Tod Lindberg

Jim Wright’s Wrongs

Posted by Tod Lindberg on August 1st, 1995

The American Spectator

In the torn-up note found in his briefcase after he turned up dead, an apparent suicide, Vince Foster offered this parting reflection on life in official Washington: “Here, ruining people is considered sport.” We do not know if Foster considered himself already ruined, or was worried about someone ruining him. We do know, though, that the ranks of the ruined in Washington are legion. And every day, there are some–in Congress, in the press, in advocacy groups, in public-policy non-profits–who dream about the next ruination.

Most of these dreams today center around Newt Gingrich. Ethics complaints about the Speaker are seemingly endless, and there is a delicious irony in the fact that it was Gingrich who launched the unrelenting, incendiary ethics attacks on Jim Wright, one of his predecessors. Wright’s ignominious resignation of the speakership in 1989 marked the start, in a way, of Gingrich’s meteoric rise–so it would be good sport if the same kinds of charges brought Gingrich down as well. That $4 million book deal, for example–how could that fail to remind us of Jim Wright’s own book deal, one of the central points in the ethics charges that brought him down?

Call it “scandal equivalence”–the idea that one fishy-smelling book deal is the same as another when you come right down to it, and that every ethical breach or crime a Republican pins on a Democrat has an equal and opposite ethical breach or crime a Democrat can justifiably pin on a Republican. As in the case of “moral equivalence” between the United States and the Soviet Union, this doctrine is a real self-esteem booster for those who would consider it distasteful to pick a side. A brief review of the fall of Jim Wright seems in order, then, if only to see what standard for ethical lapses he set.

When Wright was speaker, among the rules of conduct for members were a statutory ban on honoraria of more than $2,000 per speech, appearance or article; a rule prohibiting the acceptance of gifts whose value totaled more than $100 in a calendar year from someone with “a direct interest in legislation before the Congress”; and a rule capping “outside earned income” per calendar year at 30 percent of a member’s salary.

Insistent allegations by Gingrich and others that Wright violated these rules led to an inquiry begun in June 1988 by the House Committee on Standards of Official Conduct–the ethics committee. In the ordinary course of events, congressional ethics committees were places where even fairly heinous behavior resulted in no more than a rap on the knuckles. Party-line votes yielded no result, since the committees are composed equally of Democrats and Republicans. The urge to protect one’s own is usually overwhelming.

Although the committee took the unusual step to hire outside counsel to investigate the formal complaints against Wright, it circumscribed the counsel’s jurisdiction to the specific areas of violations alleged in the complaints, seemingly preventing a full-scale inquiry into the speaker’s wheeling and dealing. And the committee selected as counsel Richard J. Phelan, a well-heeled, well-connected Democrat from Chicago. Gingrich and the Republicans decried the whitewash they thought was sure to follow.

They were wrong. Phelan delivered a 279-page report that concluded there were some 116 instances in which Wright had broken House rules. The violations were neither minor nor technical. They looked like nothing so much as a pattern of routinely corrupt behavior–of a politician’s noting how well political power attracts money, and holding out his hand accordingly. There was cronyism and mutual back-scratching, and a judicious application of sheer clout for the benefit of friends, business partners, and contributors.

The centerpiece was Wright’s book deal, a scheme to keep extra money flowing into his personal wallet despite the cap on honoraria. The deal took advantage of an exception to the limit on “outside earned income”: royalties from the sale of books don’t count against it. Wright arranged for a long-time member of his entourage–William Carlos Moore, a former bag man for Jimmy Hoffa at the Teamsters union who had done prison time in the 1970s for income tax evasion–to publish a vanity collection of Wright’s speeches entitled Reflections of a Public Man. Moore formed the Madison Publishing Company [which published nothing else before or since], took the collection of speeches compiled and edited by Wright’s congressional staffers, and printed 20,000 copies of the slender volume with a cover price of $5.95.

Wright was to receive an astonishing 55 percent royalty on each book sold. Bookstores were not exactly overrun with customers eager to get their hands on a copy, but the book was rarely available in stores anyway. Instead, Wright’s staff promoted bulk sales to organizations that wanted Wright to speak to them. For example, he spoke at Southwest Texas State University in October 1984, according to Phelan’s report, and received a $3,000 check in return. He was over the 30 percent limit, so the university received $3,000 worth of books; Wright signed the check over to Madison Publishing, which then returned $1,650 to him–his 55 percent royalty.

