December 26, 1996
Chairman Nancy Johnson
Vice-Chairman Jim McDermott
House Committee on Standards of Official Conduct
HT-2, The Capitol
United States House of Representatives
Washington, DC 20515
RE: Sanction Hearing for House Speaker Newt Gingrich,
and Other Related Matters
Dear Chairman Johnson and Vice-Chairman McDermott:
On December 21, 1996, the Investigative Subcommittee of the House Committee on Standards of Official Conduct issued a Statement of Alleged Violation in the Matter of House Speaker Newt Gingrich (R-GA). On the same day, Speaker Gingrich admitted to the Statement of Alleged Violation.
The Ethics Committee now has several matters pending before it, including, most importantly, what level of sanction the Committee will apply to the Speaker. We believe that, at a minimum, the Speaker must be punished with censure for his long record of violations of House Rules and other improper conduct.
Other pending matters include whether the Committee will refer any charges against the Speaker to the Justice Department, and whether the Committee will release the work products of Special Counsel James Cole and the Investigative Subcommittee's tax expert. We believe that Special Counsel James Cole's report, and materials prepared by the Investigative Subcommittee's tax expert, should be made public well before any House floor vote to sanction the Speaker.
A: The Ethics Committee Should Censure or Expel Speaker Newt Gingrich
The December 21, 1996 Statement of Alleged Violation is not the first time that the Ethics Committee has criticized Speaker Newt Gingrich. When considering what level of sanction to apply to Speaker Gingrich, the Committee should bear in mind that it has repeatedly criticized Speaker Gingrich for violations of House Rules or other improper conduct. (See Appendix A).
House Speaker Newt Gingrich is a repeat offender against House Rules and basic standards of
Congressional conduct. His long and dishonorable record before the House Ethics Committee
shows that he holds little if any respect for the Rules of the U.S. House of Representatives.
The Statement of Alleged Violation issued on December 21, 1996 shows that the Speaker made
thirteen false or misleading statements through counsel to the Ethics Committee about GOPAC
and/or the "Renewing American Civilization" course. (See Appendix B).
The Statement of Alleged Violation amply documents the Speaker's misstatements and
omissions. These were not trivial errors. Rather, the Speaker made false statements or critical
omissions thirteen times, through counsel, about material facts at the core of the whether he had
violated federal tax laws.
Furthermore, it defies credibility to argue, as the Speaker does, that these false statements were
not intentional. Again, he did not make just one minor immaterial mistake in one document.
That Speaker Gingrich made thirteen false statements through counsel to the Ethics Committee
constitutes thirteen serious offenses. Each offense should be punished by the Ethics Committee.
Members of Congress cannot be permitted to lie -- even once -- to the Ethics Committee, or the
United States Congress, without appropriate sanctions. Speaker Gingrich's offenses go to the
heart of the Ethics Committee and the Congress. His actions show utter contempt for the House
Committee on Standards of Official Conduct, and the United States Congress.
The Investigative Subcommittee is silent on whether the Speaker's thirteen false statements
constitute obstruction of justice. The full Ethics Committee must determine whether it believes
that the Speaker may have obstructed justice. If it does find that obstruction of justice may have
occurred, the Ethics Committee should formally refer the matter to the Justice Department.
House Committees have on many occasions referred to the Justice Department possible false
statements to House Committees. If the Committee does not formally refer Speaker Gingrich's
false and misleading statements to the Justice Department, it should provide an explanation as to
why there will be no formal referral.
The Speaker defends his conduct with respect to likely violations of federal tax law by arguing
that he did not seek advice of counsel, and was ignorant of tax law. Even if true, surely this is a
weak defense. The Internal Revenue Service has traditionally taken a dim view of taxpayers who
plead ignorance of the law. Speaker Gingrich must be held to a similar standard.
B: Speaker Gingrich Has Likely Committed an Offense Against The Taxpayers
The Ethics Committee must bear in mind that the Speaker has likely committed an offense
against the taxpayers by bilking them of tax monies that should have gone to the U.S. Treasury.
