Three Cabinet Members Admit to Bad Checks

Three members of President Bush’s Cabinet, led by Defense Secretary Dick Cheney, sheepishly acknowledged Tuesday that they had written bad checks on accounts at the House bank while they served in Congress--admissions that instantly changed the political complexion of the scandal.

Cheney, standing beside poster-sized blowups of bank statements and sample checks at a Pentagon news conference, said he overdrew his account 25 times in eight months. The overdrafts occurred as he was ending his five terms in the House before being named defense secretary.

Also acknowledging their link to the overdraft scandal, in which scores of current and former House members of both parties were at least unwittingly involved, were Agriculture Secretary Edward R. Madigan, who said he wrote 49 checks that were not covered by deposits in the 31 months before he left the House, and Labor Secretary Lynn Martin, who acknowledged 16 overdrafts.

Congressional Democrats took comfort from the admissions by the Administration officials. Until Tuesday, it had appeared that the Democrats--who have controlled Congress since 1954--would suffer greater political damage from the scandal than Republicans.

Some Democrats said the latest admissions would make it more difficult--if not impossible--for the President to chastise Congress for its check-cashing misdeeds and use the scandal to political advantage.

During a session with reporters, Bush tried to distance himself from the sharp attacks launched by House Republicans on Democratic leaders since the scandal heightened two weeks ago.

“What I’ve decided to do is let this matter unfold,” the President said. “Let’s get the facts out. . . . I think the American people are very smart. They will be able to make a determination as to what was wrongdoing and who were simply victims of a system that has failed everybody. We’ll just wait and see how that works out.”

As for his own check-cashing habits while a congressman from 1967 to 1970, the President said he has taken pride in not writing bad checks. But he added: “Heaven knows, with the way that the operation went up there. . . . I’d like to be able to say I didn’t do it, but I just don’t know yet.”

Hoping to regain some high ground after the damaging disclosures, House Democratic leaders indicated that they would attempt to modernize the management of the House and eliminate the politics-driven selection of officers, such as the sergeant-at-arms, who had responsibility for the bank.

Aides to Speaker Thomas S. Foley (D-Wash.) said he would meet soon with House Minority Leader Robert H. Michel (R-Ill.) in an effort to find ways to replace the traditional patronage system with a more efficient and business-like organization of support services.

Meanwhile, Rep. Vic Fazio (D-West Sacramento), vice chairman of the House Democratic Caucus, said the Cabinet members’ admissions showed that the fallout from the bank scandal was going to affect members of both parties.

“It is a bipartisan problem, with abusers and victims on both sides of the aisle,” Fazio said. “Who is to blame here? It is a very muddy question at best.”

And Rep. Dave Nagle (D-Iowa) added: “It makes it harder for them (Republicans) to say Democrats should be trashed and Republicans should be forgiven.”

Like many members of Congress caught up in the scandal, Cheney said he was “stunned” when he learned that he lacked sufficient funds to cover checks ranging from $12 to $1,945, despite bank statements showing positive balances. He pronounced himself innocent and blamed the Democratic leadership of the House for allowing the bank to be run in a slipshod manner.

Twenty-one of the checks had been located, he said, while the other four could not be found after the House Ethics Committee told him that he had 25 “problem checks.”

Cheney, who was minority whip at the time he wrote the checks, complained that his reputation had been “tarnished.” But he took no responsibility for not keeping his checkbook balanced on a daily basis, adding: “That’s not the way most people do business.”

Well aware of the political sensitivity of the information, however, Cheney said he telephoned the President on Sunday to alert him to his findings--and presumably to head off any sweeping condemnation by Bush of all those who ever wrote overdrafts at the now-closed bank.

“It is especially aggravating to be lumped together with others who were clearly abusing the system,” said Cheney, who overdrew his account by slightly more than $10,000.

Madigan, however, appeared more contrite, although he refused to allow cameras to record his statement. He said he should have paid more attention to his account at the House bank, acknowledging that he had written one check for $8,618.84 that was not covered by funds on deposit. His overdrafts totaled about $30,000. “Clearly this is an embarrassment to me, my family and friends,” Madigan said.

Martin did not appear before reporters, instead releasing a statement saying that her 16 bad checks amounted to $5,125.20. She said she was sending a check to charity for $425, the amount a commercial bank would have charged for overdrafts, “so someone at least should benefit from this embarrassing episode.”

Martin said her largest overdraft was for $1,350 to a local savings and loan.

In a related development, Rep. Bill Goodling (R-Pa.) said he is the 24th lawmaker identified on a leaked list of House members labeled by the Ethics Committee as the worst abusers of the casual banking system run by the House until last Dec. 31. He had 439 overdrafts in 11 months.

Like others on that list, however, Goodling said his own records showed that he wrote far fewer checks against insufficient funds than the committee found. He is the third incumbent Republican on the list of “abusers” compared with 16 current Democratic members of the House.

The House voted last week to disclose the names of 355 current and former House members who wrote checks without enough funds on deposit to cover them. The identities of the worst 24 were to be made public Monday, while all others who had even a single overdraft were to be listed about April 2.

Meantime, U.S. Atty. Jay Stephens commented on the announcement Monday that his office was investigating to see whether any laws were violated in the bank scandal.

He told reporters that he had a responsibility to enforce local laws in the District of Columbia, where it is a crime to knowingly write a check with insufficient funds.

But in view of the House bank’s willingness to tolerate overdrafts because a member’s salary is virtually guaranteed, it could be hard to prove a crime under that law, one legal expert said.

Another source familiar with Stephens’ inquiry said he believes the inquiry is still in the fact-gathering stage. FBI sources said the bureau is not involved yet, indicating that the investigation is still in a preliminary stage.

Times staff writers James Gerstenzang and Ronald J. Ostrow contributed to this story.

(Southland Edition, A8) HOUSE CHECKS: Overdrafts totaling $170,685 by former Rep. Jim Bates of San Diego are the highest of any California representative. B8