From: riggs@descartes.tec.army.mil (Bill Riggs)
Newsgroups: misc.legal,talk.politics.misc
Subject: Re: More of the House Bank "scandal"  (was Pardon stuff...)
Date: 22 Jan 93 00:50:25 GMT
Followup-To: misc.legal,talk.politics.misc
Organization: LNK Corporation, Riverdale, MD

In article <1993Jan17.150307.456@Princeton.EDU> niepornt@phoenix.Princeton.EDU (David Marc Nieporent) writes:
>In article <1j9pj8INNa8o@tortoise.cis.ohio-state.edu> csmith@cis.ohio-state.edu (craig edward smith) writes:
>>In article <1993Jan16.181413.29338@nsisrv.gsfc.nasa.gov> dsc@gemini.gsfc.nasa.gov (Doug S. Caprette Bldg. 28 W191 x3892) writes:

(Inanity about the merits of the debaters' banks deleted)

>
>>neither did congressmen keep their money in the house 'bank'. I have YET
>>to get a list of congressmen who had positive balances (apart from the line
>>of credit which was not yet theirs).
>
>Ah, this is the "I didn't see a list, therefore it doesn't exist" method
>of debate.  Why in the world *would* you have seen such a list?  Those
>are private financial records.  I doubt it's been published anywhere.
>The only reason the "bounced" stats were published was because the
>liberal media (sic) was busy bashing a Democratic Congress for minor
>non-criminal matters while obstruction of justice was being ignored *at*
>Justice.

	Ah, but we DID get a list, official and all, released last year.

	Just to set the record straight, THE WASHINGTON TIMES, which broke
the House Bank story, does not generally get characterized as the "liberal"
media. I suppose that if it had not become a big enough issue (mainly due
to CSPAN), the rest of the media herd would have afforded themselves the
opportunity to ignore this story. But alas, the "liberal" media, being
composed of profit taking institutions, found the financial rewards
great enough to go against its ideological incentives, and cover the story.
And when the public found out about this disgraceful episode, the phones
rang off the hooks in Congressional offices until, with a very deep
groan, the House leadership coughed up the stats (fighting until the very
end NOT to do so). In this case, John Q. Citizen, not the media establishment,
was the one "bashing" Congress.

>
>>>>Now we get to the crux of the matter.  The upshot of this whole fiasco
>>>>is that congress has demonstrated that they are unwilling and/or
>>>>unable to properly manage money.  Why on earth should they be conscientious
>>>>and careful about how they spend the taxpayers' money if they're not
>>>>held accountable in their personal finances?
>
>>>I am also inclined to point out that the public outcry associated with this
>>>tempest in a teakettle motivated the House to devote a whole lot of their
>>>time to dealing with the House bank 'scandal', while the rest of the 
>>>country continued to go to hell.  Of course, had the House been able to give
>>>their full attention to the rest of the country they might well have made 
>>>things worse.
>
>>Seems to me the only time when the country is in danger of getting worse is
>>while congress is in session. It could be that the increased scrutiny due
>>to the scandal was all that was needed to get congress to be more careful
>>about its spending habits and start the economy on its way back up,
>>which started last March or April, or so we are told by the media . . .
>>AFTER THE ELECTION!
>
>I really doubt Congress "changed its spending habits" in April, since
>the budget isn't passed in April.

	The Congress had many, many, many excuses not to act professionally
or responsibly last year. 

	1. Election year - EVERYBODY knows you CAN"T MAKE IMPORTANT DECISIONS
	IN AN ELECTION YEAR.
	
	2. George Bush - 12 years of blahh, blahh, blaah - EVERYBODY KNOWS
	YOU CAN'T GET A DEMOCRAT MAJORITY TO COOPERATE WITH A REPUBLICAN
	PRESIDENT. Didn't stop them from making the budget deal with George,
	when George was popular and HE had all the goodies to give out !!

	3. The Bank Scandal was yet another excuse to play politics and ignore
	the public's business.

	But the excuses just aren't there NOW, are they ?

	And by the way, I see no reason why the budget CAN'T be passed in 
April - seems to me that the less time Congress has to add its own 50 billion
dollars worth, the better off we'll all be !
	
