Thu December 8, 2011
Gingrich's Path From 'Flameout' To D.C. Entrepreneur
Originally published on Thu December 8, 2011 11:12 am
A new poll released Wednesday by Time magazine and CNN finds Newt Gingrich staying ahead of Mitt Romney in three out of the four states with January primaries or caucuses.
Gingrich's lead in the key primary states has sparked private discussions among President Obama's advisers about the former House speaker's "realistic chance" of winning the Republican presidential nomination, CBS News reported.
Though Gingrich's campaign is currently in debt, Gingrich himself has made a fortune. Over the past decade, Gingrich has "transfigured himself from a political flameout into a thriving business conglomerate," writes Washington Post national political correspondent Karen Tumulty.
On Thursday's Fresh Air, Tumulty — who has covered Gingrich for decades — talks about his quick rise in the 2012 presidential race and his appeal to Tea Party members, who see him as a "Washington outsider." She also details how he became a wealthy man after leaving Congress, by what she describes as "playing the Washington system in an entrepreneurial way."
Gingrich has generated millions of dollars in revenue over the past decade through his consulting practice, his lecture fees, an in-house literary agency and his for-profit think tank, which businesses join by paying annual membership fees ranging from $20,000 to $200,000, says Tumulty.
When he decided to run for president, Gingrich "disentangled himself from most of the firms," she writes. But some of his business dealings continue to raise eyebrows in Washington, she says, including up to $1.8 million Gingrich received as a consulting fee from the mortgage giant Freddie Mac. Gingrich said he was acting as a "historian" for Freddie Mac — not a lobbyist.
"He argues that what he did was give them advice," she tells Fresh Air's Terry Gross. "He also says he warned them that their business model was flawed. There is no secondary source that has been willing to confirm that. But the fact is, he was hired to help them promote their agenda. So I think this has become a big problem for him out on the campaign trail. And his opponents are going to say, 'How are we supposed to press the arguments about Fannie and Freddie in next fall's election if our standard-bearer was on their payroll?' "
Gingrich also received money from his nonprofit political advocacy group, American Solutions for Winning the Future. Before it closed last summer, the group generated more than $50 million in revenue. Some former officials of the organization have told Tumulty that the organization also provided money for Gingrich to travel by private jet and limousine to nonprofit events that coincided with his for-profit operations.
"Some of the former officials of American Solutions — [Gingrich] denies it — say that sometimes the bookkeeping was set up so that American Solutions would pay his travel expenses," she says. "His own lawyers say they were very, very careful about the use of private aircraft ... and that everything was properly billed. But former officials of his two enterprises — American Solutions and his for-profit enterprises — say that was not their impression."
Tumulty is a national political correspondent for The Washington Post. She has also written for Time magazine and the Los Angeles Times. She was awarded the Gerald Loeb Award for distinguished business and financial journalism in 1982 and the National Press Foundation Edwin Hood Award for diplomatic correspondence in 1993. She was previously on Fresh Air to discuss her brother Patrick's health problems.
On what has been the most interesting part of covering the 2012 presidential primary
"I think everything we thought we could assume at the beginning has turned out to be so wrong, and Newt Gingrich's resurrection is probably the very best case of that. Given where he was in June, I would have never thought he would even still be in the race at this point, much less leading it. And the stumbles — Republican races have generally been more like coronations. They figure out their front-runner usually in February of the year before the election, and that person usually has a pretty straight shot to the nomination. What we've seen this year has just been so remarkable."
On the future of Gingrich's candidacy
"Two big questions about Newt Gingrich I think right now are: whether he can maintain the type of discipline people expect of a presidential candidate, [and whether] he can marshal the resources and organization that will carry him forward in this campaign beyond Iowa and New Hampshire and South Carolina. Because if this becomes a long, drawn-out primary — the kind we usually see in the Democrats — organization and money are going to matter a lot. We know that Mitt Romney has both of these things, and it is yet to be seen whether Newt Gingrich can pull all of that together, especially because his surge has come so late."