The Los Angeles Times explained that
...six nonprofit groups shared a direct connection to GOPAC between 1985 and 1995, when
Gingrich was its chairman, records show. They were run by GOPAC officers and consultants,
Gingrich campaign advisors and congressional staffers. Some even worked directly out of
GOPAC headquarters. The foundations generated at least $6 million combined in tax-deductible
contributions that were outside the purview of federal election law.(1)
This likely offense against the taxpayers is a serious one. Members of Congress are trustees of
the public purse. Their job is -- in part -- to safeguard the taxpayers' money from raids by the
greedy, the selfish, and the undeserving. Speaker Gingrich has violated the taxpayers' trust by
deception and dissembling.
C: Speaker Gingrich's Use of the Abraham Lincoln Opportunity Foundation for Partisan
Political Activity Was Reprehensible
The Abraham Lincoln Opportunity Foundation (ALOF) was established as a charity to assist
inner city youth. Instead, Speaker Gingrich used this charitable foundation to produce and
broadcast "American Citizens' Television," which was partisan political television programming.
According to the Investigative Subcommittee's tax expert, two of the three television shows
"were intended to confer more than insubstantial benefits on GOPAC and Republican entities
and candidates; and provided support to GOPAC." This fraudulent use of a tax-exempt
organization chartered for a noble purpose is highly repugnant, and entirely inexcusable. Speaker
Gingrich's conduct is reprehensible, in part, because of the sheer cynicism of it.
D: The Speaker's Defense That He Was Ignorant of Tax Law is Not Credible
In his statement on December 21, 1996, Speaker Gingrich stated that "I did not seek legal
counsel when I should have in order to ensure clear compliance with all applicable laws, and that
was wrong." As a member of Congress, Speaker Gingrich should have avoided even the
appearance of impropriety. Ignorance of the law is not a credible defense.
Furthermore, according to Roll Call, a GOPAC lawyer warned of the possible problems
regarding misuse of foundation monies by the Abraham Lincoln Opportunity Foundation for
partisan political purposes.
A 1990 document written by a GOPAC attorney warned against using a tax exempt charity. "A
very controversial program is being undertaken by a [section 501] (c)3, indicating that it may
have involvement in the electoral process, not withstanding the express prohibition on it," wrote
Gordon Strauss.(2)
Contrary to Speaker Gingrich's protestations, a GOPAC attorney did analyze the use of
foundations for partisan political activity, and warned of precisely the problem that is at issue
before the Ethics Committee.
The third reason for the lack of credibility of Gingrich's statement stems from the career path of
Joseph Gaylord, Gingrich's top political advisor. Pollster Frank Luntz once said that "Other than
his wife and family, Joe Gaylord is the most important person in Newt's world."(3)
Gaylord has been a consultant to GOPAC, and was involved in the development of the
"Renewing American Civilization" course. Gaylord was in charge of organizing satellite
transmission for the course. And Gaylord's name appears on many of the internal memoranda
for the course.(4)
Back in 1986, Joseph Gaylord founded the American Campaign Academy, a non-profit
organization devoted to teaching campaign skills. The Academy argued to the Internal Revenue
Service that it was "purely educational" and "non-partisan." However, the Academy was funded
entirely by the National Republican Congressional Trust, and trained exclusively Republican
candidates.
In 1989, the U.S. Tax Court revoked the tax-exempt status of the Academy.(5) The Tax Court
argued that the Academy "conducted its educational activities with the partisan objective of
benefitting Republican candidates and entities." The IRS stated that the Academy had "sought to
hide the Republican Party connection."(6)
The American Campaign Academy pattern of use of foundation monies for partisan political
purposes was replicated by the Speaker in the Abraham Lincoln Opportunity Foundation, and
finally, the Progress and Freedom Foundation, and the Kennesaw State College Foundation.
