Federal prosecutor may be sitting in on the tax bill negotiations.

WASHINGTON -- If you took a poll last week of the tax bill negotiators in Congress, they probably all would have said that James C. Smith has lousy timing.

Smith is the federal prosecutor who announced on July 20 that Robert V. Rota had pleaded guilty to helping two unnamed congressmen embezzle money from the House Post Office.

The plea agreement with Rota, the former head of the post office, stipulates that he will offer testimony against the two, one of whom is widely understood on Capitol Hill to be House Ways and Means Committee Chairman Dan Rostenkowski, D-III.

Rostenkowski any has denied any wrongdoing.

From the standpoint of tax negotiations, the timing of Smith's announcement could not have been worse. His press conference last Monday was less than 24 hours before House and Senate conferees held their first substantive meeting to work out differences between their two versions of President Clinton's tax package.

The most immediate effect of the disclosure of Rota's guilty plea was to inject one huge distraction into the proceedings the next day. The negotiators' first meeting, which even under normal circumstances would have been well attended, was swamped by television cameras and photographers.

Rostenkowski, usually not one to schmooze with the press or lobbyists, took even greater pains than usual to avoid the television lights outside the committee room. Dashing from meeting room the office door after the session, he ignored all questions.

The same furtive behavior was in evidence later that day at the White House, where Rostenkowski and Senate Finance Committee Chairman Daniel P. Moynihan, D-N.Y., met with Clinton to discuss the tax bill conference.

The two lawmakers arrived in the same car, and hurried into the White House before many of the reporters staking out their arrival realized they were there. On the way out, Moynihan appeared to be shielding Rostenkowski, letting him get into the car first and throwing a few comments to the reporters, almost as a distraction, according to one eyewitness.

But aside from the surface disruptions and inconveniences, the big question is whether this scandal is going to damage Rostenkowski's ability to carry out his work as chief tax writer in Congress.

Smith dropped a heavy hint when he said that Rota's testimony would greatly aid his investigation.

That means a possible indictment in Rostenkowski's future, and that in turn probably left tax conferees wondering whether the congressman could disappear from the scene at any moment.

If Rostenkowski were indicted, he would not have to resign his congressional seat, but House rules would require him to temporarily relinquish the chairmanship of the Ways and Means panel. The second-highest ranking committee member would be expected to become acting chairman.

That means the post would go to Rep. Sam M. Gibbons, D-Fla. But the rumor mill on Capitol-Hill has been working overtime speculating that House leaders might bypass the 73-year-old Gibbons for someone younger. The age factor would probably also apply to the third Democrat in seniority, 79-year-old J.J. Pickle of Texas. Thus, it is possible the slot could go to the fourth ranking Democrat, Rep. Charles B. Rangel, D-N.Y.

But the speculation is still a little premature, because Smith indicated in his announcement that indictments. if they come at all, would not be handed down for a few weeks. That means Rostenkowski would remain the committee chairman at least through final passage of the budget and tax package.

If Rostenkowski isn't going anywhere for the time being, then there's nothing to worry about, right? Wrong. Capitol Hill observers worry that Rostenkowski's influence is on the wane, though how that will affect the negotiations is impossible to quantify.

In small ways, maybe, Rostenkowski could very well give away more than he would otherwise, but those on the outside will never know how much.

Everything has a cost. Upon hearing that Moynihan shielded Rostenkowski from reporters' questions at the White House, one Washington reporter laughed and asked, "So, what will Rostenkowski have to give up in return.?"

The conclusion of the tax bill conference won't end the questions. There will be plenty more work for Rostenkowski to do this year, including beginning the debate over Clinton's health-care reform plan.

So don't be too hard on James C. Smith. When it comes to someone as powerful as Rostenkowski, maybe there just isn't a good time to make the announcement that Smith made last week.

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