Five Must Testify in Wright Case, Ethics Panel Says

The House Ethics Committee on Thursday directed that five witnesses involved in a Texas oil deal that benefited House Speaker Jim Wright (D-Tex.) appear next week and give testimony on the transaction, despite their earlier refusal to cooperate.

Committee Chairman Julian C. Dixon (D-Los Angeles) said he rejected legal objections to the subpoenas by the five Texans and ordered them to appear here May 3 and 4 to answer questions that may wind up the 10-month investigation of the Speaker’s finances.

Committee members supported his position, Dixon told reporters. The five had refused to testify Tuesday in San Antonio on grounds that the panel had exceeded its authority. Dixon also renewed his demand for documents from a West German firm, Union Rheinische Petroleum Inc., that was involved in the transaction.

If the witnesses fail to appear, Dixon said, the committee may consider seeking contempt-of-Congress citations against them.

One of the witnesses under subpoena is Morris Jaffe, a multimillionaire businessman who has been a fund-raiser for the Democratic Party for more than 40 years. He and his son, Douglas, sold an interest in an oil well, known as the North Sabine Lake prospect, to a firm half-owned by the Speaker last May 10.

Union Rheinische bought a majority share of that interest on the same day with a $440,000 loan. Wright realized a substantial profit on the deal even though the well turned out later to be a dry hole.

The committee is attempting to determine whether the transaction involved an effort to funnel money to Wright by a person with an interest in legislation before Congress. At the time of the transaction, a company owned by Jaffe, Jaffe Aerospace Corp., was seeking a contract for development of a trainer aircraft. Wright’s business partner in that venture and others, George A. Mallick Jr. of Ft. Worth, has asserted that the deal was above-board and legitimate.

The committee has filed charges that the Speaker improperly accepted $145,000 in gifts from Mallick from 1979 to 1988 and allegedly schemed to evade House limits on speaking fees by making bulk sales of his books to business groups he addressed.

Wright has denied wrongdoing and requested a hearing before the committee at the earliest possible time to present his defense.

Dixon, however, said that Wright would not appear before the panel conducts a disciplinary hearing to weigh the evidence against the Speaker and decide whether the charges are substantiated.