E: Call for Public Release of the Work Product of the Investigative Subcommittee's Tax
Expert
The Investigative Subcommittee did not rule on whether Speaker Gingrich's activities on behalf
of the Abraham Lincoln Opportunity Foundation, Kennesaw State College Foundation, Progress
and Freedom Foundation, or Reinhardt College were in violation of section 501(c)(3) of the
Internal Revenue Code. However, the tax expert hired by the Investigative Subcommittee
concluded, according to the Statement of Alleged Violation, that the Speaker's activities did in
fact violate section 501(c)(3) of the Internal Revenue Code.
We formally request that any written opinion prepared by the Investigative Subcommittee's tax
expert be made available to the public. The Investigative Subcommittee's tax expert was hired
with taxpayer dollars. The public should be able to read the tax expert's written work product to
evaluate the analysis and arguments made therein.
F: Call for Public Release of the Findings and Report of the Special Counsel
Special Counsel James Cole was hired by the Ethics Committee on January 3, 1996 to
investigate the Speaker pursuant to the Committee's Resolution of Preliminary Inquiry. In a
September 26, 1996 Interim Report, the Investigative Subcommittee indicated that:
To date the Preliminary Inquiry has involved, among other things, the interviewing of 40
witnesses and review of documents produced in response to 52 subpoenas or requests for
documents. This activity was substantially completed by August 13, 1996.
On August 18, 1996, The New York Times indicated that the Special Counsel had filed a report
with the Investigative Subcommittee.
Although the Investigative Subcommittee has issued its Statement of Alleged Violation, it has
not released the work product of Special Counsel James Cole. The Committee should release
Special Counsel Cole's report, and any other of his findings, to the public. Otherwise, the public
cannot evaluate the work of the Special Counsel or of the Investigative Subcommittee.
Public review of the Special Counsel's and Investigative Subcommittee's work is critical to a
fair, thorough, and credible ethics process. Speaker Gingrich himself has argued for this public
accountability regarding the matter of then-Speaker Jim Wright:
The rules normally applied by the Ethics Committee to an investigation of a typical member are
insufficient in an investigation of the Speaker of the House, a position which is third in the line
of succession to the Presidency and the second most powerful elected position in America.
Clearly, this investigation has to meet a higher standard of public accountability and integrity.(7)
G: Speaker Gingrich's Sanction Hearing Before the Ethics Committee Should be Public,
Not Secret
The Speaker's sanction hearing should be public because a public sanction hearing is necessary
for a credible ethics process. To date, the secrecy of the ethics process has already undermined
the result of the ethics process in the Gingrich case. If the Speaker's sanction hearing is held in
secret, it will further undermine the legitimacy and credibility of the sanction approved by the
Committee.
Furthermore, there is no compelling reason why the sanction hearing should be closed to the
public. Ethics Committee rules allow for the sanction hearing to be public. No Ethics Committee
rule prevents a public sanction hearing.
H: Speaker Gingrich's Claim that He Did Not Seek Personal Gain Is Questionable
On December 21, Speaker Gingrich claimed that he "did not seek personal gain" as a part of his
unseemly conduct. This claim is questionable. Speaker Gingrich likely reaped intangible
personal benefit by the activities of the foundations associated with his 'Renewing American
Civilization" college course. Frances Hill, a respected tax expert and associate professor at the
University of Miami Law School, has written that Gingrich may have derived
an impermissible private benefit [from the Renewing American Civilization course] in the form
of financial support for the dissemination of his ideas. A private benefit analysis is not defeated
by Gingrich's having forgone any salary for giving his lectures. The intangible benefit of
disseminating his ideas, especially with the presumption of scholarly legitimacy and academic
respectability that at least some might accord the course because of its particular packaging could
constitute a private benefit.(8)
I: Conclusion
Incredibly, the Ethics Committee has yet to punish Speaker Gingrich, even though he bears a
long record of violations of House Rules and other improper conduct. The Ethics Committee
has, thus far, ignored the cumulative impact that establishes a pattern of wrongdoing.
