Rep. Hunter Is Cleared in House Bank Scandal

Rep. Duncan Hunter (R-Coronado) learned Thursday that he was cleared of any criminal wrongdoing involving his hundreds of overdrafts at the House Bank.

For Hunter, the news came an agonizing day and a half after dozens of other congressmen received identical letters from Malcolm R. Wilkey, a special counsel appointed to investigate the bank scandal.

The letter exonerates Hunter with the phrase, “I have concluded that there is no basis for pursuing a further inquiry regarding possible criminal violations concerning your account.”

Receipt of the three-paragraph missive, on stationery of the Office of the Attorney General, brings an official close to a painful episode for the six-term congressman. An outspoken conservative who ranks fifth in the House Republican leadership, Hunter has generally avoided major public blunders during his 12 years in office.

But word of the 399 overdrafts set his political world spinning.

When the House Bank scandal broke last fall, Hunter said, “Nobody has ever had a Duncan Hunter check returned for insufficient funds.” The statement was interpreted as a curt denial, but turned out to be an accurate--and carefully worded--description of how the loosely run bank worked. It routinely covered overdrawn accounts with other members’ funds.

Hunter was right: Nobody had lost any money--and the bank had operated that way for decades.

But before the House held a dramatic floor vote on disclosing the names of all members who had had overdrafts, Hunter admitted that he routinely wrote checks without sufficient funds at the House Bank--and at his California account at the Bank of Coronado.

As a self-described “industrial strength” overdrafter, Hunter paid extra for protection against bounced checks in Coronado.

To justify his overdrafts at the House Bank, Hunter pointed to a scholarship fund he had set up in 1985 to aid needy district students. Hunter said the fund, to which he has donated more than $12,000, was his way of paying for congressional “perks,” including the House Bank’s de facto overdraft protection.

The scholarship fund payments brought him into “moral balance” on the issue, Hunter said at the time.

The rationale was widely regarded as imaginative--and unconvincing.

At first, Hunter was unapologetic, arguing that the House banking rules were being changed retroactively. And he was prepared to vote against full disclosure of all overdrafters--until a last-minute phone conversation with his father convinced him otherwise.

Back in California to face voters, Hunter toured his district and set up a card table with his checks spread out for constituents to examine.

Angry voters laid into him about the checks, but also complained bitterly about the state of the region’s economy.

Hunter surprised his aides during a tour stop in El Centro by promising to turn back half his congressional pay until the unemployment rate in his district declines two points.

Using a formula that blended San Diego and Imperial County unemployment figures for April, the base rate was pegged at 9.8%.

It now stands at 11.2%

He also announced that he will pay for his congressional perks, including medical care, a health club and discount meals, at commercial rates.