House banking scandal

The House banking scandal broke in early 1992, when it was revealed that the United States House of Representatives allowed members to overdraw their House checking accounts without risk of being penalized by the House bank (actually a clearinghouse).

This is also sometimes known as Rubbergate (from the expressions "rubber check" (bounced check) and "Watergate)". The term is misleading because House checks did not bounce; they were honored because the House Bank provided overdraft protection to its account holders, the Office of the Sergeant at Arms covered the House Bank with no penalties. It was also sometimes known as the "check-kiting scandal".

The House banking scandal ultimately involved more than 450 representatives, most of whom did not break any laws. Twenty-two congressmen and -women were singled out by the House Ethics Committee for leaving their checking accounts overdrawn for at least eight months out of a sample of 39 months.

The following 22 House members were singled out by the House Ethics Committee:

The scandal contributed to a perception of corruption and malfeasance and was a contributing factor to major changes in the House, in which 77 Representatives resigned or were ousted in the 1994 election. Four ex-Congressmen, a Delegate, and the former House Sergeant at Arms were convicted of wrongdoing as a result of the investigation that followed.

Among these, former Rep. Buz Lukens (R-OH) was convicted on bribery and conspiracy charges. Former Rep. Carl C. Perkins (D-KY) pleaded guilty to various charges including a check kiting scheme involving several financial institutions including the House Bank. Former Rep. Carroll Hubbard (D-KY) pleaded guilty to three felonies. The former Sergeant at Arms, Jack Russ, pleaded guilty to three felonies.

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