Intense Talks Reported in Rostenkowski Case : Congress: Plea negotiations don’t hinge on keeping him out of jail, sources say. A tentative decision would have lawmaker quit the House.

Efforts to reach a plea bargain in the federal fraud case against Rep. Dan Rostenkowski (D-Ill.) intensified Tuesday, with agreement no longer hinging on keeping the powerful chairman of the House Ways and Means Committee out of jail, sources familiar with the negotiations said.

Tentatively decided is that Rostenkowski, who has been expected to play a central role in President Clinton’s health reform efforts, would resign from Congress.

Under discussion is how much time U.S. Atty. Eric Holder would recommend that Rostenkowski serve in prison and whether U.S. District Judge Norma H. Johnson would be bound by that recommendation, the sources said.

The negotiations grew from a traditional meeting with prosecutors at which defense attorneys are given an opportunity to argue why their client should not be charged. They have been under way since it became clear that Holder intended to ask a federal grand jury to indict Rostenkowski on charges of misusing his office for financial gain.

Sources in and out of government estimated the chances that a plea bargain would be reached at 50-50.

The federal grand jury to which Holder would present any proposed charges is scheduled to meet Thursday, but the plea discussions, if they continue, could push the matter over to next week, one source said. Another, describing Rostenkowski as headstrong, said the discussions could collapse, clearing the way for action Thursday or next Tuesday.

The advantage to the government in a plea bargain would be avoiding a long and expensive legal process with no certainty of conviction, while achieving the “symbolically important” goal of putting in jail, even for less than a year, a lawmaker who admitted corruption as part of the agreement.

For Rostenkowski, the agreement would offer a chance to avoid the humiliation of a public trial and the prospect of a possible conviction and long sentence, which could result even if he were convicted on only one of possibly multiple felony counts.

Dismissing reports that the plea negotiations still focus on whether Rostenkowski would step down as chairman and would have to serve time, one source said that the chairman’s lawyer, Robert S. Bennett, is engaged in “damage control,” trying to ensure that his client’s time behind bars would be limited.

Rostenkowski’s resignation from the House appears to be a “very live option,” one well-placed Democrat said. His departure would avoid the possibility of a censure resolution and foil attempts by Republicans to force the House Ethics Committee to investigate Rostenkowski and others allegedly involved in misuse of the now-defunct House post office.

The Ways and Means chairman is alleged to have converted $22,000 in postage stamps from his office accounts into cash for his personal use through the post office. Rostenkowski also is alleged to have paid employees for work they did not do. He has denied wrongdoing.

If Rostenkowski is indicted on felony charges, rules of the House Democratic Caucus would require him to step down as chairman, although he could continue as a member of the panel.

But associates said Rostenkowski would resign from Congress if he had to give up his chairmanship.

“He’s a control freak,” one Democratic aide familiar with Rostenkowski’s views on the subject said. “He wouldn’t want to stay around if he wasn’t in control of the committee.”

Justice Department guidelines for federal prosecutors state that resignation from office is among “appropriate and desirable objectives in plea negotiations with public officials who are charged with federal offenses that focus on abuse of the office involved.”

Although resignation “shall not be imposed involuntarily against the will” of a member of Congress, an offer of resignation “may be incorporated into plea agreements,” the guidelines state.

The high political stakes and spillover from the Rostenkowski case were made clear Tuesday by House Minority Whip Newt Gingrich (R-Ga.), who noted that defense lawyer Bennett also is representing Clinton in a sexual harassment complaint brought by former Arkansas state employee Paula Corbin Jones.

“Clearly, when you have the President’s lawyer negotiating with the Justice Department over a national health care leader,” Gingrich said, “the American people have some cause to wonder what’s going on.” He said the great concern among Republicans is that White House political interference with Rostenkowski’s case would prevent justice from being done.

“What we’re concerned about is some sort of strange plea-bargaining taking place in which political pressure could be brought to bear,” Gingrich said. “You can’t have one of the most powerful members of the House having the same lawyer as the President at this critical moment being involved in a plea bargain and not say anything about it. This is a very serious matter of public ethics and it needs to be dealt with in a manner that restores public confidence, not undermines it further.”

Rostenkowski “doesn’t want to go to prison,” said a Democratic colleague, indicating why it may be difficult for Rostenkowski’s lawyers to reach a plea bargain with federal prosecutors.

On the other hand, a plea bargain that does not include prison time or a resignation would trigger demands from Republicans, and some Democrats, for a tough censure resolution and demands for an Ethics Committee investigation that probably would be approved by the House.