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Reading Rosty

On the occasion of his death; relevant excerpts from and for the record. Links added for clarification and background.

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Book: American Pharaoh
Authors: Adam Cohen and Elizabeth Taylor
Excerpt: "Before [Martin Luther] King's Chicago Campaign was over, Dan Rostenkowski would suggest to presidential aide Lawrence O'Brien that the White House find an assignment that would take his friend Daley 'out of the country for a week or two.' Rostenkowski was 'most concerned,' he told O'Brien, about the toll the civil rights campaign in Chicago was having 'on the mayor personally.'"

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Book: Fire on the Prairie
Author: Gary Rivlin
Excerpts: "For a time after Daley's death Rostenkowski was Chicago's top political figure nationally. 'A case study of the dangers of getting in over your head,' the Washington Monthly wrote when ranking Rostenkowski among the country's six worst congressman based on the views of fellow congressmen, lobbyists, staffers, reporters, and others. 'Hogs get slaughtered but pigs get fat,' he explained to a New York Times reporter.

"Yet the local media treated him with an affection and respect that bordered on reverential."

*

"Congressman Dan Rostenkowski was one notable no-show; confronted by reporters, he hemmed and hawed about endorsing Washington. The burden falls on Washington, Rostenkowski said, to convince white voters he's for all people, not just black Chicago.

"Only after influential House Democrats reminded him that he needed their support as chairman of the House Ways and Means Committee did Rostenkowski endorse Washington. Still, precinct captains who were part of his ward organization went door-to-door on Epton's behalf."

*

"The nonpartisan election was an old idea that independents floated from time to time. After the 1983 election the regular Democrats adopted it. Petitions were passed out on the southwest and northwest sides; among those supporting the drive were Dan Rostenkowski and fellow Congressman William Lipinski, both allies of Rich Daley. 'It's the only way Rich can run for mayor,' a top Daley adviser, requesting anonymity, told the Tribune."

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Book: Bashing Chicago's Traditions
Authors: Melvin Holli and Paul Green
Excerpts: "When U.S. Congressman Daniel Rostenkowski endorsed Washington's mayoral opponent Thomas Hynes, Washington spat out, 'Was he driving when he said that?' It was a snide reference to the solon's recent arrest on drunken driving charges."

*

"Congressman Daniel Rostenkowski and William Lipinski (long-time Daley stalwarts) claimed that Hynes could beat both Washington and Byrne in a three-way 1983 rerun."

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Book: Here's the Deal
Author: Ross Miller
Excerpt: "Swibel and his group had already induced Congressman Rostenkowski to write an unprecedented exclusion into 1980 federal tax legislation that allowed them to build more than two thousand units of luxury housing with low-moderate-income HUD rental subsidies on the old West Side renewal land, formerly called Madison-Canal."

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Book: Rogues, Rebels, and Rubber Stamps
Author: Dick Simpson
Excerpt: "One controversial proposal that recurred several times during the Byrne years was the Presidential Towers apartment building project. Land for the project was bought from Byrne confidant and supporter Charles Swibel, who was a banker, real estate speculator, and chairman of the Chicago Housing Authority Board.

"The Presidential Towers project was put together by business partners of powerful congressional Ways and Means Committee chairman Dan Rostenkowski, who supplied the special federal tax breaks to make these politically well-connected developers rich. Although the poor were displaced by this development, the city council approved it in a series of contested and divided roll call votes."

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Book: Fire on the Prairie
Author: Gary Rivlin
Excerpt: "Byrne and Rostenkowski were the project's most influential benefactors. One of the three developers was Daniel Shannon, a former business associate of Rostenkowski's and manager of the congressman's blind trust portfolio. The $159 million loan Rostenkowski won for Presidential Towers represented about sixty-two percent of all federal money made available in 1983 for subsidized developments. The city floated a $180 million bond to provide an additional low-interest loan."

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Book: The Great American Tax Dodge
Authors: Donald L. Barlett and James B. Steele
Excerpt: "The new era of rampant special-interest tax breaks was defined by the Tax Reform Act of 1986. Amid blasts of rhetoric from lawmakers as to how they were routing special interests and making the tax code fairer for middle-class America, tax-law writers working behind the scenes crammed the legislation with hundreds of clauses benefiting a handful of taxpayers.

