Campaign Fees Pay Lawmaker’s Defense : Ethics: The ranking GOP member of a powerful House panel uses all his 1989 contributions to fight allegations.

The ranking Republican of the powerful House Appropriations defense subcommittee spent all of his campaign contributions during 1989 to pay the lawyers who are defending him against allegations that he violated bribery and election laws, according to records obtained from the Federal Election Commission.

Rep. Joseph M. McDade (R-Pa.), a 14-term congressman from the hard coal region of Pennsylvania, has told the commission that he took $94,848 from his campaign treasury to pay for his legal fees last year--more than the $90,290 he collected during 1989.

It is not against House rules for members to dip into their campaign funds to cover legal fees, but seldom, if ever, do such expenses exceed the total contributions they collect in a year.

McDade, 58, is under investigation by both the FBI and the House Ethics Committee for allegedly violating the law in his dealing with a defense contracting firm.

The liberal Republican is accused of recruiting an entrepreneur to open a metal-fabricating plant in one of the poorest communities in his district, pressuring the Navy to grant contracts to the firm, and then accepting $45,000 in campaign contributions and other benefits from the contractor. He allegedly enjoyed free plane trips and the use of a Delaware beach house owned by the firm.

The defense contracting firm, known as United Chem-Con Corp., has since gone bankrupt. But officials of the firm, including a former aid to McDade, are also under investigation by the FBI. Among other things, they are suspected of bribing a Navy official.

McDade’s lawyer, Stanley M. Brand, a former House counsel who has built a thriving legal practice representing members of Congress in ethics investigations, said the Pennsylvania congressman is cooperating with the FBI investigation, which began more than a year ago.

He noted that McDade has not been charged with any crime, despite the lengthy investigation. “These investigations, in my judgment, get unfairly prolonged when an elected official is involved,” he said.

Brand said McDade has never been questioned by the ethics committee, which began looking into the case more than a year ago in response to a complaint filed by Common Cause, a citizens’ watchdog lobby. Traditionally, the congressional ethics committees do not move against a member of Congress until the criminal justice system has completed its disposition of the case.

As for his legal fees, Brand said it is not unusual for members of Congress to use campaign funds to pay their lawyers.

“If you went down to the FEC and looked at all the reports filed by members of Congress, you would find a lot of members with my name on their reports, particularly when the inquiry revolves around their use of campaign funds,” he said.

Fred Wertheimer, president of Common Cause, said his organization has never challenged the use of campaign funds to pay legal expenses, even though “it does seem to me that when people contribute to a congressional candidate, the basic purpose of it is not to pay for personal legal fees.”

Ninety-three percent of the money collected to pay McDade’s legal fees last year came from political action committees. At least 40% of that money came from defense contractors whose business futures hinge on decisions made in McDade’s defense appropriations subcommittee. These included the PACs of two California manufacturers, Northrop Corp. and Litton Industries.

Meanwhile, McDade received little financial support from his home state. Only 10 households in Pennsylvania contributed $250 or more to McDade’s campaign fund during the year. Moreover, only $425--or 4/10ths of 1% of his total receipts--came in donations of less than $250. By comparison, Rep. Les Aspin (D-Wis.), chairman of the House Armed Services Committee, received 27% of his receipts in donations of less than $250.

Of the 21 individual contributors from outside Pennsylvania who gave McDade $250 or more last year, 17 of them are located in the Washington area and six are employed by a single law firm in the nation’s capital. The legal limit for campaign contributions to any single congressman is $2,000.

Although McDade is believed to be virtually unbeatable in his home district, the congressman currently has $318,227 in his campaign war chest, which he could convert to his own use if he were to retire by January, 1993. In fact, when he divorced his wife a few years ago, records show that the settlement stipulated she could make no claim against his campaign funds upon his retirement.

Typical of McDade’s efforts on behalf of his home district was a provision that he inserted into an appropriations bill at the end of the 1986 session of Congress that designated Steamtown USA as a national historic site. Steamtown USA is a collection of mostly Canadian locomotives located near the congressman’s hometown of Scranton, Pa.