Third Ex-Lawmaker Indicted In House Bank Scandal
Feb. 23, 1995
WASHINGTON (AP) _ Former Rep. Mary Rose Oakar was indicted Wednesday on charges of lying to the FBI, filing false financial statements and using the now-defunct House bank to convert public money to her own use.
She hired a prominent defense attorney and said, ``I expect to be fully vindicated.''
Oakar was indicted on seven counts, including conspiracy. One of her nephews, Joseph DeMio, also was indicted on a conspiracy count. Another nephew, Ignatius DeMio, agreed to plead guilty to a conspiracy misdemeanor.
Both nephews worked for Oakar as campaign aides in 1992.
Oakar, D-Ohio, was the third former member of Congress charged in connection with the scandal, which led to her defeat in 1992 after 16 years in the House of Representatives.
An internal House inquiry found that she had written 213 bad checks over three years. Those were among thousands of overdrafts written by lawmakers at the in-house bank, but almost all of the other bad-check writers were cleared by a special Justice Department inquiry.
If convicted of all seven counts, Oakar could face up to 40 years in prison and a $1.7 million fine.
In a prepared statement, Oakar attacked the ``selective prosecution by retired, Nixon-appointed ex-Judge Malcolm Wilke and his partisan prosecutors,'' and said, ``At the appropriate time the full truth will speak for itself.''
Wilke, a former federal appellate judge, probed the House bank problems in 1992 as a Justice Department special counsel.
``There is no substance to these false and misleading charges,'' Oakar said the statement read by aide Tom Albert. ``I have never, ever profited from my public service....''
Oakar hired attorney Kenneth Mundy, who defended Washington Mayor Marion Barry against drug charges and who was part of the defense team for former House Ways and Means Committee Chairman Dan Rostenkowski, D-Ill., in another case.
The crux of the indictment involved a $16,000 bad check written on Oakar's account at the House bank. Oakar also was charged with filing a false statement when she did not list a $50,000 loan on her 1991 financial disclosure form.
The loan was used in part to pay the settlement costs on a town house in the Georgetown section of Washington.
That transaction led to a House ethics committee investigation, because the home was purchased jointly by Oakar and an aide who was given a $10,000 raise the same month they made the purchase.
The indictment also charged Oakar with lying to the FBI about asking the House bank to stop payment on three checks; making false statements in reports to the Federal Election Commission, and making false statements in a letter dated May 1992, which she gave to the FBI in December 1994.
Joseph DeMio, of Cleveland, was charged with conspiracy and making false statements to the FEC.
The indictment said Oakar, Joseph DeMio and another, unnamed person, contacted people who had not donated to Oakar's campaign and asked permission to use their names on the FEC campaign reports. They filed forms with the phony names.
Another part of the alleged conspiracy involved a $28,000 loan taken out by an unnamed third party and converted into campaign money using $1,000 money orders. It is illegal for any individual to give a congressional candidate more than $1,000 per election.
Ignatius DeMio, of Strongsville, Ohio, agreed to plead guilty to a single misdemeanor count of conspiring to violate federal campaign laws. He agreed to cooperate with the prosecution, and the government agreed to recommend no imprisonment other than home detention if he provides ``substantial assistance'' in the case.
The plea was not entered Wednesday.
The bad-check scandal ended Oakar's congressional career.
Already headed for a tougher-than-usual campaign because redistricting had thrown more suburbanites and Republicans into her territory, Oakar was challenged by six fellow Democrats and barely survived the 1992 primary.
Contributors stayed away and she had to take out loans to run. As 1995 began, she was still more than $223,000 in debt.
She lost to businessman Martin Hoke, a political unknown who turned the campaign into a referendum on Oakar and, on Election Night, ordered his victory party band to strike up ``Ding-Dong, The Witch Is Dead.''
Hoke said ``the indictments handed down today proved once again that this is a government of laws, not people, and no one is above the law.''
The department's House Bank Task Force, formed in December 1992 to investigate widespread writing of checks with insufficient funds, has brought other cases against:
_Former Rep. Carl ``Chris'' Perkins, D-Ky., who pleaded guilty in December to defrauding the House Bank and other financial institutions but has not yet been sentenced.
_Former Rep. Carroll Hubbard Jr., D-Ky., who pleaded guilty to three felonies and was sentenced to three years in prison.
_Hubbard's wife, Carol Brown Hubbard, who pleaded guilty to a misdemeanor and was sentenced to five years probation.
_Former House Sergeant-At-Arms Jack Russ, who pleaded guilty to three felonies and is serving a two-year prison sentence.
_Martha Amburgey of Redfox, Ky., Perkins' secretary while he was in Congress. She pleaded guilty to conspiracy to file false statements with the FEC and aiding and abetting bank fraud by check kiting. She has not yet been sentenced.