The Ethics Committee must act with an eye toward the incentives it establishes. If the
Committee punishes the Speaker with censure or expulsion for his pattern of violations of House
Rules, it will likely deter other members of Congress from committing such long strings of
blameworthy conduct in the future. But if the Committee merely slaps the Speaker on the wrist,
then it will invite other members of Congress to violate House Rules, because they will
understand that they act with impunity, without fear of rebuke from the House Ethics Committee.
The Ethics Committee must act with the conscious knowledge of the effect of its decisions upon
the public, and particularly upon the younger generation of Americans. Failure to punish the
Speaker would send a signal that one can repeatedly run afoul of important rules and not suffer
adverse consequences. This would be the wrong signal to send.
House Speaker Newt Gingrich is the third highest constitutional officer in the federal
government. Because he holds one of the most powerful elective offices in the United States, his
conduct requires a higher level of accountability. The American people and the House of
Representatives have placed great trust in him; they have elected him Speaker. But the Speaker
has repeatedly, and admittedly, violated this trust. He must be held accountable for his actions.
Following this Statement of Alleged Violation, the Speaker must, at a minimum, be forced from
the Speaker's Chair, if not expelled from the House of Representatives entirely.
Sincerely,
Gary Ruskin
Director
Appendix A
The Ethics Committee Has Repeatedly Criticized Speaker Gingrich for Violations of House
Rules and Other Blameworthy Conduct:
The Committee concludes that your conduct of allowing the routine presence in your office of
Mr. Jones demonstrates a continuing pattern of lax administration and poor judgement that has
concerned this committee in the past. Accordingly, the Committee directs that you take
immediate steps not only to prevent the recurrence of similar incidents and ensure compliance
with applicable standards, but also to guard against even the appearance of impropriety.(9)
Based on this Committee's construction of House Rule 45, Mr. Jones' participation in your office
as an "informal advisor" did not comply with applicable guidelines issued by this Committee
governing interns or volunteers.(10)
...the Committee strongly questions the appropriateness of what some could describe as an
attempt by you to capitalize on your office. As recent events demonstrate, existing rules permit a
Member to reap significant and immediate financial benefit which appears to be based primarily
on his or her position. At a minimum, this creates the impression of exploiting one's office for
personal gain. Such a perception is especially troubling when it pertains to the office of the
Speaker of the House, a constitutional office requiring the highest standards of ethical behavior.(11)
Regarding the activities of consultant Joseph Gaylord in the Speaker's offices (1995): ...the Committee has found that your use of Mr. Joseph Gaylord was in violation of House Rule
45, which prohibits the use of unofficial resources for official purposes.(12)
...the Committee has found a misuse of the House Floor....The House Floor should not be used
for commercial purposes, and since a caller to this number was offered only the option of buying
a set of tapes, the Committee finds the use of a 1-800 number to be an improper solicitation. (13)
...the Committee has found a similar violation in your references on the House Floor in 1990
regarding a nationwide town meeting sponsored by GOPAC.(14)
The Committee concludes that you were remiss in your oversight and administration of your
congressional office, which gave rise to the improper correspondence cited in the complaint.
Accordingly, you are directed to immediately take steps to preclude recurrence of the type of
improper activity here involved. You are further placed on notice that a future recurrence of
improper use of mail and resources may result in more severe Committee action.(15)
The Committee has also determined that the acquisition of certain real estate with your daughter,
as well as the underlying liability you incurred, should have been reported on your Financial
Disclosure Statements for the appropriate calendar years.(16)
Appendix B
House Speaker Gingrich Made Thirteen False or Misleading Statements Through Counsel
to the Ethics Committee.
