POLITICS

Newt Gingrich Is The Donald Trump Of Politics

Gingrich, a finalist to be Trump's running mate, leaves a trail of bankruptcies, lawsuits and unpaid debts.

Presumptive Republican presidential nominee Donald Trump says he wants a running mate who "can help [me] with legislation" on Capitol Hill, where Trump, a truculent political novice, has few allies.

This week, Trump whittled his list of potential running mates down to just a few contenders, among them New Jersey Gov. Chris Christie and Former House Speaker Newt Gingrich (R-Ga.). And only one of them has ever steered the passage of a bill through Congress. 

In his 20 years of representing Georgia's 6th Congressional District, however, Gingrich did far more than pass a few bills: He devised and led a populist Republican renaissance. In 1994, Republicans won a majority in the House for the first time in 40 years, thanks in large part to Gingrich and the policy proposals he dubbed the GOP's "Contract with America." Over the next four years, Speaker Gingrich put his mark on everything from welfare reform to tax cuts to term limits.

While his skills as a showboater and a debater are well known, there's another side of Gingrich that has rarely been explored. In the spring of 2012, as Gingrich burned through campaign funds in his ill-fated bid for the presidency, The Huffington Post investigated his management record, through interviews and thousands of pages of public records.

The resemblances between Gingrich and Trump are striking. Both have presided over a web of corporate entities, many of which they saddled with debts that were never paid. Both devised legally questionable ventures to disseminate their "secrets" to others in ways that conveniently benefitted themselves. People who've worked for them describe Gingrich and Trump in similar terms: as self-absorbed, hot-tempered bosses who view themselves as geniuses who needn't bother with details.

Below are some relevant passages from our 2012 article. Read the whole story here. 

Since 1984, Gingrich has launched 12 politically oriented organizations and initiatives based in Washington. Of those, five have been investigated by the Internal Revenue Service and the House Ethics Committee, another five closed down with debts totaling more than $500,000, and two were subject to legal action.

According to former colleagues and subordinates, Gingrich burns through money by repeatedly expanding his plans and ignoring warnings from staff about the finances of his projects. Now, the same pattern is threatening his presidential campaign.

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“The best way to say it is that Newt has no brakes and no rear view mirror,” observed one former adviser who still speaks highly of Gingrich, but who requested anonymity because he is forbidden from speaking to the media in his current job. “So he never pulls back, and he never learns from the past.”

 According to a veteran adviser, Gingrich’s first deadbeat operation was a 501(c)3 nonprofit called the American Opportunity Foundation (AOF), which he created with a group of political consultants in 1984, during his third term as a Republican congressman from Georgia’s 6th District. (A 501(c)4 group, American Opportunity Inc., was created at the same time, but never utilized.)
The mission of AOF was to conduct nonpartisan research, according to its IRS incorporation papers. The group’s
, however, were rife with political buzzwords, such as how to lessen “the burdens of government.”
The conflict between AOF’s stated purpose and its real activities came to a head less than a month before the 1984 election, when
that AOF had staged events on college campuses hailing President Ronald Reagan’s achievements. The law expressly forbids 501(c)3 nonprofits from participating in political campaigns to the benefit of one candidate or another.
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The bad press resulted in questions about AOF’s legitimacy. Gingrich quickly stepped down as AOF’s chairman and severed his ties to the group.

The campus events had cost approximately $15,000, equivalent to $33,900 today, and Gingrich left the bill for his two lead consultants, business partners Ladonna Lee and Henry “Eddie” Mahe. Mahe and Lee expected Gingrich to bring in donations to pay for the events, according to a source close to AOF.

“Eddie and Ladonna were screwed by him,” said the source. “I remember Ladonna telling Eddie, ‘If you get involved with Newt again, I’m dissolving our partnership.’”

When asked whether AOF had fulfilled its mission, Lee paused. “I don’t know that it lived out its mission,” she said, “but I do know that Newt was never part of the business dealings of any of these entities, and I never saw Newt in a meeting about business.” 

