Albion Monitor /Commentary

The Case against Newt

by Alexander Cockburn

The Republicans in Congress have now publicly recorded their contempt for the law in a manner that displays their superabundant hypocrisy. By re-electing Newt Gingrich as speaker of the House, they affirmed at the start of this week that they believe his ethical lapses to be of no consequence. They cannot plead ignorance of his misdeeds since the House Ethics subcommittee described them in detail in its report of Dec. 21, 1996.

Society has agreed that tax-exempt status is fine in the case of churches, hospitals and so forth, but Gingrich's personal political future?
Gingrich's offenses are not small. As Gregory Colvin, a lawyer specializing in the area of tax-exempt organizations, has publicly stated, "If I were Mr. Gingrich's lawyer, I would worry that the charges could escalate to tax fraud, mail fraud, conspiracy and racketeering in the hands of an aggressive independent prosecutor."

Gingrich used tax-deductible charitable contributions for partisan political purposes. Anyone inside the Beltway who has had the slightest contact with fund raising or with tax-exempt foundations has an entirely clear knowledge of what is involved here from the legal point of view. If you set up a 501(c)3 corporation, you have to persuade the Internal Revenue Service that you are doing so for non-partisan political purposes and therefore deserve tax-exempt status.

Now, there are about a million organizations in America with such tax-exempt status. They range from hospitals, churches and universities to public service outfits. Anybody giving money to them can take a tax deduction, which means that the government -- therefore ultimately the taxpayers -- has to pay the price of the deduction. Society has agreed that this is fine in the case of churches, hospitals and so forth, but Gingrich's personal political future?

Of course, there is a larger sham involved. On the right, you have such outfits as the Heritage Foundation and, on the liberal side, such groups as the Children's Defense Fund, both enjoying 501(c)3 tax-exempt status but both broadly espousing either the Republican or the Democratic cause. Nonetheless, there are limits in political advocacy beyond which they take care not to go. They don't brazenly indulge in direct electioneering. A big no-no is to wash political contributions through a non-profit foundation. This is money laundering, tempting because it is much easier to hit up contributors for donations that are tax-deductible by the donor.

Gingrich, according to the Los Angeles Times, raised at least $6 million in "charitable" contributions given to tax-exempt foundations with close ties to his political organization, GOPAC. Then, he lied to the Ethics Committee about this. He said, for example, that his foundation-run college course, "Renewing American Civilization," was "non-partisan." Yet he'd earlier written to political supporters that this same course "will provide the structure to build an offense so that the Republicans can break through dramatically in 1996."

He went on lying. He told the Ethics Committee he should have taken legal advice so that he would not have used tax-exempt contributions for partisan political purposes. But in fact, he had sought legal advice and had been told that there were tax problems. In 1990, Gordon Strauss, a GOPAC attorney, issued a clear warning of the IRS' "express prohibition" against using tax-exempt foundations for political ends.

Here is the whole of the tough-on-crime Republican Party claiming he's a martyr
You can argue with some merit that the whole 501(c)3 category is a fraud and should be junked, along with most of the other tax loopholes, but the laws are on the books still. Gingrich knew exactly what he was doing, and even as he was fleecing taxpayers to fund his own political future, he and his Republican colleagues were flailing away at liberals and leftists for using federal arts subsidies for their political agendas.

Recently, there's been much acclaim for the notion that a city's crime problem begins with small degradations in the quality of life and moral conduct that lead to greater rot and fiercer crime. Turnstile jumping and hustling motorists with squeegee-blackmail lead to muggings and more violent outrages. But the same folk, on The Wall Street Journal's editorial page and elsewhere, who enthusiastically cry out for the incarceration of turnstile jumpers and squeegee artists defend Gingrich and claim he's the victim of a double standard.

But Newt is a turnstile jumper in one of the most conspicuous political positions in the country. He's been blatant. He allowed a telecommunications exec and political donor to work on a bill in the speaker's office. For this and other deeds, the Ethics Committee has found he violated House rules. He's twisted the tax laws. It's as though he not only jumped the turnstile but held up the clerk in the ticket booth. And here is the whole of the tough-on-crime Republican Party claiming he's a martyr.

Talk about a double standard!

Comments? Send a letter to the editor.

Albion Monitor January 15, 1997 (

All Rights Reserved.

Contact for permission to reproduce.

Front Page