On the lack of support for Gingrich among representatives who served in Congress with him
"I have found so many people who were in Congress at the time [Newt Gingrich was in Congress] who are very uneasy about this surge that they are seeing on Newt Gingrich's part. One of his closest friends in the House was Minnesota Congressman Vin Weber. He's now supporting Mitt Romney. I think that people in Washington who saw him in action are generally pretty uneasy. They're worried about his lack of discipline in the past. They're worried about his penchant for doing things that hurt the party. So you are not seeing very many of his former congressional allies supporting him."
On Gingrich's for-profit think tank
"He would not actually ... pick up the phone and say, 'Congressman X, would you agree to meet with Corporation Y.' But he would arrange things like conferences where businesses would have a chance to rub elbows with policymakers. And another thing he would do, he would become a very public advocate for some of the causes ... that were also good for these companies' bottom lines."
On Gingrich's power in Washington in the mid-1990s
"For a while there, the House of Representatives was so powerful in Washington, that the then-president of the United States — Bill Clinton — actually had to assert one time, during a news conference, that he was still relevant. ... [In 1994, Gingrich] brought into office, with his new majority, a new kind of politician — one who did not feel particularly beholden to the party structure. ... People who didn't have as much regard or respect for the structures of the institution. And I do think that the culture of the House has never been the same. And to some degree, the culture of the Senate hasn't either."
On Tea Party support for Gingrich
"A lot of Newt Gingrich's support is coming from Tea Party members, from the grass roots. They see in Newt Gingrich a voice for their own frustrations with Washington, and they also believe ... that next fall, Newt Gingrich would be the man they'd want to see on a debate stage against Barack Obama. ... They remember Newt Gingrich as very much a force for change in the party."
On the government shutdown in 1995
"In 1995, [Gingrich] decided that he was going to get through a very large tax cut that was going to be paid for by reductions in Medicare spending. And that was actually the issue that led to the now-infamous government shutdown at the end of 1995. That was the point where the Democrats and Bill Clinton basically found his voice again. And Gingrich said, 'I am going to push this, and if necessary I am going to shut down the government.' And he did. And this shutdown went on for weeks, but ultimately the public saw this, it disapproved of this, and it very much blamed the Republicans for it. And I think in many ways, that laid the premise for Bill Clinton's re-election in 1996. And after that, interestingly enough, we also saw a very productive period in the Congress."
TERRY GROSS, HOST:
This is FRESH AIR. I'm Terry Gross. New polls released yesterday by Time magazine and CNN show Newt Gingrich leading in three of the four states with January primaries or caucuses, and he's in second place behind Mitt Romney in New Hampshire.
We're going to take a look back at Gingrich's political career, how he led the Republican revolution in 1994, became House speaker, led the impeachment proceedings against President Clinton and then lost so much power within his party that he resigned in 1998, soon after he was re-elected. Later, we'll talk about how he used his influence after leaving office to create a collection of enterprises through which he personally earned $55 million.
My guest Karen Tumulty has covered Gingrich for decades. She was a congressional correspondent for the L.A. Times; she reported on Congress, the White House and politics for Time magazine; and since last year, she's been national political correspondent for the Washington Post.
Karen Tumulty, welcome back to FRESH AIR. I want to, you know, recap Newt Gingrich's political history. So let's get back to 1995, at the end of the year, when you co-wrote the Time magazine "Man of the Year" story, and Newt Gingrich was the man of the year.
In that article, you describe Gingrich as having killed the old order of American politics. What did you mean by that?
KAREN TUMULTY: Well, before the Republicans took over the House in 1994, very much under Newt Gingrich's leadership, it had been four decades since they had been in control of the House. And in that time, the party had become, not only a minority party there, but virtually irrelevant. And it really was Newt Gingrich who changed all that, and rose from the back benches of the House, first overthrew his own leadership and then managed to get a majority in the House.
