by Whet Moser
Rosty is dead at 82. Rostenkowski's tremendous fall from grace is probably what he's best known for, but locally he developed a powerful political machine that continued to spin until the election of rookie alderman and potential mayoral candidate Scott Waugespack, which Ben Joravsky contends represents the true end of Rostenkowski's impressive organization:
Rostenkowski and Gabinski controlled their villagers with the stick of brute force and fearmongering and the carrot of services like garbage collection and snow removal. On election day they sent out thick-necked patronage workers to lurk outside polling places, passing out palm cards and intimidating the locals so they wouldn’t stray from the fold. If intimidation didn’t work, there was always the race card. During the 1983 mayoral race, Rostenkowski and Gabinski put their support behind every white candidate who ran against Harold Washington—even a Republican, Bernie Epton. It was their way of letting the little people know they weren’t going to let the blacks take over.
Chicago wasn't the only place Rostenkowski wielded his power; in some respects it was a training ground. In the late 80s and early 90s, shortly before federal charges led to his defeat, Philadelphia Inquirer reporters Donald Bartlett (a Daily News vet) and James Steele pounded away at Rosty, whose position as the chairman of the House Ways & Means Committee gave him tremendous influence on taxes, or the lack thereof:
Barlett and Steele specialize in the dissection of this rule tilting. Last October, after two years of research, they published "America: What Went Wrong?"—a nine-part autopsy of the 80s that showed, to quote the Inquirer, "how millions of Americans have fallen victim to a combination of rulemakers in Washington and dealmakers on Wall Street."
The Inquirer presented Rostenkowski as one of the great rule makers and rule tilters. A principal author of the 1986 Tax Reform Act, he asked his colleagues then, "Do we want to give back to middle-income taxpayers the fairness they do not believe will ever come? Or do we want to stand for the status quo, which goes hard on the poor—and easy on the rich?"
Rhetorical questions, of course. But according to Barlett and Steele, "The answer—documented in an Inquirer analysis of tax data—is that Congress has stood for the rich."
That's from a 1992 piece by Michael Miner on Rostenkowski's local works and reputation versus his national works and reputation, and is well worth a read. The same year, David Moberg, writing about Rostenkowski and his race against Dick Simpson (U of I prof and august Chicago political commentator), went into tremendous detail recounting his legislative record during the 1980s, which covers the extension of unemployment benefits, Canadian-style national health care, the regulation and taxation (see also) of futures markets, deficit-inspired austerity, and other issues that will be familiar to readers in 2010:
Like so many Democrats, Rostenkowski has developed a far too cozy relationship with industry lobbyists whose interests clash with those of his middle-class and blue-collar constituents. For example, he has been an ardent defender of Chicago's futures markets, fighting attempts to regulate the industry and to restrict the tax dodges traders have concocted for themselves. (His actions in 1984 on their behalf cost the federal government an estimated $300 million in lost taxes.) He recently proposed legislation that would permit mutual funds to engage in more short-term trading. This would be a boon to futures traders; perhaps it is not coincidental that the securities industry, especially the futures faction, has given Rostenkowski $137,500 over the past six years. But a sizable body of economic opinion holds that American business, especially the battered manufacturing industries of Rostenkowski's district, desperately need more long-term investment, not short-term trading.
Oh, and the transformation of blighted neighborhoods:
Likewise, Rostenkowski helped Mayor Jane Byrne and developer Dan Shannon, an old friend and business partner who was once head of the scandal-plagued Central States Teamsters Pension Fund, create the four Presidential Towers luxury apartment buildings west of the Loop. "They ought to name them after my four daughters," Rosty once joked.
From the city's point of view, West Madison was blighted. But it was also the site of most of the city's single-room occupancy and "cage" hotels, which provided crucial shelter for the poor. When those buildings were wiped out, similar housing was not constructed.
Rostenkowski provided two important tax breaks to grease the Presidential Towers deal. He allowed Presidential Towers to be built with tax-free bonds—similar to those he wouldn't let the city use to buy Com Ed—without meeting federal regulations that 20 percent of the apartments be set aside for low- and moderate-income tenants. Then he exempted the Towers from a federal law that restricted tax benefits for projects enjoying multiple government subsidies. This tax break cost the federal government $55 million (a bit more than half of the total public subsidies to the Towers, according to a study by the Chicago 1992 Committee).
Now Presidential Towers is in default on its government-insured loan. But Rostenkowski appears to have fared well. According to a Chicago Sun-Times investigation, Rostenkowski invested $200 in a blind trust administered by his friend Dan Shannon, the developer of Presidential Towers. In four years the trust turned a profit of $100,000.
Rostenkowski fired back shortly thereafter, and Moberg responded. Moberg also detailed Rostenkowski's role in something that won't be as familiar to contemporary readers, the city's attempt to make a private utility public, in this case ComEd (David Fremon tells the story of a similar attempt in 1947).
And the most dangerous and ruthless are those prosecutors who have political ambitions that are most easily fulfilled by hanging a well-known public figure.
That's what did Rostenkowski in - a federal prosecutor's personal ambitions. If I could put those federal headhunters on a lie box and ask: "Do you really believe that what he did was a terrible crime?" and they said "Yes," the needle would clang when it went past the marking for "liar, liar, pants on fire."
Sure enough, Rostenkowski goes to his grave, for better or worse, with convicted felon engraved near the top. The last paragraph of the Trib's the-body-is-still-warm obit:
"With all the legislation that I passed, with all the history that I've written with respect to the economics of the country, they're always going to say there's a felon named Danny Rostenkowski," he said. "That's going to be the obituary."
Meanwhile, the history he wrote gets a sentence: "Rostenkowski played a major role in the 1986 Tax Reform Act, groundbreaking legislation that was intended to simplify the tax system and eliminate various tax shelters."
(A more cynical read might be that it traded tax shelters and loopholes for tax breaks, but take it from Moberg and Rostenkowski in response.)
It all reminds me a bit of Rod Blagojevich, who continues to await his soon-to-be famous or infamous fate. Rostenkowski may have been a crook, but as is alleged of Blagojevich, he wasn't much of one. And like Blagojevich, that's what he'll probably be forever known as, despite the fact that Rostenkowski was one of the major players in fights over taxation, health care, and other legislative issues that mirror—and influence—today's political scene. Rostenkowski's Chicago Way, the kind Royko mourned while the machine reinvented itself, may have petered out last decade within West Town and the Ukrainian Village. But the high-stakes, big-money version he crafted during a pivotal time in the nation's economic history remains with us every day.