Newt Gingrich in Trouble Again – Self-Dealing in the Nonprofit Sector

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June 15, 2011; Source: CNN Political Ticker | It is so damn difficult to be brilliant, visionary, and a presidential candidate to boot and avoid being hamstrung by pesky little things like questions and answers. Such is the life of Newt Gingrich, who is rapidly fading Republican presidential candidate.

It isn’t just that the former House Speaker has said he will brand any quotation of his criticism of Rep. Paul Ryan’s (R-WI) fiscal year 2012 budget proposal as a lie (well, “falsehood”, or that he was a bit unconvincing in explaining that carrying a $500,000 debt to Tiffany’s was a “normal way of doing business”, or that he hasn’t exactly won over critics that his campaign can stagger along in the aftermath of his entire campaign leadership bolting en masse earlier this week.

Now he faces a new problem – but those of us with memories of his time as Speaker will remember the new problem as same old same old Gingrich behavior when it comes to nonprofits and foundations. ABC News has revealed that Gingrich’s Renewing American Leadership nonprofit (ReAL) paid almost a quarter million dollars to an unusual vendor – the for-profit Gingrich Communications. Besides edging pretty obviously into self-dealing, ReAL seems to also, according to CNN’s report on ABC, “Serve . . . as another avenue to promote Gingrich's political views . . . dangerously close, some experts say, to crossing a bright line that is supposed to separate tax-exempt charitable work from both the political process and such profit-making enterprises as books and DVDs."

Why do reporters ask silly questions of Gingrich like ABC producer Angela Hill’s query, "Can you just answer the question as to why the charity you founded gave $200,000 to your for profit company?" And they expect answers too (Gingrich answered “no,” although later the remnants of his campaign said everything was legitimate). Still Hill persisted, leading to this exchange recounted by CNN: “‘Cover the speech,’ [Gingrich] told the producer. ‘I'm not concerned about that. The American people aren't concerned about that,’ Gingrich added before getting into his SUV and slamming the door.”

Maybe the press might have asked Gingrich’s longtime spokesperson, Rick Tyler, about the expenditure, since part of the more than $200,000 went to pay him in his role as part-time executive director of ReAL while an employee of Gingrich Communications (Tyler was one of the 16 campaign staffers who bolted this week).

Gingrich has long mucked around with nonprofits – commingling nonprofits and foundations he controlled with his business and political interests, earning him investigations and fines in Congress and probably a mess of legal troubles until the Bush White House ordered the Internal Revenue Service off the case (PDF). The ReAL story seems to be of a piece with prior Gingrich messes involving the Progress and Freedom Foundation, the Abraham Lincoln Opportunity Foundation, and his 1990s era political action committee (GOPAC).

We don’t mean to be dancing on the grave of Gingrich’s putative political campaign. Its real-time freefall is his own doing; just ask his former campaign staff. But nonprofits should demand that candidates of both political parties uphold the laws and standards of nonprofits and foundations. Or, in the alternative, a political candidate who misuses and abuses 501(c) entities should be seen as having disqualified himself or herself for the highest office in the land.—Rick Cohen

  • James Charles

    I understand your teaser statement on your email blast: “A presidential candidate who screws around with nonprofits and foundations disqualifies himself for the highest office in the land.”

    What I do not understand is your likely disregard of a similar statement: “A presidential candidate who screws around with INTERNS disqualifies himself for the highest office in the land.”

    Please let us know you are somewhat consistent.

  • rick cohen

    Dear James; Thank you for your comment. My newswires and my columns address nonprofit issues. I don’t write and haven’t written about sexual exploits of any of the candidates, past or present. I certainly don’t mind–and actually appreciate–your comments when they differ with things that I’ve said, but I can’t imagine why you would assume my “likely disregard” of a statement I haven’t made, a topic I haven’t addressed. Intellectually, that’s not quite right. If I were to address the sexual exploits of presidential candidates, hypothetical or real, I would be writing a different column. Since I don’t write that column, you don’t know what I would think about a hypothetical presidential candidate who
    “screws around with INTERNS” or with subordinates or with the staff of other politicians. You might be surprised about my opinion on the topic, but the subject matter and your charge about my “likely disregard” are inappropriate, unfair, not meriting a response on the specifics. Your approach of asking an unrelated topic and presuming consistency or inconsistency is not right. Now, where do you stand on whether a presidential candidate who misuses nonprofit funds for partisan political or personal enrichment purposes–that is, misuses nonprofit funds illegally–should be considered qualified or unqualified for the highest office in the land?

  • Brenda Rigdon

    Has everyone forgotten the delicious irony of Newt himself having an affair with an intern while he was trying to impeach Clinton for having an affair with an intern? I love short memories….

  • James Charles

    A fair critique of my assumptions. I apologize.

    If such allegations are true, then I would agree that a candidate should remove themselves from consideration. When someone breaches a trust, they do (at least morally) disqualify themselves.

    Now, where do you stand on critique of politicians who have inappropriate relationships? The reason for my skepticism is that you DON’T address these issues, but these are also breaches of trust that should disqualify someone.

  • rick cohen

    Dear Charles: Thanks very much for your apology, that’s very kind of you. Although, as I said, I write columns about nonprofits, not about sexuality, I can respond to your question is this way. I think it is abhorrent when people in power abuse their power over subordinates, including interns, for sexual and other inappropriate purposes. At NPQ, we have often written in the magazine about appropriate and inappropriate nonprofit CEO behavior (including in The Ethicist column). I think the question you raise is more an example of breach of ethics. An executive director who uses his or her power as the boss in such a relationship with a junior staff person has crossed the line, at least for me. I am not concerned about people’s personal lives outside of work, and consensual relations of that sort are a person’s personal issues. But in the workplace, when the relationship involves the significant imbalance of power that you raise (the boss versus an intern, even if the relationship is described as consensual), the relationship is inappropriate in my book. Thanks for your comment and thanks for your apology.