Remember Newt Gingrich’s college course? The one his enemies called a tax scam? Now that the IRS has cleared him, will those enemies admit they were wrong? No way. But Gingrich could still have the last laugh.
It was a few days before Christmas 1996, and David Bonior was not in the holiday spirit. With a characteristically grim look on his face, the Michigan Democrat walked into the House Radio-TV gallery to express his outrage at the ethical transgressions of Speaker Newt Gingrich. “Anyone who has engaged in seven years of tax fraud to further his own personal and political benefits is not deserving of the speakership,” Bonior told reporters. “Mr. Gingrich has engaged in a pattern of tax fraud, lies, and cover-ups in paving his road to the second highest office in the land.”
As he had several times since the Republican takeover of the House, Bonior called on the speaker to resign immediately. But he said whatever Gingrich might do, the issue would inevitably move beyond the House Ethics Committee, which was then conducting a long-running investigation. “I would expect the Justice Depaitnient, the FBI, a grand jury, and other appropriate entities to investigate,” Bonior said. “I don’t see any way they can ignore this.” In the end, he predicted, the speaker would likely face criminal charges.
Bonior wasn’t alone in making such allegations. Fellow Democrat John Lewis accused Gingrich of engaging in a “massive tax-fraud scheme.” George Miller of California said his actions were designed “to defraud the tax laws of the country.” And Colorado’s Pat Schroeder concluded, “We might as well rip up all the laws, rip up all the rule books, if the guy at the head can thumb his nose at them.”
At the center of the controversy was a course Gingrich taught from 1993 to 1995 at two small Georgia colleges. The class, called “Renewing American Civilization,” was conceived by Gingrich and financed by a tax-exempt organization called the Progress and Freedom Foundation. Gingrich maintained that the course was a legitimate educational enterprise; his enemies contended that it had little to do with learning and was in fact a political exercise in which Gingrich abused a taxpayer-subsidized foundation to spread his own partisan message.
The accusation, started by a small group of Democrats but amplified in thousands of press reports, led to the Ethics Committee investigation, which in turn led Gingrich to make a limited confession of wrongdoing in January 19 97. The speaker pleaded guilty to the previously unknown offense of failing to seek detailed advice from a tax lawyer before proceeding with the course, and he also admitted that he had provided “inaccurate, incomplete, and unreliable” information to Ethics Committee investigators. In return, the House reprimanded Gingrich and levied an unprecedented $300,000 fine.
But the matter didn’t end there. As David Bonior had hoped, another government agency—the Internal Revenue Service— began an investigation of Gingrich. During a probe that took three years, the IRS carefully combed through the records of the college course, the workings of the Progress and Freedom Foundation, and the ways in which both related to Gingrich’s political network. After finishing the investigation early this year, the IRS sent the foundation a densely written, highly detailed 74-page report which reached this conclusion: Gingrich acted completely within the law. There was no massive tax-fraud scheme .
Of course, by that time no one could undo the damage to Gingrich ; he was out of Congress, widely assumed to be guilty, and $300,000 poorer after paying the fine with his own money . The report’s main value appeared to be as a correction of the historical record .
But it might ultimately be more than that . At some point in the not-too-distant future, the IRS investigation could become a key element of Gingrich’s rehabilitation . For a variety of reasons-among them his unstoppable stream of big ideas and his unmatched ability to raise large sums of money-Gingrich might well return to the front ranks of the Republican Party .
Cleared of accusations of wrongdoing, he might engineer a return to the national political stage much like Richard Nixon did after his own period of exile following electoral defeats in 196o and 1962. The IRS clearance could be the first small, but necessary, step of Newt Gingrich’s comeback.
Despite the intensive press coverage of the Gingrich ethics investigation — a database search of major media outlets reveals more than io,000 references to the speaker’s ethics problems during the six months leading up to his reprimand— there was little coverage of the actual content of “Renewing American Civilization.” Even after the release of the Ethics Committee’s 1,271-page report, which included detailed information on the course, few reporters took a close look at the substance of the classes.
The IRS, however, took a very close look. Investigators obtained tapes and transcripts of each session during the two years the course was taught at Kennesaw State College in northern Georgia, as well as videotapes of the third year of the course, taught at nearby Reinhardt College. IRS officials examined every word Gingrich spoke in every class; before investigating the financing and administration of the course, they first sought to determine whether it was in fact educational and whether it served to the political benefit of Gingrich, his political organization GOPAC, or the Republican Party as a whole.
The course consisted of ten classes, each hvo hours long. Most of the time was taken by Gingrich’s lectures, although there were occasional guest speakers. The first class was an introductory session in which Gingrich lectured on the uniqueness and diversity of the United States—praising leaders like Franklin D. Roosevelt, Harry Truman, and Ronald Reagan. He also introduced a number of his favorite themes: the “Third Wave” information revolution, the rise of world markets, and the destructive effects of the welfare state.
In the next session, Gingrich discussed the idea of individualism and the concept of equal opportunity. In the third class, he spoke on the subject of personal strength and integrity, which he told students was vital for a healthy and free society. He singled out leaders like John Lewis for particular praise (the same Lewis who would later accuse Gingrich of operating a massive taxfraud scheme). In the fourth class, Gingrich laid out his ideas on entrepreneurial free enterprise, with particular emphasis on the work of management guru Peter Drucker. In the next class, he examined the American spirit of invention and discovery, which, he warned, could be hobbled by bureaucracy, centralization, and excessive taxation. In the sixth class, Gingrich held forth on the concept of quality as outlined by Edwards Deming, a business theorist who was one of the speaker’s idols. Gingrich devoted the seventh class to the “Third Wave” teachings of Alvin and Heidi Toffler.
The eighth class discussed the world economic market; Gingrich again stressed his theme of the lassitude and decay of the welfare state versus the dynamism of society based on equal opportunity. The next-to-last class dealt with the American culture of violence and those who are working to change it; Gingrich admiringly described the efforts of Jimmy Carter, whom he called the most influential former president in modern times. The tenth and last class session was a restatement of all the earlier lectures with an emphasis on how they might apply to the twenty-first century.
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