Federal prosecutors are investigating an alleged homosexual prostitution ring that catered to political figures including a Labor Department official, who resigned when the investigation was made public.
The investigation is based on financial records and other material seized in raids on a house in an up-scale Washington neighborhood that police say was used by escort services with names such as "Dream Boys" and "Man to Man."U.S. Attorney Jay Stephens on Thursday confirmed the investigation into allegedly fraudulent multiple billings of the services' patrons, after The Washington Times reported that the ring was patronized by Reagan and Bush administration officials, congressional aides and one of its own former editors.
One of a handful of individuals named in the Times article, Paul R. Balach, resigned Thursday evening.
"I hereby resign to the public disclosure of activities concerning my personal life," Balach said in a letter to Labor Secretary Elizabeth Dole's political personnel liaison to the White House.
The Times quoted Balach as saying department Solicitor Robert Davis told him he had a choice of resigning or being fired. He said he was not allowed to talk to Dole about the matter.
"Somebody else is going to clean out my office. They didn't want me to come back," Balach said.
Balach told the Times that thousands of dollars in charges were run up on his credit cards without his knowledge after he used the service.
The Times said another of the ring's clients was so politically well-connected that he was able to arrange a middle-of-the night tour of the White House in July 1988 for a group including two male prostitutes.
Secret Service agents and District of Columbia police raided the escort service house in Northwest Washington on two occasions, in February and May.
Stephens refused to talk about allegations of the homosexual ring, but said that his office "has been investigating allegations involving credit card fraud arising from the execution of those warrants."
During the raids, officers confiscated multiline telephones, paging devices, credit card imprinters, numerous bank statements, credit card slips and a diary of the escort business, according to an inventory filed in U.S. District Court.
The Times said it has obtained a number of credit card slips and it identified individuals who paid for services, including Balach.
Labor Department sources said Balach decided Thursday to take a few days' leave after being named by the Times as a patron of the services. He resigned Thursday evening.
The Times quoted unnamed witnesses and law enforcement agents as saying the Secret Service kept one box of seized files containing names and other information about high-level government officials who were clients of the escort businesses.
The Times said Stanley Mark Tapscott, one of its former assistant managing editors, was among those who used the escort services.