And for a while there, the House of Representatives, you know, was so powerful in Washington that the then president of the United States, Bill Clinton, actually had to, at one point during a news conference, assert that he was still relevant.
GROSS: So what are some of the things that Newt Gingrich did in the House of Representatives to change the power structure within it?
TUMULTY: Well, the first thing he did, obviously, was bring his party to power. But he brought into office, I think, with his new majority, a new kind of politician, one who did not feel particularly beholden to the party structure. These were people who I think would have even referred to themselves as a lot more radical than their predecessors, people who didn't have as much regard or respect for, sort of, the structures of the institution.
And, you know, I do think that the culture of the House has never been the same, and to some degree the culture of the Senate hasn't, either, because a lot of those - that class of 1994 is actually in the United States Senate now. And again, we are seeing - you know, I think you can argue that on the one hand, they have been a force for change, but on the other they've been a force for gridlock.
GROSS: Well, wasn't it one of Newt Gingrich's tactics to just block everything Democratic?
TUMULTY: No, actually, he came in, interestingly enough, with a very clear agenda, the Contract with America, which had 10 points to it, largely avoiding social issues. These were all things like a balanced budget amendment, and term limits was part of that. These were all things that were polling extraordinarily well with the public.
And he passed, I believe, nine of those 10 points through the House in that first year, and it was actually the Senate where this was blocked. But what then happened was, I think what most people would regard as one of the great overreaches of modern political history, which was in 1995, he also decided that he was going to get through a very large tax cut that was going to be paid for, in large part, by reductions in Medicare spending. And that was actually the issue that led to the now-infamous government shutdown at the end of 1995.
GROSS: And when the government was shut down, it was because Newt Gingrich and fellow Republicans refused to pass the budget that would have kept government going.
TUMULTY: That's right. They refused to pass it unless it included their tax cuts and their reductions in Medicare spending.
GROSS: But then there was the issue of, you know, was Newt Gingrich resentful that President Clinton didn't invite him on Air Force One, and did that help provoke the government shutdown. What was that about?
TUMULTY: Oh, it was so interesting. I was actually at the breakfast where Newt Gingrich made those comments. And he...
GROSS: Wait, what comments, what comments?
TUMULTY: Well, basically he was at a regular breakfast that they have with reporters here in Washington, and he started talking about the reasons the government shut down. And he said to a roomful of reporters - and one of the reasons I decided to take such a hard line was that I was flying back in Air Force One from a funeral in Israel, and the president didn't let me sit up front.
And you could just see his press secretary at the time, Tony Blankley, I remember seeing, as Newt would get deeper and deeper and deeper into this story, finally Tony Blankley gets up, and he's pacing the back of the room, chain-smoking, because he realizes that the speaker is creating a big problem for himself, looking as though he would shut down the government in a fit of pique.
And of course, by the way, the White House later released photos of Newt Gingrich talking to the president on Air Force One, and the New York Daily News, I believe it was, had a now-classic cover the next day, which was a picture of - a caricature, a cartoon of Newt Gingrich as a wailing baby in a diaper, and the headline was: Crybaby.
GROSS: So my guest is Karen Tumulty, and she covers national politics for the Washington Post and before that covered politics, Congress and the White House for Time magazine. And over the years, she's written extensively about Newt Gingrich, who's the subject of our conversation today.
So among the things he did in the House was change some of the power structure in the House. You've described how he dismantled committees, changed - did away with some of the seniority system. Describe some of those internal changes, why he did it and what the long-term impact has been.
TUMULTY: Well, the real goal was to concentrate a lot of power in the speaker's office. So by term-limiting chairmen, he limited their ability to build their own fiefdoms and their own core of people who were loyal to the chairman, as opposed to being loyal to the speaker.