Although Lee may have intended her comment to absolve Gingrich of responsibility for the debt left at AOF, other longtime Gingrich associates say that it is precisely this lack of financial involvement, coupled with his willingness to abandon initiatives abruptly, that lies at the core of his management problems.

Lee herself described Gingrich’s pattern of abandonment in a 1995 Vanity Fair interview, saying, “Gingrich would always get people started on a project or a vision, and we’re all slugging up the mountain to accomplish it. Newt’s nowhere to be found. … He’s gone on to the next mountaintop.”

A consultant who worked with Gingrich in the 1980s said, “I heard a staffer question Newt about a cost that was over budget once, and instead of telling the kid what to do next, Newt just said, ‘When I see that something isn’t working, I cut my losses.’”

Jeff Eisenach, a GOPAC consultant and former Reagan White House budget aide, wrote in a memo (below) to Gingrich that “a consensus has developed” among Gingrich’s cadre of advisers “that a 501(c)3 organization should be created (or, alternatively, an existing 501(c)3 organization recruited)” to help fund GOPAC’s expanding mission. This memo and hundreds more were presented to the House Ethics Committee during its investigation of Gingrich in the 1990s and are available on the
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Among the options, Eisenach wrote in the memo, was “re-activing” a 501(c)3 nonprofit, the Abraham Lincoln Opportunity Foundation (ALOF), that had been founded in Colorado by GOPAC’s chairman, Bo Callaway. Originally intended to benefit inner-city kids, ALOF had been inactive for nearly a decade. It was essentially a shell company.

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With Callaway’s permission, beginning in 1990, Gingrich and his GOPAC staff used ALOF to produce teleconferences and a TV program that would eventually evolve into a college course — all designed by Gingrich and GOPAC staff, and paid for with a complex mix of political donations to GOPAC and charitable contributions to ALOF. Like other Gingrich projects, this one would grow exponentially over the next three years.

“In some ways, Gingrich has always had grandiose ideas, and he’s very good about getting people excited about them and garnering donations,” said Allison. “But what he hasn’t been able to do is follow through on them. He has these ideas and begins to execute them, and then he moves on.”

In a memo to Callaway about GOPAC’s future, Eisenach recalled a walk he took with Gingrich in June 1990. “Newt empowered us to think big,” he wrote, “and said ‘institutions should be invented to meet the environment, not evolve incrementally.’” Those “institutions” would come to include nonprofits, political action committees, and consulting groups.

By August 1990, expenses were snowballing. ALOF had spent more than $260,000 on a teleconference called the American Opportunities Workshop in the first half of the year, much of it collected from GOPAC donors or lent by GOPAC, according to House Ethics Committee documents. GOPAC itself spent another $188,000 on the workshop and a follow-up entity, American Citizens TV. The political action committee was quickly running out of money. 

Leadership PACs like GOPAC have traditionally been used to fund other candidates’ campaigns, as well as to pay expenses such as the PAC chairman’s travel to stump for those candidates. By the summer of 1990, however, GOPAC coffers were so depleted from the cost of producing and distributing Gingrich’s message through ALOF and other initiatives that Eisenach, who by then had taken over day-to-day operations, was forced to write revised financial plans with the words “projection based on giving no cash to candidates“ at the bottom.

“Instead of sending [candidates] money, Newt wanted to send them ‘Newt,’” explained a former adviser who still works in Republican politics and requested anonymity in order to discuss his former boss. “All his ideas about how to run, how to communicate that to voters, I mean, this whole thing he was hatching in his head. And later he decided he wanted to send everything he’d sent all those prospects … to the whole country.”

During the 1992 election cycle, GOPAC received more than $4 million in donations and spent only $18,000 on supporting candidates. Nevertheless, the group was left with $340,000 worth of debt at the end of ‘92.

In December of that year, Eisenach, as director of GOPAC, wrote a damning memo to his superiors, including Gingrich, explaining what few could have imagined: The leadership PAC of the minority whip of the House of Representatives was barely able to make payroll.

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The 1992 elections were a disaster for Republicans, with Democratic candidate Bill Clinton defeating incumbent President George H.W. Bush, and both the House and Senate remaining firmly in Democratic hands.

