until I’ve read the full report,” he said.

His non-reaction was in keeping with the lower profile he has assumed in connection with the Wright investigation since his Republican colleagues last month elected him House minority whip.

The committee made public a 279-page report by its special counsel, Chicago attorney Richard J. Phelan, summing up evidence gathered in a 10-month investigation and listing other charges that the panel decided to dismiss.

New Disclosures

It contained new disclosures that Wright’s partnership with Mallick--known as Mallightco--often was penalized for being late in paying its federal income taxes and reported that the Speaker got more benefits from it than Mallick did.

Dixon indicated that the panel would follow regular procedures in hearing the case against the Speaker before inviting him to make a personal defense of his conduct over the last decade.

But negotiations were under way between the committee and Wright’s attorney, William C. Oldaker, to expedite the proceedings as the Speaker has requested.

Under House rules, the six Democrats and six Republicans on the committee normally would conduct a public trial of Wright and decide whether the charges that they have found “reason to believe” are true indeed are supported by “clear and convincing evidence.”

Could Set Penalty

If they find that the charges are proved, the committee then would decide what penalty to recommend to the House, if any. Punishment could range from a fine or reprimand to censure and, the ultimate sanction, expulsion from Congress.

Many members of the House, including senior Democrats, have said that they do not believe the Speaker could keep his powerful leadership post if he received a formal reprimand from his colleagues.

No Speaker has been the sole target of such an inquiry since the late 1800s, although Wright’s predecessor in the office, Thomas P. (Tip) O’Neill Jr. (D-Mass.), was one of many persons mentioned in the 1977 Korean lobbying scandal. He was not charged with an ethics violation, however.

Wife Did Little Work

While Wright has maintained that his wife earned her pay and the other benefits from her job with the Mallightco partnership, the committee said it found that she did little work for the money.

“The issue is not whether a spouse can work but whether she did work and earned the money,” Dixon said.

By failing to disclose the gifts, the panel alleged, Wright broke House rules concerning financial disclosure. It also found that Mallick’s extensive interests in real estate, oil and gas ventures and involvement with savings and loan associations provided reason to believe that he has a “direct interest in legislation” before Congress. Persons with such interests are barred from bestowing gifts worth more than $100 a year to a member of Congress.

Panel Split, 8-4

A list of votes released by the committee showed that the decision concerning Mallick’s “direct interest” was one of the most divisive, splitting the committee, 8 to 4, with Democrats Chester G. Atkins of Massachusetts and Bernard J. Dwyer of New Jersey joining the six Republicans to form the majority.

On a later vote, however, all 12 members of the panel went on record in favor of supporting the charge.

“Members of Congress do not exist in a vacuum and should be expected to have personal friends with whom gifts can be exchanged,” Dixon said in a statement read at a news conference. “However, the nature and extent of the apparent gifts from Mr. Mallick indicates that Rep. Wright did not exercise reasonable care to avoid even the appearance of impropriety, which is the hallmark of the House gift rule.”

Closest Vote 7-5

Other preliminary votes on whether bulk sales of Wright’s book were improper were decided mainly by 10-2 margins, with Democrats Alan B. Mollohan of West Virginia and Joseph M. Gaydos of Pennsylvania in the minority. The closest vote was 7 to 5, on a count related to a sale of books to the Fertilizer Institute. There was a 12-0 vote, however, on the committee’s finding that Wright allegedly violated House rules by not reporting his wife’s salary and other benefits from Mallightco as gifts.

Dixon also noted that most of the allegations originally leveled against the Speaker were dismissed by the committee, including some on which the special counsel had recommended that charges be filed.

Wright was absolved for his controversial intervention with federal bank regulators on behalf of two faltering Texas savings and loan associations, as well as his intervention with other federal agencies on behalf of Texas oil and gas companies.

“While the congressman’s dealings with the Federal Home Loan Bank Board may have been intemperate, the committee was not persuaded that there is reason to believe that he exercised undue influence in his dealings with that agency,” Dixon said.

Use of Campaign Funds

The panel also threw out a charge that the Speaker used campaign funds to pay for publishing his 1984 book and another contention--raised by its special counsel--that Mrs. Wright allegedly benefited from a below-market interest rate on a $75,000 loan from Mallick’s wife through the partnership.

Another original charge against Wright when the panel began its inquiry last June 9--that he improperly used a staff aide to help write his book--also was tossed out by the panel. It said that the aide only edited Wright’s text and could have done the work on his own time.

The remaining allegations were shaped primarily by the special counsel, Phelan, who submitted his massive report to the panel on Feb. 21. He and Wright’s attorney spent nine days in briefing the committee on their differing views of the case and the 12 members took another eight days to reach their conclusions.

‘Reason to Believe’

“The statement of alleged violation . . . represents a determination by the committee that in 69 instances, there is reason to believe that Representative Wright violated the code of official conduct and other House rules which apply to him as a member of Congress,” Dixon said.

While the committee’s major decisions were leaked in press accounts last week, the number of alleged violations and the total amount of gifts did not come to light until Monday, and they surprised some members.

Also surprising to many House members was the strong show of bipartisanship by the committee, potentially complicating Democrats’ hopes of limiting the political damage and preserving Wright’s speakership.