He instituted a number of other changes in the House, again, that all were aimed at giving the speaker's office the power to control the agenda. You know, we talk about people in history like Sam Rayburn as having been powerful speakers. But the fact is, that they were very much the traffic cops. They were very often held hostage by their own committee chairmen.
And Newt Gingrich had studied this, and he was determined that was not going to happen on his watch. Now, the problem was that his own leadership team and his own management skills, often seemed like they were not up to the very powerful tools they had, and it was very much of a dysfunctional leadership team.
And at one point, they actually attempted to stage a coup that would - his own lieutenants, Dick Armey and Tom DeLay, tried to stage a coup that would have overthrown the speaker, and Newt Gingrich essentially found out about it. And he called everyone in, and he brought in people who were loyal to him. And, you know, ultimately, all of the other leaders, who were actually in on it, were claiming, publicly, that hadn't known nothing about it.
And from then on out, this was a very, very uneasy relationship among Newt Gingrich, his then-majority leader, Dick Armey, and the then-majority whip, Tom DeLay. And they were all, from there on out, watching their own backs.
GROSS: So two of people who - at least two of the people who were in on the coup, Dick Armey and John Boehner, are still, like, very powerful in politics now. Dick Armey runs one of the groups that funds the Tea Party, and John Boehner is the House speaker. So would you expect that they would be working against Newt Gingrich now?
TUMULTY: It is really interesting, because I have found so many people who were in Congress at the time are very uneasy about this surge that they are seeing on Newt Gingrich's part. I think that people in Washington who saw him in action are generally pretty uneasy. They're worried about his lack of discipline in the past. They are worried about his penchant for doing things that damage the party. So you are not seeing very many of his former Congressional allies jumping on the bandwagon.
GROSS: So they're not jumping on the bandwagon, but if somebody like Dick Armey, who has a lot of money through his organization that backs, you know, the Tea Party, is he actively working against Newt Gingrich?
TUMULTY: Here's the problem: The Tea Party doesn't like Mitt Romney, either. And also there's a - I think there's a problem for somebody like Dick Armey, because a lot of Newt Gingrich's support is coming from Tea Party members, from the grassroots, because they see in Newt Gingrich a voice for their own frustrations with Washington.
And they also believe - and I have talked to so many people out on the campaign trail - that next fall that Newt Gingrich would be the man they'd want to see on a debate stage up against Barack Obama. So I suspect that you may see Dick Armey, for instance, saying critical remarks about Newt Gingrich in interviews on TV, things like that, but I would be very surprised if he, at this point at least, was willing to commit major Tea Party resources to defeating Newt Gingrich.
GROSS: What confuses me about the Tea Party support, in part, is that, you know, the Tea Party has been very anti-Washington insider, anti-lobby. But, you know, Newt Gingrich is Washington. You know, he was in the House a long time. He was the speaker of the House. He knows how the game is played. He's played the game.
He wasn't a technical lobbyist, but he advised groups in a similar capacity. So how do you get to see him as an outsider?
TUMULTY: I think that it is going to be very hard to make the Washington insider label stick to Newt Gingrich, and here's the reason: Most of the time that he was inside Congress, you know, it appeared he was trying to firebomb the place. So people really don't see him as much of an establishment figure.
And a lot of people who are, now, kind of the mature leaders of grassroots movements really came of age as Newt Gingrich was running an organization, for instance, called GOPAC, where they would listen to Gingrich's motivational and - he had a set of tapes that he would put out. He was running leadership institutes.
They remember Newt Gingrich as very much a force for change in the party. So, you know, yes he did, in fact, do - he became a very, very wealthy man after he left Congress, and he did it by essentially playing the Washington system in a very entrepreneurial way.
But I think that it is harder to make, you know, that stick as a criticism of him than it would be to just about anybody else I can think of in politics.
