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.
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But Cole and the Ethics Committee maintained that Gingrich had not consulted the right lawyers. The committee’s chosen expert, a Washington attorney named Celia Roady, concluded that the college course violated the law. When Gingrich hired yet another lawyer, Holden, who argued that the course was legal, Cole made it clear he was not terribly impressed. “While that counsel [Holden] is an experienced tax attorney with a sterling reputation,” Cole told the committee, “he has less experience in dealing with tax-exempt organizations than does the expert retained by the subcommittee [Roady].”
So Gingrich was in a no-win situation. He was told that he should have gotten more legal advice, but when he got more legal advice he was told it was the wrong legal advice. And then, when it turned out in fact to have been the right legal advice, he was told he was to blame for all the fuss. “He did not take the trouble to get the advice he should have, and as a result, this matter is here today,” Cole told the committee.” The [investigating] subcommittee decided that, regardless of the resolution of the tax question, Mr. Gingrich’s conduct in this regard was improper, did not reflect creditably on the House, and was deserving of sanction.”
So the bottom line was: It didn’t really matter whether or not the course conformed with the law. It’s a decision that Cole is happy to defend. “What the committee found,” he explains, “was that this was so controversial, that it was so close a call, that a prudent person would have gone to a lawyer and said, ‘Give me your best view on this.”’ In fact, Cole thinks the issue of legal advice was so important that the committee would have been better pleased if Gingrich had received the wrong advice.
“Even if it turned out that the IRS said it wasn’t okay,” Cole says, “if he had prudently sought legal advice, I think the committee would have given him a walk on that.”
By the way, Cole and the committee managed to learn just about everything there was to know about the advice Gingrich received—because they deposed his lawyers. “Newt waived attorney- client privilege,” says Gingrich attorney Jan Baran, who, along with other Gingrich counsel, was questioned under oath by Cole and his investigators. Given the privilege battles that have characterized recent White House scandals, that in itself is extraordinary. “It was unbelievable that the committee was even seeking to depose lawyers,” Baran says. “I’m not aware of the Ethics Committee ever having sought the testimony of any member’s personal lawyer. Ever.”
The other charge to which Gingrich pleaded guilty was giving “inaccurate, incomplete, and unreliable” information to investigators. The charges were based on two letters Gingrich’s attorney prepared—which were approved and signed by Gingrich — in response to committee questions about the course. The first letter was sent in December 1994 and the second in March 199 5. They were weighty documents. The March letter, for example, was 52 pages long, had 31 exhibits, which took up another 235 pages, and took an attorney 1 40 hours to prepare. It was presented to Gingrich for his signature during the last week of the “loo Days” in which he pushed a dizzying array of reforms through the House of Representatives. The earlier letter was of similar size and was written while Gingrich was managing the transition to a Republican Congress after the 1994 election.
Describing the first letter, Cole told the committee that Gingrich “stated that the course had no partisan political aspects to it, that his motivation for teaching the course was not political and that GOPAC was neither involved in the course nor received any benefit from any aspect of the course.” Gingrich made essentially the same points in the March letter. Those assertions formed the basis of the charge that he provided inaccurate information to the committee. But some of those statements look quite different in light of the IRS decision.
The course had no partisan political aspects to it. Cole and the committee believed Gingrich was lying when he insisted that the course was non-partisan. But the IRS ruling could not be any clearer on this question; Gingrich was telling the truth.
His motivation for teaching the course was not political. Again, Cole and the committee believed Gingrich was lying. But given the IRS decision, this accusation in effect condemns Gingrich’s motives for behaving lawfully. And besides, even if one assumes that Gingrich has political motivations for everything, it is also beyond dispute that Gingrich, who had been a college professor before going to Congress, also had educational motives for his decision to teach the course.
GOPAC was neither involved in the course nor received any benefit from any aspect of the course. The IRS found that GOPAC did not receive any benefit from the course, so Gingrich was right again. He was, however, wrong when he said GOPAC had not been involved. The IRS, like the committee before it, found that people affiliated with GOPAC “were involved in the development of the course content, fundraising, and other logistics.” But the IRS noted that Gingrich took care to keep GOPAC separate from the course by “the prompt establishment of the Progress and Freedom Foundation as a broadly funded, fully separate entity from GOPAC.” In addition, while Gingrich’s letter was wrong in denying any GOPAC involvement, it is not at all clear that he was trying to fool the committee. In interviews with committee investigators, he openly conceded the GOPAC connection— in effect correcting his letter.
Given those facts, in retrospect one has to ask: Why did Gingrich plead guilty and agree to pay such an enormous fine? To grasp the answer, one has only to remember the white-hot environment of the months following the Republican takeover of Congress. “The atmosphere at the time was so rancorous, partisan, and personal that everyone, including Newt, was desperately seeking a way to end the whole thing,” recalls Gingrich attorney Jan Baran. “He was admitting to whatever he could to get the case over with.”
“By the time you got to late 1996, he had lost the substantive argument,” Jeffrey Eisenach recalls, “which was: is it okay for a politician to teach a clearly non-partisan college course?” Even though Gingrich believed—correctly, as it turned out—that the answer was yes, he was under almost daily attack from Bonior and other Democrats who leveled accusation after accusation against him. In all, they filed more than 8o ethics complaints against the new speaker; all except the college course matter were thrown out by the committee.
Gingrich could either confess to a set of charges that he and his supporters knew to be without merit, or fight a protracted and damaging battle on the college course while still potentially facing other charges. Pleading guilty, even agreeing to pay the fine, seemed the only way for Gingrich to keep his job and his political future. “He’d gotten himself into an ugly situation, and he had to get out,” says Eisenach. “It was pragmatism over principle.”
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