>
>>>Note, that reports of 'bounced' checks were COMPLETELY false, as none of the
>>>checks in question were returned (bounced) for insufficient funds.
>
>>Suppose they had been returned--who would have caught flack? You would have
>>seen the man running the bank out on is rear end so fast. . . And then
>>replaced with someone who would do it 'right' (read: the way they want it
>>done)! The house knew all along what was going on, and didn't mind this extra
>>perk, despite that it was done with TAXPAYER MONEY, NO FELLOW CONGRESSMEN'S
>>MONEY!
>
>Why do you keep saying this?  It isn't true.  It WAS NOT TAXPAYER MONEY.

	He keeps saying this because it is true.

	1. Last time I checked, the taxpayers pay the congresscritters with
	their taxes (financial liabilities,too). The "bank" was, in fact, the
	payroll office for the members of the House. Essentially what the
	members were doing was to advance their pay with no interest charged,
	by writing overdrafts which the bank honored through a financial
	arrangement with Riggs Bank of Washington, D.C. (Sorry, no relation -
	my family is from Kentucky). Technically, the House Bank could and did
	borrow money from Riggs when it needed to, to cover its costs, which 
	included administration.

	2. The staff of the House Bank, were, of course, government employees.
	It is possible to for the government to run its affairs through 
	nonappropriated funds - but it appears to be the case that the 
	house bank's staff was paid out of the House's administrative budget,
	which is supported by your tax dollars, and mine. 

	But operating the House Bank from nonappropriated funds would
	have been problematical. "NAF" accounts, as they are know in the 
	military, are heavily audited, and inproper use of nonappropriated
	funds was what got Oliver North and John Poindexter in hot water.


>They weren't returned because the "bank" had a POLICY of covering
>overdrafts.  So do *lots* of banks.  Mine offers me overdraft
>protection.  It also pays interest.

	No, the checks were returned to them members because the House Bank's
accounting procedures were so shoddy that it was forced to have the Sergeant
at Arms send them up to each member's AA as "proof" that they had been written,
and not covered by sufficient funds. One reason for some of the high debits
was that, understandably, there were discrepencies between the members'
records and the House Banks'. This is why the House Bank was closed - these
practices could not stand public scrutiny, not in a twentieth century economy,
in which you can get a current balance just by checking your local money 
machine.

>
>>>Moreover, since the House members knew the checks would be honored, they did
>>>NOT attempt fraud.  No one receiving an overdrafted check was at risk for
>>>being deprived of goods or services under false pretenses.  Everyone to whom
>>>the Members wrote checks received their money.
>
>>So either it was fraud, or it was a perk that no one else gets (as if they
>>needed any more). None the less, lack of financial accountability is clearly
>>shown in the running of the 'bank' and therefore we cannot trust congress
>>with financial accountability in the spending of our tax money.
>
>You're still making this up.  ANYONE IN THE WORLD can get this perk.
>It's called overdraft protection. 
>
>As for lack of financial accountability, why do you say this?  They
>*knew* that the checks would be covered.  So how is it irresponsible to
>write a check you know will be covered?

	Trust us on this one. If the congresscritters had been charged interest
for "pay in advance", do you think that they would have knowingly kept huge
negative balances for months at a time ? Do you think that these people manage
their own affairs as badly as they manage the U.S. Treasury ?

The 8th line on the .sig, if you please. BTW, the reference is NOT to the U.S.
Congress in 1992/93, of course, but to the Walpole prime ministership, 
the first experiment in parliamentary government in Great Britain. (Cromwell
doesn't count). A few lines later, Swift wrote "In Princes never put thy
Trust," but it looks like he didn't trust parliamentarians much, either.

Moral of the story: There's no lesson like an old lesson.


Bill R.

--

"When up a dangerous faction starts,         "My opinions do not represent
With wrath and vengeance in their hearts;     those of my employer or
By solemn League and Cov'nant bound,          any government agency."
To ruin, slaughter, and confound;             - Bill Riggs (1992)
To turn religion to a fable,
And turn the Government to a Babel;
Pervert the law, disgrace the gown,
Corrupt the senate, rob the crown;
To sacrifice old England's glory,
And make her infamous in story.
When such a tempest shook the land,
How could unguarded virtue stand ?"
- Jonathan Swift (1732)