When it comes to Rep. Jim Leach, the enactment of financial reform proves one thing: Nice guys can finish first on Capitol Hill - but just barely.

On Nov. 12 the House Banking Committee chairman achieved the type of legacy all politicians covet when President Clinton signed legislation that lets banks merge with securities firms or insurance companies and imposes privacy protection and other responsibilities on conglomerates formed by such mergers.

And if the modest Iowa Republican were so inclined, he could brag that he did so despite many skeptics and without compromising his most cherished policy objective - preventing nonfinancial companies from entering the banking business.

In an interview, Rep. Leach celebrated other accomplishments, too. Congress adopted a landmark House Banking bill to forgive hundreds of millions of dollars in debt owed by some of the world's poorest countries. The committee also helped pressure Swiss and other banks to pay Holocaust victims and their heirs more than $1 billion for assets seized by the Nazis.

Next year will be Rep. Leach's last at the helm of House Banking; he says his goals include closely examining 1999's six bank failures. Though they involved small institutions, they could cost the Federal Deposit Insurance Corp. nearly $1 billion to resolve. And the committee may schedule a hearing on the role subprime lending operations played in the failures.

Rep. Leach introduced legislation Nov. 16 that would give the FDIC chairman sole authority to order a special examination of any financial institution. Current law requires a majority vote of the FDIC board before the agency may dispatch examiners to banks overseen by other agencies. The purpose is to prevent the heads of other agencies who sit on the FDIC board from blocking these "backup" exams of institutions under their jurisdictions.

Rep. Leach also plans to continue the committee's investigation of alleged money laundering by customers of the Bank of New York and other large American institutions with suspected ties to Russian mobsters. A hearing is planned to examine possible diversions of U.S. and international aid. Several bills have been offered by Rep. Leach and others to crack down on money laundering.

House Banking is also expected to debate further consumer privacy protections, consider legislation that would require more disclosure by hedge funds, and hold hearings on the merits and risks of Internet banking.

Rep. Leach, who last year co-offered a successful amendment requiring automated teller machine fee disclosures rather than banning surcharges, is not expected to press for any tougher legislation next year.

The House Banking chairman would not rule out the possibility that bank and thrift deposit insurance funds could be merged next year. But he said that would first require a merger of the Office of the Comptroller of the Currency and the Office of Thrift Supervision, "which I am quite open to."

Whether major legislation can be enacted during an election year is unclear, particularly when 2000 could be "one of the closest elections in modern-day American public life," Rep. Leach said.

Though adoption of the Gramm-Leach-Bliley Act made 1999 sweet, the year came very close to being a flop for Rep. Leach, who had repeatedly sought to revamp U.S. financial laws since becoming chairman in 1995.

Enactment seemed unlikely in September, and speculation over what turned things around ranges from a "do-nothing" Congress starving for accomplishments to the lobbying influence of former Treasury secretary and new Citigroup executive Robert E. Rubin.

Rep. Leach judiciously avoided endorsing these theories but underscored the power of inclusion and compromise. He was quick to acknowledge, though, that the process could have blown up at any time for countless reasons.

In a word, "Whew!"

"I feel like a great burden has been released," said Rep. Leach, who plans to abide by Republican term limits on chairmanships and step aside as committee boss in 2001 if he wins reelection. "The issue has been around, as everybody knows, for many years, but the reform that has occurred has been done the right way."

But luck, as the saying goes, is the residue of design. A single formula worked for Rep. Leach each time the bill seemed at its darkest hour: Keep it bipartisan because even if Republicans could ram it through Congress, President Clinton could veto it.

"No major issue before Congress required more cooperation between the Congress and the executive branch than this one," he said. "There were those who argued that Congress could stuff a bill down the executive's throat, and I never, ever believed there was a prayer for that to happen."

Cooperation among Republicans and Democrats seemed like a pipe dream in January, when the Senate impeachment trial of President Clinton was under way. Adding to the uncertainty, Sen. Phil Gramm, who single-handedly blocked the bill in the Senate last year, had become chairman of the Senate Banking Committee.

Rep. Leach moved early to reach a consensus in his committee. He met over breakfast in February with Rep. John J. LaFalce, the panel's ranking Democrat, and the two agreed to blend their rival versions. The Treasury Department, which had endorsed the LaFalce bill, agreed to support the combined legislation. On July 1 the House passed by a wide margin a bill that resembled the Leach-LaFalce bill in many ways.

Sen. Gramm, meanwhile, chose a different strategy. The Senate adopted a reform bill largely along party lines in May, but the Texas Republican later described this as intentional - an attempt to give himself negotiating latitude by having a bill as different as possible from the bipartisan House version.

By September, the House-Senate conference committee, with Rep. Leach as chairman, was almost at a standstill. Sen. Gramm objected that there were more House Democratic conferees than House Republican negotiators. And Sen. Gramm was stymieing Rep. Leach's plan to vote section-by-section on the bill and keep deliberations public.

"This is a mismatch," a veteran banking lobbyist said after one committee meeting, offering a common critique of the leadership style Rep. Leach displayed in the face of his more aggressive Senate counterpart.

Rep. Leach would eventually concede on most of these procedural matters, joining key Republicans to draft a bill behind the scenes. Partisan tensions increased as a result.

But Rep. Leach, whose opposition to mixing banking and commerce put him at odds with some high-ranking House lawmakers, benefited when House and Senate Republican leaders began to press the negotiators to make a deal. That may have forced Sen. Gramm to compromise on changes in the Community Reinvestment Act. Another breakthrough came in October when the Treasury and Federal Reserve Board reached a surprise pact on new bank powers.

In the end, Rep. Leach said, taking the high road kept the combustible process in check. "My goal in this whole process was to have something that everybody could be proud of."

The House approved the bill 362-57, and the Senate voted 90-8 to adopt it before President Clinton signed it Nov. 12. Rep. Leach, an aide said, all along sought as wide a margin of victory as possible to insulate the bill from future attempts to revise it.

Some have already started. Before the bill became law, Rep. Edward J. Markey, D-Mass., and Sen. Richard C. Shelby, R-Ala., introduced legislation to toughen its consumer privacy safeguards.

Also Sen. Gramm and others have said it is inevitable that the banking and commerce issue will be revisited relatively soon. Rep. Leach vehemently disagrees, arguing it is un-American to let Microsoft Corp. or Amoco Corp. own banks because that would concentrate too much power in too few companies and could make it harder for competitors to get credit.

But that battle will be for another chairman to fight.

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