Amid Scandal and the New Accent on Ethics, Senators Tread Carefully : Politics: The current atmosphere breeds caution in such areas as honorariums, campaign contributions and favors for constituents.

When an Indiana man telephoned the office of Sen. Richard G. Lugar (R-Ind.) seeking assistance in a dispute with the Internal Revenue Service recently, the senator’s staff reacted as if someone had set off a stink bomb.

Even though senators frequently assist constituents with IRS problems, Lugar’s aides were quick to tell the caller that the senator could not help him, especially when they learned that his complaint was considerably more complex than a lost tax-refund check or an audit that seemed to be taking too long.

“Bells and whistles sounded more rapidly this time,” said Charles N. Andreae, Lugar’s administrative assistant. “I think people are awfully sensitive right now.”

The sensitivity Andreae describes stems primarily from what is commonly called “the Senate’s Watergate,” a convulsion of alleged ethical misdeeds that has brought a record number of seven senators under investigation by the Senate Ethics Committee. These include California Democratic Sen. Alan Cranston and four others, all together dubbed the Keating Five.

Ethical problems have been the scourge of official Washington over the last few years, particularly in the House, which ousted Speaker Jim Wright last year in response to allegations that he misused his office for personal gain. But this is the first time in many decades that Congress’ staid, old Club--as the Senate is known--has been gripped by the problem of how to deal with the spreading taint of corruption.

And for many senators, it has been a chastening experience.

Not only are senators and their aides being much more cautious about helping constituents--particularly “fat-cat” contributors--but the ethics investigations have given rise to a rash of legislative proposals to restrict the large amounts of honorariums and campaign contributions that senators collect from rich donors seeking assistance in their dealings with the federal bureaucracy.

In fact, these current scandals have had such a profound impact on the Senate that they are likely to bring about a major overhaul of congressional ethics rules and campaign finance reform--probably before the end of the year, according to Fred Wertheimer, president of the citizens’ watchdog group Common Cause.

“As a result of a number of developments in the Senate, and with the Keating Five affair center stage, we have our best chance since Watergate to clean up the congressional campaign scandal and enact other key ethics reforms, such as banning honoraria,” Wertheimer said.

In addition to Cranston, who is the assistant majority leader and a former presidential candidate, the recent Senate scandals have touched some of the chamber’s most prominent members--Banking Committee Chairman Donald W. Riegel Jr. (D-Mich.); Dennis DeConcini (D-Ariz.), who just a year ago was under consideration for a top post in the Bush Administration; John Glenn (D-Ohio), the former astronaut and one-time presidential hopeful; John McCain (R-Ariz.), Vietnam POW who often has been mentioned as a future GOP presidential candidate; Dave Durenberger (R-Minn.), former chairman of the Senate Intelligence Committee, and Alfonse M. D’Amato (R-N.Y.).

Cranston, Riegel, DeConcini, McCain and Glenn--known as the Keating Five--are being investigated for their efforts to intervene with federal regulators on behalf of Charles H. Keating Jr. in 1987, when his Lincoln Savings & Loan of Irvine, Calif., was being investigated by the Federal Home Loan Bank Board. The five also solicited a total of nearly $1.5 million from Keating for their campaigns and other causes. Lincoln’s collapse will cost the taxpayers $2.5 billion.

Durenberger is accused of trying to circumvent the limit on honorariums by selling $100,000 in books he authored to groups that invited him to speak. Unlike honorariums, there is no limit on the amount of book royalties a senator can accept.

And D’Amato is alleged to have done favors, such as securing Housing and Urban Development grants and other federal preferences, for both contributors and clients of his brother’s law firm. He also dropped his junk bond legislation opposed by Drexel Burnham Lambert Inc. after receiving $70,000 in political contributions from the firm’s executives and clients.

The Ethics Committee has hired outside counsel to handle all these cases. The investigations are likely to continue through the year--prolonging the agony of the seven senators as well as their colleagues.

According to sources, Ethics Committee Chairman Howell Heflin (D-Ala.) has assured senators seeking reelection this year that he will not make the committee’s findings known until after the next election in November, sparing them any additional embarrassment.

Although the scandal is almost never mentioned on the Senate floor, it clearly is having an impact on the business of the chamber. Sources said the Senate Banking Committee has shied away from holding oversight hearings on the new savings and loan bailout bill primarily because they might hear testimony about Lincoln that would be embarrassing to Riegel, the chairman, and Cranston, the ranking Democrat.

Cranston’s effectiveness as the assistant majority leader also appears to have suffered as a result of the scandal, according to a recent poll of congressional aides. Fifty-two percent rated the California senator “fair to poor,” and only 9% found his performance excellent. A year ago, 26% rated him excellent and 24% checked “fair to poor.”

Each of the seven senators under investigation has been forced to devote considerable time to defending himself in the press, and their campaign fund-raising activities have clearly suffered as a result. According to reports submitted to the Federal Election Commission, the fund raising of Cranston, Glenn and Riegel fell off sharply in the last half of 1989.

Like Cranston, the senators under investigation have also watched their popularity slip in the polls--perhaps permanently.

“John Glenn may be reelected, but he will never be John Glenn again,” remarked a former Democratic Party official.

Indeed, the reputation of the entire chamber appears to have been tarnished slightly, judging from the many jokes that are making the rounds in Washington. Rep. Barbara Boxer (D-Greenbrae) recently quipped during an after-dinner speech in Washington that the letters “s and l” now stand for “senators who need lawyers.”