Apparently unfazed, Gingrich pressed on. In December 1992, he reworked his master plan for the GOP during a trip to Florida. The result was a flurry of handwritten notes over three days, which Gingrich believed held the key to a Republican House majority. He gave his project a new name and, with it, a new mission: Renewing American Civilization (RAC).

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Despite funding pressures, Gingrich during the spring of 1993 was consumed by the idea of turning RAC into a full-blown college course, ready to be broadcast to young people across across the nation. “Renewing American civilization,” he wrote, "is the greatest challenge of the rest of our lives.”

He transferred RAC from GOPAC’s offices to a newly created nonprofit think tank that Eisenach founded, the technology-focused Progress and Freedom Foundation (PFF).

The plan was for Gingrich to teach his RAC course at Georgia’s Kennesaw State College and for the college to help manage tax-exempt donations to pay for it. There would be a total of 10 lectures a year through the 1995-96 school year.

Gingrich decided to shut down the course a year early, however, after the 1994-95 winter term, which ended in March of ‘95. Later, during the House Ethics Committee probe, he told investigators that he had given it up because he “had learned all he could from teaching the course and had nothing new to say on the topics.” 

One former staffer laughed when HuffPost informed him of Gingrich’s purported reason for ending the course. “Have you ever heard Newt Gingrich speak?” he asked. “Do you really buy that he had nothing more to say?”

Shutting the course down early left [Gingrich's nonprofit] $250,000 in debt, however. When [former Reagan administration aide Jeff Eisenach] asked Gingrich to help raise money — as he had previously done — to cover the shortfall, Gingrich, now third in line to the presidency, balked at the notion.

"If you take it upon yourself to make a decision you take the responsibility of the debt also,” wrote Gingrich.

Documents and testimony from the ethics investigation, however, make it difficult to understand just how Gingrich expected Eisenach to raise a quarter-million dollars for the course without Gingrich, who was its raison d’être.

The Progress and Freedom Foundation ultimately paid off the $250,000 of debt for Gingrich’s course, according to IRS records, and the group operated independently of Gingrich until 2010.

“Newt leaves all of his colleagues with bags of dead cats,” said a former Gingrich colleague when asked about the end of [the Renewing American Civilization project]. “Not just one dead cat,” he said. “Bags of dead cats.”

Gingrich founded the 527 political group American Solutions for Winning the Future in 2006 to finance his political comeback. American Solutions raised $50 million in a mere four years, for travel, public speaking engagements, mailings and other expenses, with more than $8 million coming from Adelson, the casino magnate, and his family. Like GOPAC and CNAL, the group was managed by Gaylord.

After Gingrich announced his candidacy for president last year, however, he left the group and took his fundraising prowess with him. Unlike PFF, which survived his departure, American Solutions quickly went bankrupt, having spent $500,000 more in the first half of the year than it took in.

Following the model of so many Gingrich projects before it, American Solutions is now defunct and in legal trouble. This time, however, it’s not with the IRS but with the landlord, who sued the group this fall for $19,130 in delinquent rent for office space on Washington’s K Street. No one appeared in court on behalf of American Solutions.

According to D.C. Superior Court records, the U.S. Marshals Service was directed to evict American Solutions from the office in late December, but it’s unclear whether the order has been carried out.

Gingrich still leases space in the building for his other ventures, however, and the willingness of Gingrich and his staff to stand by while an organization he founded and led until last year is hauled into court and evicted for back rent is striking, to say the least.

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Meanwhile, Gingrich’s presidential campaign has staggered, soared and plummeted. His win in the South Carolina Republican primary in January was a vindication for the former House speaker, who has dismissed any and all pundits and naysayers who count him out.

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Yet bravado alone is unlikely to carry Gingrich all the way to the White House. Even his mega-supporter, Sheldon Adelson, has signaled that he may back another candidate if and when Gingrich no longer seems like a good investment. With expenses mounting, Gingrich’s own campaign is poised to become his latest victim.

HuffPost

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