Rostenkowski Expected To Resign in Plea Bargain

INFLUENTIAL Democratic Congressman Dan Rostenkowski would plead guilty to a felony under an agreement being discussed with prosecutors, congressional and legal sources said Tuesday.

The plea would cost him his House Ways and Means Committee chairmanship and probably lead to his resignation, they said.

House Democratic Caucus rules would force Mr. Rostenkowski to step aside as chairman of Ways and Means - a crucial panel in the consideration of President Clinton's health care legislation - if he were indicted for a felony that carried a prison term of at least two years.

Plea negotiations resumed Tuesday between Rostenkowski lawyer Robert Bennett and the US attorney's office. Nothing was resolved and chances for an agreement were described as ``50-50.''

``In the event of a plea agreement, it is inconceivable that Congressman Rostenkowski could remain as chairman of the committee and his continued representation in Congress is most unlikely,'' said a source close to the negotiations, who spoke only on condition of anonymity.

Sources close to the discussions said the negotiations are stuck over ``the wording'' of an agreement, ``how the alleged wrongdoing is described.''

The United States attorney's office has been investigating the Illinois Democrat's use of office and campaign accounts, including the possibility that he received money improperly from the House Post Office, hired ghost employees, and made improper furniture and gift purchases from his official funds.

Whitewater figure loses race

JIM McDougal, a key figure in the Whitewater controversy involving President Clinton and Hillary Rodham Clinton, lost his bid for a seat in Congress Tuesday, finishing third in a three-candidate Arkansas Democratic primary.

Mr. McDougal portrayed himself in speeches and campaign advertising as a staunch Democrat victimized by Republicans, including Presidents Ronald Reagan and George Bush and their appointees in the thrift regulatory agencies.

In the late 1980s, McDougal was removed by federal regulators as chief executive of Madison Guaranty Savings and Loan, which eventually failed at a cost to taxpayers of at least $47 million. President and Mrs. Clinton, who were friends of McDougal and his wife, joined them in 1978 as investors in a real estate development called Whitewater, which Madison Guaranty underwrote. McDougal was indicted but acquitted of bank fraud in the collapse of Madison Guaranty. McDougal's attorney has said that he expects McDougal will be indicted again.

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