Wright Defense Scheduled Tuesday : Panel to Let TV Cover Arguments by Speaker’s Lawyers

As tension mounted over Speaker Jim Wright’s political future, the House Ethics Committee announced Thursday that it would hear arguments and rule next week on his motions to dismiss two major charges.

The panel decided to allow television coverage of pleadings by attorneys for Wright and its own special counsel, Richard J. Phelan, Tuesday at its first public session in the case against the Texas Democrat.

Committee Chairman Julian C. Dixon (D-Los Angeles) said that he expects a decision to be issued a day or two later. If the panel rejects his challenge, according to some Democratic defenders of Wright, it would be a heavy blow to the Speaker’s chances of survival in office.

In a brief appearance before television cameras and a crowd of reporters outside his office, Wright said that he was “delighted” by the opportunity for his team of lawyers to present his “very, very strong” case before the 12-member committee, which has accused him of violating House rules on 69 occasions.

But the Speaker quickly retreated from the TV microphones when reporters asked him about a report in The Times that the Internal Revenue Service has begun an extensive criminal investigation of him and George A. Mallick Jr., his friend and former business partner from Ft. Worth.

‘Do Not Believe It’

Voicing incredulity that he could be the target of an IRS probe, Wright said as he walked away: “I do not believe it. I cannot imagine there would be any question on the mind of the IRS. I have never had any suggestion or hint of any such thing as that.”

Wright’s office later issued a one-paragraph statement saying that Gary Booth, Dallas district director of the IRS, had told Wright’s lawyer, William C. Oldaker, in a phone conversation Thursday “that the IRS is not conducting any investigation, civil or criminal, of Speaker Wright’s tax returns” or transactions related to them. “(Booth) denied the L.A. Times story,” the statement said.

Booth could not be reached for comment Thursday, but The Times has learned from other federal sources that the IRS criminal division has begun an investigation, coordinated from Washington, into the financial affairs of Wright and Mallick.

Also on Thursday, the Speaker made a rare appearance on the House floor to seek support for a compromise emergency money bill to allocate $1.2 billion for veterans’ programs. His effort apparently was designed to respond to Republican criticism that the Democratic leadership is in disarray because of the charges against him.

Although the Speaker’s remarks usually command the attention of House members, the focus of attention during Wright’s brief talk was on a floor conference in which his lieutenants and GOP leaders were ironing out the final details of the compromise measure. It was passed by voice vote.

Increasingly, he has seemed to be a lonely figure as he struggles to present a positive image despite a deluge of damaging newspaper and television reports on the investigation into his financial affairs. The Speaker received a jolt Thursday when Rep. Philip R. Sharp (D-Ind.) apparently became the first Democrat to call publicly for Wright to step down, declaring: “It’s time for a leadership change.”

Sees Need for Reversal

Even one of his closest Texas Democratic supporters agreed that Wright must reverse the flow of negative news. “It’s got to quit raining on the Speaker,” Rep. Charles W. Stenholm said. “The next things that happen will be significant, and the Speaker has to win them.”

Another House Democrat, who asked not to be identified, said: “There’s nobody out there who’s saying the Speaker is going to survive. It’s kind of embarrassing to see the Speaker walking around smiling like he does.”

A closed meeting of mid-level Democrats, generally sympathetic to Wright, broke up in confusion and gloom Wednesday when some participants suggested that he may have to resign because of political weakness, even if he manages to win a legal victory in the Ethics Committee.

The outcome of the meeting reflected intra-party strife as some Democrats worried that their party may suffer more if the Speaker remains in office, while others insisted that he deserves his chance to try to clear his name.

GOP Mainly Silent

For the most part, Republicans have remained on the sidelines during Wright’s travail, even though the original charges were filed a year ago by Rep. Newt Gingrich (R-Ga.), who has since been elevated to the second-ranking post of House minority whip.

“The odds are that Speaker Wright will not be there by the end of the summer and we’ll have a new Speaker,” Gingrich said on “Nation’s Business,” a television program sponsored by the U.S. Chamber of Commerce. “The Republicans are looking at the collapse of a left-wing machine.”

Meantime, the Ethics Committee allocated six hours for arguments Tuesday to consider Wright’s motions to dismiss charges that he improperly accepted $145,000 worth of gifts from Mallick and schemed to evade a House limit on outside speaking fees by selling his book in bulk to groups that he addressed.

Motions Seen as Critical

If the motions are granted, it would cut the heart out of the charges approved on April 17 by the panel.

Wright has argued that his relationship with Mallick was not improper because the Ft. Worth real estate developer was not, as defined by the House ethics code, a person with a direct interest in legislation. In addition, the Speaker has said, the rules provide a total exemption for book royalties, and he cannot be charged with a violation for exploiting that loophole.

In its deliberations, the panel voted, 8 to 4, that Mallick had a direct interest in legislation and 10 to 2 to support charges that the bulk book sales did break the rule that limits outside earned income to 30% of a member’s House salary.

Although Wright did not make a request for television coverage of the arguments, the committee decided unanimously to allow TV cameras and microphones along with newspaper reporters at the session, Dixon said.

Predicts Success

In his statement, the Speaker predicted success in the legal battle, adding:

“I know that my former partner, Mr. Mallick, never once in all the years I have known him has never asked me to do anything about legislation, has not ever expressed an interest in trying to influence legislation, and I know that I have never, by word or deed, violated the rule with respect to book royalties.”

In announcing the committee’s willingness to hear arguments, Dixon said that Wright would not have to be present and that the attorneys would be confined to legal points and authorities, with no consideration of new evidence.