"Dan Rostenkowski, the Illinois Democrat who chaired the House Ways and Means Committee, called the tax reform measure 'a bill that reaches deep into our national sense of justice - and gives us back a trust in government that has slipped away in the maze of tax preferences for the rich and powerful.'

"Then Rostenkowski inserted dozens of special provisions, including one worth at least $150 million to Commonwealth Edison Company, the utility serving Rostenkowski's native Chicago."

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Book: America: What Went Wrong?
Authors: Donald L. Barlett and James B. Steele
Excerpts: "But the idea of an excise tax on securities transactions has been blocked each time it has come up in Congress . . . Dan Rostenkowski, the Illinois Democrat and committee chairman: 'I am on the record as being generally unsympathetic to such taxes . . . such a tax would raise serious questions about our ability of our nation to compete . . . '

"From 1980 through 1990, Rostenkowski collected $37,000 in speaking fees from the Chicago Board of Trade. And $22,500 from the Public Securities Association. And $20,000 from Citicorp-Citibank. And $19,500 from the American Stock Exchange. And $18,000 from the American Bankers Association. And $15,500 from the Securities Industry Association.

"He picked up $15,000 from the National Venture Capital Association. And $15,000 from the CL Global Partners Securities Corporation. And $14,500 from the American Council for Capital Formation. And $13,000 from the Midwest Stock Exchange. And $10,000 from the Exchange National Bank of Chicago,

"Add up the honoraria and the total comes to $213,500 for the eleven years. And that's just from twelve organizations - all with a direct stake in the Internal Revenue Code in general and the imposition of new taxes, such as an excise tax, in particular. Over the eleven years, Rostenkowski pulled in $1.7 million in speaking fees or honoraria from businesses and organizations with an interest in tax legislation.

"To put that sum in perspective, consider this: The $1. million that Rostenkowski received from groups seeking favored treatment was double the amount of money that he received for serving in Congress."

*

"[I]n the summer of 1991, Rostenkowski introduced legislation to simplify the tax code that included a deduction for goodwill. Financial analysts have predicted that it will be part of any tax package enacted in 1992. If so, the goodwill deduction will give a boost to another round of corporate takeovers and result in the further elimination of jobs and additional lost tax revenue running into the billions of dollars."

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Book: America: Who Really Pays The Taxes?
Authors: Donald L. Barlett and James B. Steele
Excerpt: "[Rostenkowski's] work prompted one financial publication to label the budget legislation 'The Investment Bankers Relief Act of 1993.'"

*

Note: This book details several other tax breaks for rich people and industries that Rostenkowski slipped into tax legislation while spewing rhetoric about helping the middle-class, but those deals are too complicated to retell here. Let's just say that Barlett and Steele single out Rostenkowski as the man most responsible for tax-writing during his time as Ways and Means chairman and most responsible for loading up the tax code with what we could call today "earmarks" - always for the wealthy and influential, never for the everyday Chicagoans (and Americans) Rostenkowski supposedly represented.

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Book:Rostenkowski: The Pursuit of Power and the End of Old Politics
Author: Richard E. Cohen
Excerpts: "According to the federal indictment, he had 'engaged in in a pattern of corrupt activity for more than 20 years.' He was said to have used his official accounts to pay for personal expenses that ranged from cleaning his Washington apartment to taking photographs at his daughter's wedding. Worse, prosecutors charged he had converted House of Representatives Post Office stamps into cash, which he used to line his pockets. To an angry public, the indictment fit the worst stereotypes of Chicago politicians. The charges 'represent a betrayal of the public trust for personal again,' said U.S. Attorney Eric Holder."

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"He did not deny he had placed on his payroll family members of longtime pals: they kept the grass clipped at his Wisconsin lake house much as Rostenkowski's twin sisters and four daughters had sometimes performed make-work tasks on the payroll of other Chicago pols 'Did I put a kid on my payroll because he was my buddy's son?' he said later, with a rhetorical shrug. 'Did I expect him to do some work? Yes, but not a lot.'

"Likewise, he had directed his staff to make official purchases such as glass sculpture and wood-backed chairs from the House stationery shop; these he gave as gifts to supporters and dignitaries.

"In Rostenkowski's mind that was both perfectly legitimate and no big deal for a sultan of Congress. Indeed, he was proud that many years earlier he had helped to expand the legions of staff courtiers and official perks for his colleagues."