The primary issue before the Investigative Subcommittee was whether the Speaker Gingrich
violated Section 501(c)(3) of the Internal Revenue Code by misusing tax-exempt monies for
partisan political purposes. On December 6, 1995, the Committee approved a Resolution of
Preliminary Inquiry to
determine if there is reason to believe that Representative Gingrich's activities in relation to the
college course "Renewing American Civilization" were in violation of section 501(c)(3) or
whether any foundation qualified under section 501(c)(3), with respect to the course, violated its
status with the knowledge and approval of Representative Gingrich...
On September 26, 1996, the Committee expanded the investigation to include, among other
things, whether the Speaker had provided "accurate, reliable, and complete information" to the
Committee. Some of the results of that expanded inquiry have now been made public.
The Statement of Alleged Violation issued on December 21, 1996 shows that the Speaker made
at least thirteen false or misleading statements through counsel to the Ethics Committee about
GOPAC and/or the "Renewing American Civilization" course. In his December 8, 1994 letter to
the Committee, the Speaker made at least seven false or misleading statements.
The Statement of Alleged Violation indicates that "According to testimony before the
Subcommittee, the six page December 8, 1994 letter was prepared by Mr. Gingrich's attorney
and submitted to Mr. Gingrich for review during the transition following the 1994 election." The
Statement of Alleged Violation declares that "Mr. Gingrich, however, remained ultimately
responsible for fully, fairly, and accurately responding to the Committee."
The March 27, 1995 letter to the Committee contains six additional false or misleading
statements:
The Statement of Alleged Violation indicates that "Prior to the letter from Mr. Gingrich's
attorney being delivered to the Committee, Mr. Gingrich reviewed it and approved its submission
to the Committee. The ultimate responsibility for the accuracy of information submitted to the
Committee remained with Mr. Gingrich."
Endnotes
1. Glenn F. Bunting, "Gingrich's Politics Got Boost From Nonprofits; Foundations: The GOP
Leader's Use of 6 Tax-Exempt Agencies Raises Questions By Legal Experts, Special Counsel."
Los Angeles Times, June 25, 1996.
2. Damon Chappie, "Tax Returns Suggest Charity Was a 'Conduit' for GOPAC." Roll Call, May
2, 1996.
3. Phil Kuntz, "Joseph Gaylord, Newt Gingrich's 'Eyes and Ears' Is Expected to Play a Major
Role in Washington." Wall Street Journal, December 8, 1994.
4. Glenn R. Simpson, "New Addition to the Gingrich Family Tree: The Progress and Freedom
Foundation." Roll Call, September 12, 1994.
5. American Campaign Academy v. Commissioner of Internal Revenue, 92 T.C. 1053 (1989).
6. Glenn F. Bunting, "Gingrich's Politics Got Boost From Nonprofits; Foundations: The GOP
Leader's Use of 6 Tax-Exempt Agencies Raises Questions By Legal Experts, Special Counsel."
Los Angeles Times, June 25, 1996.
7. Representative Newt Gingrich, News Release, "Gingrich Insists on Thorough Investigation."
July 28, 1988, p. 3.
8. Frances R. Hill, "Newt Gingrich and Oliver Twist: Charitable Contributions and Campaign
Finance." Tax Notes Today, January 12, 1995.
9. Correspondence from House Committee on Standards of Official Conduct Chairman Nancy L.
Johnson and Ranking Democratic Member Jim McDermott to The Honorable Newt Gingrich,
September 19, 1996.
10. Correspondence from House Committee on Standards of Official Conduct Chairman Nancy
L. Johnson and Ranking Democratic Member Jim McDermott to Speaker Newt Gingrich, March
29, 1996.
11. Correspondence from House Committee on Standards of Official Conduct Chairman Nancy
L. Johnson and Ranking Democratic Member Jim McDermott to Speaker Newt Gingrich,
December 6, 1995.
12. Ibid.
13. Ibid.
14. Ibid.
15. Correspondence from House Committee on Standards of Official Conduct Chairman Julian
C. Dixon and Ranking Minority Member John T. Myers to Representative Newt Gingrich,
March 8, 1990.
16. Ibid.