November 15, 1995

Representative Nancy Johnson

Chairwoman

House Committee on Standards of Official Conduct

U.S. House of Representatives

Washington, DC 20515

RE: Request for Outside Counsel Investigation of Speaker Newt Gingrich for Possible Violation of House Rules

Dear Chairwoman Johnson:

This letter constitutes a formal ethics complaint against House Speaker Newt Gingrich (R-GA), for allowing Donald Jones, a telecommunications entrepreneur, to act as a staff member on Rep. Gingrich's behalf in discussions with members of Congress and their staffs over telecommunications legislation. The appearance of this arrangement is highly objectionable; the import is that the Speaker seems to have turned over legislative duties on telecommunications matters to a representative of the telecommunications industry. This appears to be a violation of the House Code of Official Conduct Rule requiring honorable conduct by Members of the House of Representatives. Speaker Gingrich's actions also appear to contravene a House Rule prohibiting the private financing of a Congressional office.

We ask that the Committee immediately appoint an outside counsel to investigate Speaker Gingrich's conduct in this matter, and a similar ethics complaint we lodged on February 13, 1995. That complaint concerned Gingrich's relationship with Joe Gaylord, who is not a House employee but appeared to be performing official tasks within Speaker Gingrich's offices.

We are writing pursuant to House Rule 10, which authorizes the House Committee on Standards of Official Conduct to investigate "any alleged violation, by a Member, officer or employee of the House, of the Code of Official Conduct or of any law, rule, regulation or standard of conduct applicable to the conduct of such Member, officer, or employee in the performance of his duties or the discharge of his responsibilities..."

A: Gingrich's Relationship with Jones Violates the House Code of Official Conduct

In the Fall 1995 edition of "The Smithsonian Campus on the Mall," Donald G. Jones is identified as "president, Earning by Learning Foundation, Madison, Wisconsin and Telecommunications director for Speaker of the House Newt Gingrich, United States Congress, Washington."

In a November 10, 1995 Wall Street Journal article titled "Gingrich Backer Had Unusual Access As a Volunteer in the Speaker's Office," Phil Kuntz wrote:

Donald Jones...has taken the concept of being a Washington insider to new heights. The Wisconsin telecommunications entrepreneur enjoyed unusual access to the speaker as House leaders fine-tuned a sweeping telecommunications bill earlier this year.

He wasn't a member of the speaker's staff. Nor was he a lobbyist. Instead, he was a volunteer in Gingrich's office for up to three days a week, helping the Speaker on what Mr. Jones says were technical aspects of telecommunications matters, among other tasks....

[Mr. Jones's telecommunications] holdings are concentrated in a business called Cyberstar that has cable interests in Wisconsin and the Virgin Islands, and also this year invested $1.8 million to start a partnership called US Cyber that sells Internet access and related services....

His volunteer job, by all appearances, made him almost a de-facto member of the speaker's staff.

An October 15, 1995 Boston Globe article by Robert A. Jordan titled "Conflict of Interest Cloud Looms Over Gingrich" states:

GOPAC is apparently the source of a relationship between Gingrich and a multi-millionaire businessman named Donald G. Jones....

Jones was quoted two months ago in The New Yorker magazine as saying that Gingrich "challenged" him "to give more than my money" and Jones accepted. Since last December, he has been flying from Wisconsin to Gingrich's office two to three days a week...

In effect, Jones, who has ownership and interests in the telecommunications industry, is working out of Gingrich's office, [emphasis ours] discussing and apparently influencing legislation that has a direct impact on the telecommunications industry...

[Jones] apparently still owns a telecommunications system in Madison, Wisc., and has a five-county telecommunications industry contract in Georgia...Jones also has a controlling interest in US Cyber, a Wisconsin partnership that has constructed what is called a national "backbone" for the Internet...

As Jones wrote in a memo sent to other GOP supporters, "the content of the House bill is the subject of daily negotiations involving the Speaker, Committee Chairmen and a constant parade of TelCo [telephone company] CEOs. I participate as an observer and interpret and analyze the subtleties of the meeting for the Speaker, who is a remarkably good listener." [Emphasis ours.]

