When ‘Service’ Looks Like ‘Corruption’ : Lincoln S&L;: Lawmaking has degenerated so far that the senators’ intervention did not greatly differ from the routine.

The latest word from Washington is that senatorial interference in the regulation of a financially unsound savings-and-loan is an example of “constituent service.”

“I have done this kind of thing many, many times,” said Sen. John McCain (R-Ariz.), one of five senators who intervened with federal regulators to help Lincoln Savings & Loan of Irvine, Calif. He compared it to “helping the little lady who didn’t get her Social Security check.”

The chairman of Lincoln was Charles H. Keating Jr., a Phoenix businessman who is now accused of fraud. Keating or his associates donated more than $1 million to political organizations controlled by McCain and by four Democratic senators: Alan Cranston of California, Dennis DeConcini of Arizona, Donald Riegle Jr. of Michigan and John Glenn of Ohio.

In 1987 the senators pressured Edwin J. Gray former then the chairman of the Federal Home Loan Bank Board, to grant Lincoln an exemption to a regulation restricting S&L; investments in real estate and junk bonds. Gray recently testified before the House Banking Committee that Keating “devised a scheme” whereby Lincoln’s problems would seem to be the result “of a vendetta against Lincoln by its regulators, principally myself.” The senators evidently “bought off on this scheme,” Gray said.

Cranston has acknowledged that money was a factor in his actions. He attributed the Lincoln episode to the large sums needed for Senate campaigns. “Obviously,” he said, “if you didn’t have to get campaign contributions nobody would be making anything out of it. It led to the appearance of impropriety.” (Lincoln S&L; later collapsed and its bailout may cost taxpayers $2 billion.)

What are we to make of the “constituent service” claim? The truth is that the process of enacting laws in Washington has now degenerated so far that the senators’ intervention did not greatly differ from the routine. Ideally, laws are supposed to be impersonal and universal in their application. Today, however, Congress is best thought of as a trillion-dollar “common pool” to which 535 legislators have joint access.

Legislation now routinely disburses federal monies to constituents who also happen to be campaign contributors. And it goes, of course, to constituents who may be expected to return the favor (with a vote) on election day. To achieve spending majorities, “logrolling” legislators support such projects in each others’ districts. The manipulation of these dollar flows, as far as possible back into their home state or district, is now frankly the norm.

What are we to make, for example, of the recent defense authorization bill? In the end it included $1 billion for the F-14D fighter plane, which the Pentagon wanted to kill. But lobbyists from the Grumman Corp. and congressmen whose constituents stood to gain were able to keep it flying.

Even dovish congressmen will happily vote for such defense “pork-barrel” spending. They have a strong incentive to do so: If they neglect an opportunity to siphon millions of dollars back to their districts, the money will not just stay in the Treasury or be used to pay off the national debt. A different congressional coalition, supporting disaster relief or road improvements or a thousand other “needs” will gain access to the money and siphon it back to their constituents.

Civics textbooks dispose people to think of federal budget expenditures as determined by “need,” as though this could be measured objectively. People with income below a certain level “need” help; next we are told that foreign countries with national incomes below a certain per capita level “need” assistance. And so it goes. The Lincoln S&L; affair suggests that among the needs legislators take into account are their own. Their “need” is to be reelected. (And it is quite reasonable, incidentally, for a senator or congressman to believe sincerely that his reelection is in the public interest.)

We may agree, then, that the senators’ intervention was something like what they do “all the time.” Still, it did have unusual features, suggesting corruption. Everyday Capitol Hill logrolling is at least out in the open. Edwin Gray testified that his meeting with the senators was “highly unusual” in that it took place after normal working hours, in DeConcini’s private office, with no staff members present. This makes it seem more conspiratorial than legislative.

The “budget process” has broken down so badly that the senatorial intervention described by Gray and others is more of an addendum to mischief than a whole new chapter in the history of iniquity. Still, it did go beyond what we normally see inside the Beltway. “Corruption” might be a better word than “service.”