GROSS: My guest is Karen Tumulty, and she's written about Newt Gingrich for years. She's national political correspondent for the Washington Post and formerly covered politics, the White House and Congress for Time magazine. She co-wrote the Man of the Year Newt Gingrich cover story for Time back in 1995. Let's take a short break here, and then we'll talk some more. This is FRESH AIR.
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GROSS: If you're just joining us, my guest is Karen Tumulty. We're talking about Newt Gingrich, his past and his present. She's covered him for many years, currently in her capacity as national political correspondent for the Washington Post and before that when she was covering Congress, politics and the White House for Time magazine.
One more thing here, you said that may people in the Tea Party would like to see Newt Gingrich being the person who debates President Obama. Now, President Obama has been criticized by so many people on the right for being professorial. And that's intended to be a bad thing, professorial. But Newt Gingrich prides himself on having been, you know, a college history teacher and being professorial in his approach.
So, like, I find it hard to connect the dots on that one.
TUMULTY: Well, the manner, though, that he has brought to the debate stage has been not the kind of, sort of, pedantic, professorial manner, but it has been a fairly passionate critique of Barack Obama. He - the Tea Party people love the fact that he keeps attacking the media and even the debate moderators themselves.
And they also feel that he is very articulate in, sort of – in, sort of, putting out their view of the issues. And so he has surprised, I think, a lot of people on that debate stage with his discipline, the fact that he has generally stayed upbeat and refused to criticize the other Republicans, but also in his ability to frame the issues.
GROSS: Now, you're talking about how people like his debating style. One of the things he did when he was in Congress was make a public name for himself, in part, by being on C-SPAN a lot. And he came to Congress the same year as C-SPAN cameras did.
TUMULTY: That was probably the happiest coincidence of Newt Gingrich's life, is that he and the cameras arrived in the chamber at the same time.
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GROSS: And one of the things he would do is, like, late at night, when basically everybody in the House had gone home, he would be there talking to the camera, and what did Tip O'Neill do in response to that? This is a great story.
TUMULTY: Well, there was essentially nothing he was not willing to accuse the Democrats of. And at one point, Tip O'Neill had just had it. And so...
GROSS: Was this when O'Neill was still speaker of the House?
TUMULTY: That's right, Tip O'Neill was speaker of the House, and what Newt Gingrich would do is he would get onto the floor in a time that's called Special Orders. And this is out of the House is out of session. But because the House leadership controls the cameras, you don't know that the Congressman talking is talking to an empty chamber.
So Newt Gingrich would stand up there and just accuse the Democrats of every conceivable form of corruption, and for all the viewers could tell, all of the, you know, his colleagues were sitting there listening to it. So Tip O'Neill at one point, I believe the phrase he used was this is the lowest thing I've seen in my years in the House.
So he required the cameras to pull back so that you would actually see the fact that Newt Gingrich and his fellow members of what they called the Conservative Opportunity Society were, in fact, speaking to an empty chamber.
GROSS: And was that embarrassing for Gingrich?
TUMULTY: It was, but it didn't stop him.
GROSS: So when Newt Gingrich was in Congress, when the Republicans were in the minority, he was known as a bomb-thrower. What gave him that reputation?
TUMULTY: He, from almost the minute he got to Congress, he started filing ethics charges against prominent Democrats, including a Congressman from Detroit, the Detroit area, I believe, named Charles Diggs. And he would go on these crusades to, quite literally, take these people down.
But his most ambitious campaign, and it was ultimately successful, was against Jim Wright, the then-speaker of the House, who was in fact a very strong, very effective speaker. But Gingrich attacked him from every side, largely on ethical questions, including a questionable book deal. And ultimately, I think, was probably the main force behind Jim Wright being forced to resign. And that made him a hero to Republicans.
GROSS: What was questionable about Jim Wright's book deal?
TUMULTY: Jim Wright had written a book that was then being sold at events where he was speaking. And so there was a question of whether interest groups were buying this book just to essentially line Jim Wright's pockets. And it was interesting, too, because then Newt Gingrich himself had a very controversial book deal almost at the outset of his speakership.