Nevertheless, according to sources, all seven senators seem to be making a point of showing up for the often poorly attended Senate gatherings, as if to prove that nothing is seriously wrong.

“It’s as if they are ‘born again’ members of The Club,” said one Senate aide.

It is highly unusual for so many senators to be under suspicion at the same time, according to legal historians. The House endured three major scandals in the 1970s--Koreagate, Abscam and the probe of some members who had sexual relations with congressional pages. But most modern scandals in the Senate have involved no more than a single senator.

As a result, these investigations appear to be having much more impact on the behavior of the Senate than any previous ethical flare-ups. Many senators, their aides and lobbyists agree that the investigations have made them all more sensitive to the appearance of wrongdoing, especially in cases where a senator is being asked to intervene with the federal government on behalf of a big contributor.

In fact, according to some officials, the current scandals have made senators so touchy about doing favors for fat cats that they are now more likely to take up the cause of a person who has never contributed than to help one of their most faithful contributors.

“It may now be to your disadvantage to contribute to a senator,” Andreae said. “For some time, people who have contributed will wind up being treated with greater scrutiny.”

At the heart of the senators’ dilemma is the question of how far a member of Congress should go when representing the views of a constituent before the federal government--a question that has long been debated on Capitol Hill and even in the courts.

Everyone agrees that members of Congress have an obligation to assist constituents who are getting the runaround from the federal bureaucracy, particularly those who are having trouble getting benefits to which they are entitled such as Social Security, veterans benefits, government pensions and the like. Indeed, each congressional office has several employees assigned exclusively to that task, known as “constituent services.”

But there are differing opinions among members of Congress about how far they can push the bureaucracy on behalf of constituents who are under investigation by independent regulatory and investigatory agencies of the government, such as the IRS or the Securities and Exchange Commission.

In a legal brief submitted to the Senate Ethics Committee, Cranston argued that it is perfectly legal for a member of Congress to contact a federal regulator--as the five senators did by contacting officials who were investigating Keating’s thrift.

To bolster his argument, Cranston cited two 1972 Supreme Court rulings recognizing that senators frequently “cajole and exhort” agencies and engage in “a wide range of legitimate errands performed for constituents--the making of appointments with government agencies, assistance in securing government contracts . . . performed in part because they have come to be expected by constituents and because they are a means of developing continuing support for future elections.”

On the other hand, some experts such as former Senate Banking Committee Chairman William Proxmire (D-Wis.) argue that intervention on behalf of contributors under investigation by federal regulatory agencies is at least wrong, if not illegal.

“These regulators differ from the Agriculture Department because they have a quasi-judicial function,” he said.

Rep. Dennis E. Eckart (D-Ohio), agreeing with Proxmire, recently told the Washington Post: “If some guy writes and says, ‘I’m being audited by the IRS, can you help?’ I’ll write back, ‘Too bad. Get a lawyer and call me from the penitentiary.’ ”

But most members of Congress seem to hold the view of Senate Minority Leader Bob Dole (R-Kan.), who finds it difficult to define the difference between bringing legitimate pressure to bear on an agency and going too far on behalf of a contributor.

“There is a very fine line there,” Dole said. “There’s a question of how hard do you lean on somebody, I suppose, in an agency. . . . It gets to be sort of confusing, what’s right and what’s wrong and where. . . . You have to sort of know how far you can go.”

Whatever the outcome of the current Ethics Committee investigations, many Senate officials expect the rulings to establish a much clearer rule governing what a senator can legitimately do for a constituent who is under investigation by the federal government.

Likewise, a growing number of senators are anxious to shed the taint of these scandals by rewriting the rules of political fund raising and speechmaking, which create the impression that members of Congress are easily influenced by special interest money.

Both Sens. Christopher J. Dodd (D-Conn.) and Timothy E. Wirth (D-Colo.) have recently introduced bills that would prohibit senators from accepting speaking fees and other honorariums from special interests. Although the House last year voted to ban honorariums, beginning next year, members of the Senate still are permitted to pocket up to $26,568 in such fees per year.

“It is clear to me that the system needs reform,” Wirth said. “Steps must be taken to restore confidence in the Congress and our government. The elimination of honoraria is crucial to accomplishing this goal.”

Wirth also has joined the growing number of senators who are voluntarily forswearing honorariums. A recent survey of senators by Public Citizen, a publication of consumer advocate Ralph Nader, found that 27 do not accept honorariums. They and 16 others, for a total of 43, would accept a ban.

Wertheimer predicts that the scandal will help to break the current stalemate over campaign finance reform legislation. The last time reform was considered on the Senate floor, in 1988, the Republicans successfully filibustered a Democratic bill that would have limited political action committee contributions and provided for limited public financing.

Meanwhile, Sen. Mitch McConnell (R-Ky.), who led the GOP filibuster, has offered legislation aimed directly at some of the abuses exposed by the Keating affair. Among other things, it would deny tax-exempt status to organizations such as voter-registration groups that receive special interest donations solicited by a public official. And it would prohibit the practice that Keating used of getting all his employees to make coordinated contributions to a candidate, thus circumventing the limit of $2,000 per contributor to each congressional campaign.

Yet some senators and lobbyists are skeptical about the impulse for reform that is sweeping the Senate. Tom Korologos, a well-known lobbyist and former Senate aide, said that if the reformers have their way, “we’re going to get three kinds of people running the government--Mother Teresa, Donald Trump and Ralph Nader.”