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Book: Mr. Chairman: Power in Dan Rostenkowski's America
Author: James L. Merriner
Excerpts: "As a rule, the more charges that prosecutors throw at a defendant, the weaker their case; the fewer, the stronger. Multiple charges are a device to induce a plea bargain. But these seventeen charges were plangent with vivid specifics of wrongdoing. The plea bargain had already been spurned. Only a rare jury would acquit on all seventeen.

"Holder said fourteen ghost workers were paid $529,000 over a twenty-one-year period for doing little or no official work while providing personal services for Rosty such as cutting the grass at his Wisconsin home or keeping the books at Confidence Insurance. The indictments listed the ghosts by number, but the Sun-Times promptly named them in the next morning's edition.

"Further, Justice charged Rostenkowski with $101,767 in a fraud to get seven personal vehicles disguised as 'mobile district offices,' with $1,800 in House-paid parking garage fees tossed in for good measure. Also, he was accused of pocketing $49,300 in stamps-for-cash scams and taking $42,200 in stationery store items. In total, the chairman allegedly misused $724,267. Of this sum, $668,000 came from taxpayers and $56,267 from campaign funds.

"The government leveled no charges on Rosty's practice of paying himself and family members rents for family-owned property. Nor did it accuse him of income tax evasion. Some, until they read the forty-eight page indictment, took the latter omission as a sign of weakness in the government's case. Rather, it was a deliberate act to keep the trial in Washington. In a previous prosecution of a Louisiana congressman, the defendant exercised his right to be tried in the jurisdiction where his tax returns were filed, whereupon a hometown jury acquitted him. Holder was not about to let Rosty move the trial to Chicago.

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"[F]or the most part, Rosty's use of ghosts seemed petty, abusive, tyrannical. Roger A. Kopacz, an electrical inspector, married Kristie Rosten in 1980. Before joining the family, Kopacz was required to hand over most of his $10,400 ghost pay to Rostenkowski as cash kickbacks."

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"In another specimen of machine money churning, the son of a state senator got $48,400 in ghost pay over three years while Rosty's daughters Stacy and Dawn received $48,000 from the senator's payroll."

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"Washington mourned the chairman's fate. Al Hunt of the Wall Street Journal said Washington 'will not see his like again.' Russell Baker of the New York Times said he was 'under indictment for everything from mopery to failing to wash the ring out of the bathtub.' Jon Margolis of the Chicago Tribune scorned they 'pygmies trying to bring down a giant.' David S. Broder of the Washington Post, the most respected and respectable of the pundits, wept over his keyboard: '[T]he reaction is one more of tears than of anger. Maybe that's just a relection of the stunted moral character many citizens impute to the capital. I prefer to think that it is Washington's appreciation of the rarity of people like Rostenkowski with a passion not just to win elections but to govern.'"

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"The Tribune, the dominant newspaper, endorsed Rostenkowski of course, but so did the Sun-Times, editorially sneering at its own reporters' revelations of the incubment's thefts. Both papers said he was an indispensable civic asset. Rosty's performance at the Sun-Times editorial endorsement meeting was a virtuoso smash of charm and swagger as he spun stories about Dick and Lyndon. He simply wowed the editors."

*

He lost the election.

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"He set up Danross Associates Inc., consultants in 'legislative and governmental affairs,' working at first out of the North Michigan Avenue office of Michael Segal, head of Near North Insurance, former business partner of George Dunne, investor with Rosty in Wisconsin real estate, and all-around machine fixer . . .

"Government documents in the investigation of the Hotel Employees and Restaurant Employees International Union later indicated that union president Edward T. Hanley, an old Rostenkowski friend, had provided Danross a $50,000 consulting fee for a single memo."

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"Robert L. Russo was accused of lying to the grand jury to cover up his ghost job . . . Testimony revealed how Rostenkowski used Damen Avenue has a hiring hall. He would rotate relatives and neighborhood folks on and off the payroll for months at a time, sometimes collecting each worker's pay for the whole year while dribbling out cash to one and all. "

*

"Haltingly, with rain splattering the sheet of paper, Rosty read a statement: 'I'd like to emphasize that I pled guilty to the least serious charges set forth in this indictment . . . I personally have come to accept the fact that sometimes one person gets singled out to be held up by law enforcement as an example.'"

*

"Officialdom grieved. A Republican elder told a reporter, 'What happened to Danny is the same thing that happened to Nixon. The rules changed and they didn't.' Such an opinion could not survive scrutiny of the record in either man's case."

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Comments welcome.



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Posted on August 11, 2010


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