GROSS: This was a $4.5 million book deal with a publishing house that was owned by Rupert Murdoch, who also owns - now owns Fox News.
TUMULTY: That's right, and it was, you know, it was a book deal that was brought together after he won the speakership. So it looked, very much, like somebody was trying to, you know, essentially pay him off. And finally Gingrich's own House colleagues went to him, specifically Bob Walker, the Congressman from - then Congressman from Pennsylvania, probably Newt Gingrich's closest friend in the House, and said you can't do this. This is hurting all of us. It looks terrible.
GROSS: So he turned the $4.5 million book contract into a $1 million book contract.
GROSS: So it's still pretty large by book contract standards or any standards. I mean, it's a lot of money still.
TUMULTY: That's right, and he - you know, by the way, book publishing and movie-making remain a major source of income to him.
GROSS: So before he left the House, there were many ethics charges filed against him. How many?
TUMULTY: There was one big one. There was a big ethics case that involved a college course that he had put together, that was being funded, in large part, by GOPAC, a political action committee that he had put together. And it had claimed a tax-exempt status because he made the argument that this college course was not a political tool, so therefore it should be tax-exempt.
And in the course of a very big ethics investigation, Newt Gingrich signed some documents that were false, and ultimately he was fined $300,000 by the House, primarily for making false statements to the House Ethics Committee.
Now, the irony of this - and Newt Gingrich will tell you this every time this comes up - is that a few years later the IRS came back and ruled that, in fact, Newt Gingrich had been correct, that this college course was not political, at least, under the IRS definition of the term.
GROSS: Karen Tumulty will be back in the second half of the show. She's a national political correspondent for the Washington Post. I'm Terry Gross, and this is FRESH AIR.
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GROSS: This is FRESH AIR. I'm Terry Gross, back with Karen Tumulty who's national political correspondent for the Washington Post. We're talking about, Newt Gingrich, who is leading in three of the four states with January primaries or caucuses, according to polls released yesterday by Time magazine and CNN. Tumulty has covered Gingrich since the 1980s and has recently written about how he amassed a fortune after leaving Congress using his influence to create a collection of enterprises. We'll get to that a little later.
Newt Gingrich is one of the leaders of the Clinton impeachment. Yet, at the time he was leading the impeachment he was having an affair. He was married and having an affair with another woman and he later married that woman that he was having the affair with. So was it public knowledge that Gingrich was having an affair at the time that he was trying to impeach the president? And I should say at this point that Gingrich would often say that he wasn't trying to impeach the president because he had a relationship with Monica Lewinsky, but rather because he lied to the grand jury and, you know, lying is illegal.
TUMULTY: At the time the impeachment proceedings were going on I think there were a number of people on Capitol Hill who were aware that Gingrich had this relationship going with a young aide to the House Agricultural Committee, but it was not public knowledge. In fact, the only reference I could recall seeing to it was a very fleeting one in a Vanity Fair profile of Newt Gingrich by Gail Sheehy, where she mentioned I think it didn't even take up an entire sentence, that he had a number of female admirers, including this young aide Callista Bisek. I believe she was described as a frequent breakfast companion. So that was sort of a little bit of an oblique reference. And it was not something that I think had made it into the mainstream media or that, you know, a lot of us were even particularly aware of.
GROSS: And Callista is, of course, now his wife and his aide in his political campaign. But, you know, he has a history of infidelity. He, during his first marriage, he had an affair with a woman who later became his wife and during that second marriage he had an affair with Callista, who is currently his wife. So that, the question comes up not only like was it hypocritical for him to work to impeach the president, but also how is this going to play now as a presidential candidate to people who consider themselves values voters?