This financial detour happened numerous times in 1985 and 1986–with the National Association of Realtors, Ocean Spray, the Mid-Continent Oil & Gas Association, and others. Perhaps the most entertaining was the Fertilizer Institute, which had expressed a nice, ethical desire “to do something,” as the Phelan report quoted the company, in conjunction with a speech Wright was giving–perhaps presentation of a memento of the occasion “such as a plaque, or small gift, et cetera.” But Wright was apparently less fond of plaques and Fertilizer Institute pen-and-pencil sets than he was of money. The “small gift” ended up being a purchase of $2,023 of Wright’s Reflections, of which $1,112.65 went to Wright. The speaker’s total take from the scheme from 1984 to 1987 was $54,600–all of it in sham “royalties” that violated House rules on gifts, outside income, and disclosure.

The book scheme is the best remembered part of Wright’s fall. But because the amount is not large next to Gingrich’s $4 million, Wright’s sins may seem a bit small-time now. The Phelan report shows they were anything but.

Phelan concluded that Wright had received a number of unreported gifts. One of them–an interest in a Texas natural gas well–was worth around $90,000. Wright had been allowed to buy into his investment after the well was known to be productive, but at the price reserved for the risk-takers in the initial drilling, who obviously did not know whether the well would be commercially successful. Wright also received some $150,000 in unreported and improper gifts from a long-time Texas friend and business partner, George Mallick. These gifts included a number of interest-free or sweetheart loans and use of a condominium and townhouse in Fort Worth. Wright’s wife was given use of a car and an $18,000-a-year job from Mallightco, a partnership between Mallick and Wright for which Betty Wright, according to Phelan, did no work. Phelan also concluded that in 1986 and 1987, “Wright improperly used his position in the House leadership to exercise undue influence on the actions taken by the Federal Home Loan Bank Board to control the burgeoning savings and loan crisis in Texas and elsewhere.”

By early 1989, press accounts were raising matters not even touched on in the Phelan report. There were questions about how blind the speaker’s blind trust really was, and about instances in which Wright suddenly reimbursed corporations for travel that had taken place years before. The atmosphere had all the characteristics of a media feeding frenzy. Anonymous speculation from Capitol Hill that Wright might not survive began to mount as the ethics committee met in March behind closed doors to consider the still-secret Phelan report; once again, Gingrich and other Republicans warned of a possible committee whitewash.

Once again, it didn’t happen. Although the committee did not accept all of Phelan’s conclusions–including the more volatile ones related to the distinction between legitimate “constituent service” and “undue influence” with respect to regulators–it voted unanimously to issue a five-count “Statement of Alleged Violations” that cited sixty-nine instances in which Wright broke House rules. On April 17, it also made the full Phelan report public.

Support for Wright among his Democratic colleagues had already been dwindling over the derailment of the congressional pay raise, which they understood would take effect without a vote. But Wright, pressured by overwhelmingly hostile public opinion as his ethics problems worsened, had brought the matter to a floor vote in February. It went down ignominiously–and so, eventually, did Wright. Six weeks after the Phelan report was made public, he announced his resignation during an emotional speech on the packed House floor.

Any fair reading of the history of Jim Wright and the current charges against Newt Gingrich supports but a single conclusion: the sum total of everything that has been alleged against Gingrich over many years, predating his ascendancy to the speakership, even if it is all true, is nothing next to Wright’s misconduct. There is simply no evidence of a Wright-like pattern of behavior in which public office was exploited, day-in and day-out, for private gain.

The only possible exception is the book deal. Gingrich did seem to strike it rich with that deal, and if in fact it had been part of a secret arrangement with Rupert Murdoch–whereby Gingrich would use the speaker’s office to benefit the owner of HarperCollins–then it would have been a grave matter indeed. But no one has proffered a shred of evidence that this is the case, and there is much to suggest the contrary. The book was auctioned, for example, and other publishers bid in the millions for it. Gingrich, moreover, finally settled on a royalty-only arrangement in which he bears the entire risk for the success or failure of the project, and reaps a financial reward in exact proportion to the book’s commercial value.

It seems, then, that Vince Foster was wrong. People are not ruined for sport in Washington, though those doing the ruining seem to enjoy themselves. Here, people are ruined for political reasons. And while a life lived wholly admirably and above reproach offers a defense that Jim Wright certainly did not have at his disposal, there is still the lingering question of whether, in the fetid air of scandal season in Washington, innocence is really good enough.