That the Speaker would apparently allow a telecommunications executive to act as "Telecommunications director for Speaker of the House Newt Gingrich" in negotiations over telecommunications legislation -- which may affect Jones's own holdings directly -- is cause for alarm. Speaker Gingrich should be severely reprimanded if he has provided a telecommunications executive, and the interests he represents, with special and inappropriate favors, access, power, and advantages in the legislative process on telecommunications issues.

Speaker Gingrich's behavior in this matter is highly corrosive to the public trust, and appears to be in violation of the House Code of Official Conduct. The Code states:

A Member, officer, or employee of the House of Representatives shall conduct himself at all times in a manner which shall reflect creditably on the House of Representatives.

B: Speaker Gingrich's Use of Mr. Jones's Services Likely Violates House Rule 45

The Wall Street Journal and Boston Globe articles paint a picture of how Donald Jones earns his money through his corporate holdings, and is therefore financially able to "volunteer" in Gingrich's office. In effect, this appears to be an improper scheme to finance a Congressional office with private funds.

The use of private resources to finance official House activities is fraught with serious ethical problems. A 1977 House of Representatives Commission on Administrative Review explained:

The Commission strongly believes that private funds should be used only for politically related purposes. Official allowances should reflect the necessary cost of official expenses. Increasing official allowances... to eliminate reliance on private sources represents a small cost to the public for the benefits to be derived. To suggest otherwise would be to accept or condone the continuation of a system which, at the very least, allows for the appearance of impropriety, and, at worst, creates a climate for potential "influence peddling" through private financing of the official expenses of Members of Congress.⁽¹⁾

House Rule 45, Clause 2 states that "no funds may be paid into any unofficial office account." The meaning of the term "unofficial office account" is broad, and encompasses in-kind contributions also. House Select Committee on Ethics Advisory Opinion No. 6 states:

The Select Committee finds that no distinction can be made between in-kind and monetary contributions. Whether the private support alluded to in the Commission's report is in the form of a monetary contribution or in the form of an in-kind service is not relevant in the view of the intended prohibition against the private financing of official business. Moreover, it can hardly be argued that donation of in-kind services is any less an infusion of private support for official business than is the donation of money.

At least two precedents for treating in-kind services as monetary contributions are found in regulations promulgated by the Federal Election Commission (FEC) and the Internal Revenue Service (IRS). Those regulations require the inclusion of in-kind donations as contributions to unofficial office accounts, thus confirming the Select Committee's understanding that money and in-kind contributions should be treated the same.⁽²⁾

C: Speaker Gingrich May Have Previously Violated House Rule 45

When considering what level of sanction is appropriate in this case, the Committee should bear in mind that Speaker Gingrich appears to have previously violated House Rule 45.

On February 13, 1995, we filed an ethics complaint with the Committee urging an investigation of the Speaker's relationship with Joe Gaylord. Several news articles indicated that Gaylord was performing official duties within Gingrich's office. But Gaylord is not an employee of the Congress.

Gingrich's likely repeated violations of these laws and House Rules makes it appear that he is flouting the rule of law. If true, such behavior cannot be tolerated -- and should be strongly condemned -- by the Committee.

D: Conclusion

Public confidence in the legislative process is precious and fragile. It is easily undermined by allowing interested private parties to have internal involvement and roles in the legislative process. Speaker Gingrich holds the highest and most powerful office within the House of Representatives. By assigning Donald Jones to function as a staff member within his offices, Speaker Gingrich has violated the public trust, and has added to the well-founded cynicism that many Americans harbor about the Congress and its legislative processes.

Sincerely,

Gary Ruskin

Director

Ralph Nader

This is to certify that I have today, by hand delivery, provided an exact copy of this complaint to the Respondent in this matter, Congressman Newt Gingrich, at the following address:

Congressman Newt Gingrich

2428 Rayburn House Office Building

U.S. House of Representatives

Washington, DC 20515

Gary Ruskin

Complainant

1. House Commission on Administrative Review, Financial Ethics, House Doc. No. 95-73, 95th Congress., 1st Sess. 18 (1977). Quoted in the House Ethics Manual at 218.

2. House Select Committee On Ethics Advisory Opinion No. 6, Issued May 9, 1977. House Ethics Manual at 233.