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Growing Call For Ethics Investigation Of Henry Hyde

by Jeff Elliott

new details about Hyde and the failed S&L
The Chicago Tribune last month joined a growing call for Rep. Henry Hyde (R - Illinois) to answer questions about his past ethical behavior concerning a failed S&L, as well as explaining an apparent recent attempt to coverup the investigation of a prominent critic.

Hyde -- chairman of the House Judiciary Committee and the congressman who demanded from President Clinton "complete and specific" answers to 81 questions concerning the Lewinsky affair -- has given conflicting and incomplete explanations about his 1995 employment of Chicago private eye Ernie Rizzo.

The detective was hired to investigate Tim Anderson, an Illinois banking consultant who has given media interviews detailing Hyde's extensive role in the failure of Clyde Federal Savings and Loan, where the congressman was a director from 1981-84.

Hyde first told Tribune reporters in mid-October that "I know [the detective] interviewed Anderson. I was apprised of the results of that interview... I didn't hire him. I didn't pay him. I didn't direct him." Hyde added that "a mutual friend" who "thought he was helping me" had retained detective Ernie Rizzo without his prior knowledge. Hyde claimed that he couldn't remember his friend's name.

But after further prodding by reporters and a formal request for an ethics inquiry from a watchdog organization, Hyde admitted through a spokesman that his personal lawyer had ordered a "background check" on Anderson, paid for the detective, and that Hyde had reimbursed his attorney.

Congressional Accountability Project request for investigation
Even if Hyde's first explanation was an honest mistake, the Chicago Tribune noted that the congressman's behavior raises serious ethical questions. Hyde's spokesman said that the congressman paid Rizzo $2,000, but the detective told the Roll Call newspaper that such a two month investigation would typically cost about $10,000.

According to Gary Ruskin, Director of the Congressional Accountability Project, this is a violation of House rules on receiving gifts. "In effect, this gift of private investigative services is no different from someone paying a portion of Chairman Hyde's legal fees," Ruskin noted in their call for an inquiry.

Said Ruskin, "Even if Rizzo was hired without Chairman Hyde's knowledge, if Chairman Hyde received the fruits of gift of services, then he would have had the responsibility to report the gift to the Ethics Committee, and to dispose of the gift in an appropriate fashion."

Ruskin asked the House Ethics Committee to appoint an investigative subcommittee and an outside counsel to determine the source of the gift of services to Chairman Hyde, the cost of the gift, and whether Chairman Hyde violated the rules on taking gifts.

Hyde's hometown newspaper, the Chicago Tribune, added that the House particularly needs to conduct an inquiry because of Hyde's guiding role in the impeachment hearings. "An investigation as momentous as a presidential impeachment probe is ill-served by clouds hovering over the head of the committee doing the investigating. And the silence of the Ethics Committee in this matter is deafening."

But without broad public outrage, it's doubtful that the Ethics Committee will even consider investigating Hyde; as MONITOR reported in a September news series on House ethics violations, the Congressional Accountability Project complains that the Gingrich-led 105th Congress has a pattern of shielding members of the House from charges of corruption. "The Ethics Committee only benefits 435 very powerful people -- that's why it doesn't get changed," says Ruskin.

to Flashpoints on KPFA, weekdays at 5PM Pacific Time
Rizzo was also interviewed by radio journalist Dennis Bernstein, who has produced several reports on the investigation of Tim Anderson, as well as the collapse of the Clyde S&L (see companion article). Anderson told the Tribune that the covert 1995 probe of his background is a sign Hyde is "trying to revive McCarthyism."

In his "total and complete investigation" of Tim Anderson, Rizzo spent two months, even impersonating a TV news producer to trick Anderson into turning over 388 pages of documentation about Hyde's involvement with the savings and loan. Using his fake name identity, Rizzo met with Anderson twice and spoke to him many times on the phone.

Rizzo told Bernstein that he found Anderson knowledgeable about the facts of the Clyde case and apparently outraged over the approximately $70 million bailout costs paid by taxpayers.

Citing Illinois confidentiality law, Rizzo again refused to say exactly how much he was paid, and declined to provide details of the investigation beyond general statements that he interviewed "quite a few people."

Rizzo additionally told Roll Call that he was paid with a cashier's check mailed by Hyde's lawyer, James Schirott.

previous MONITOR article about Henry Hyde's controversial past
When Hyde's spokesman tried to explain why the congressman couldn't remember his mysterious "mutual friend" who hired Rizzo, the answer was convoluted: "[Hyde's] immediate response was that a friend hired Mr. Rizzo. Mr. Schirott is a lawyer and a friend, and Mr. Hyde's response was correct."

Hyde and Schirott do indeed have a past. The $2,000 for Rizzo was part of a single payment of "more than $20,000" to attorney Schirott, who has represented Hyde for years.

Schirott is a controversial figure in his own right. In 1995 -- the same year as the Anderson investigation -- a formal mental hospital patient suing Schirott and others discovered papers showing the lawyer was partners in a secret $20 million deal with a Nevada casino. The man's lawsuit against Schirott was quickly dismissed as baseless, but not before the documents became part of the public record.

Joining an aide to Henry Hyde, the lawyer had formed a company, "Pete & Repeat," where partners would each collect $450,000 annually for 20 years, after splitting a one-time payment of $1.9 million. For this tidy sum, Schirott and his partner had to help Primadonna Resorts obtain a license for Mississippi riverboat gambling, plus setup a lobbying office.

Not one, but two direct links to Hyde as well as Illinois Senate President James "Pate" Philip (another Schirott client) raised the "possibility of influence-buying," according to the head of the state Gaming Board, but no investigation was pursued. The incriminating papers found in the dumpster were quickly sealed by court order.

Schirott has represented other gambling interests as well. In 1992, he helped Empress River Casino Corp. sue its own workers. This Illinois riverboat gambling concern hired a company to manage the operation for 30 percent of gambling income, then projected at a max $4.5 million per year. Instead, the outfit collected $11.5 million during July alone. Because they had no competition in the Chicago area, Empress River pulled in far more money than expected. Schirott and his legal team argued that a new contract should be made, and that suit was reportedly settled for $20 million.

Illinois politics and gambling
Made legal in 1990, Illinois riverboat gambling interests quickly gained political clout through generous campaign donations and hiring former state officials.

In the last half of 1996 alone, almost $700,000 was given to Illinois politicians, the largest amount of $90,520 coming from Empress River Casino interests. "We have got a 500-pound gorilla loose in the Capitol building," a watchdog group spokesman told the Chicago Sun-Times. "When that guy says he's hungry, there's going to be some people scurrying around looking for bananas."

Critics also note that top officials left the Illinois Gaming Board and were hired by the casinos. Donna More, the Board's chief legal counsel, quit and took a job with the Casino Rock Island riverboat operation; a year after her resignation, she was representing the casino before the Board. At least three other Board administrators or lawyers also found work in the industry, including former Board chairman William Kunkle Jr., who later represented Primadonna Resorts.

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Albion Monitor December 5, 1998 (

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