TUMULTY: I really don't know because, you know, I've talked to people in places like South Carolina and Iowa, particularly among evangelical voters who just say this is a deal breaker. But since then, he points to back his marriage now apparently by all appearances is a very happy one. He has undergone a conversion to the Catholic Church. He talks about his daughters and his grandchildren with great frequency. You know, evangelical voters love a redemption story. The question that I think where the answer remains to be seen is whether they are going to accept this as a legitimate change of heart on Newt Gingrich's part, that in fact he is a different man than he used to be. And, like I said, until people start voting I don't know that we are going to know the answer to that.
GROSS: So we talked about how after President Clinton was reelected there was an attempted coup in the Republican House against Newt Gingrich, to overthrow him as speaker. That coup failed. But in 1998, right after he was reelected he resigned from Congress completely. Why did he do that?
TUMULTY: He resigned because he had that the House, quite literally, on the impeachment. He promised his colleagues that if they just ran full speed steam toward impeachment which, by the way, was going to happen a month later, that the country would stand up and applaud. Well, instead, the Republicans lost seats and it was the second election in a row - this was a midterm - it was the second election in a row when they had lost seats. By then Newt Gingrich himself had become such a political liability that Bill Livingston, then the chairman of the Appropriations Committee, made it clear he was ready to run against him and basically Newt Gingrich saw the handwriting and decided to step down.
GROSS: So what kind of financial condition was he in when he stepped down?
TUMULTY: OK, so he basically, Newt Gingrich at that point finds himself pretty much of a pariah of establishment Washington. And for the first time in his life since graduate school he is unemployed. So he's already had one expensive divorce, he's about to have another one. So he sat down with a number of his advisers and they started talking about how in the world was he going to make a living. And he told them they're are two things he wouldn't do. One, is that he was not going to endorse a product. At that point Bob Dole was on the air with Viagra commercials and he said I'm not doing anything like that. And the second thing he said was not going to register as a lobbyist.
Now there is a fairly narrow legal definition of what a lobbyist is. And he thought that having to go up to Capitol Hill and asked his old colleagues for favors was just too demeaning to both himself and to the office that he once held. So he started trying to figure out what else he could do in the first thing that occurred to him was to hit the lecture circuit in a big way. And he found out that, you know, he still had a pretty big following among Republicans out in the country. So he was making $60,000 a speech and making 50 to 80 speeches a year. And on top of that, he started offering his consulting services to corporations and other clients.
Now there is a distinction - some people would say a very narrow distinction - between the kind of job that you can call consulting versus the kind of job that's lobbying. Essentially, he was giving them advice on how to get their issues in front of the Congress and through the Congress. So he finally comes up with the idea for the thing that would turn into a financial bonanza, his biggest moneymaker of all, which is to set up a for-profit think tank where corporations would pay membership fees ranged from $20,000 to $200,000 to join a - those are annual dues. And ultimately, between that and the consulting business, he earned well over $55 million. And all of his businesses together over as course of a decade earned, his lawyer tells me - they're private, so there's no way to check - something like not earnings but in revenues, generated $100 million.
GROSS: Now that health care think tank, the Center for Health Transformation, promised prospective members that if they joined they would get, quote, "access to Newt Gingrich," and, quote, "direct Newt interaction," as well as, quote, "access to top transformational leadership across industry and government." So what's the difference between that and lobbying?
TUMULTY: Lobbying means that you go up onto Capitol Hill or to the federal agencies and you arrange meetings and you ask them for specific favors. What Newt Gingrich would do would give them advice on how to get these things done, but he would not actually pick up the phone and say Congressman X, would you be willing to meet with Corporation Y.
But he would arrange things like these conferences where, you know, these businesses would have a chance to rub elbows with policymakers. And another thing he would do is back he would become a very public advocate for some of the causes that were good for these company's bottom lines. For instance, Novo Nordisk is a company that makes diabetes treatments. Well, Gingrich would serve as the keynote speaker for their big conferences. His name was actually appear in their press releases, where he would commend them for their leadership in diabetes treatment. Of course, you know, diabetes treatment and preventive and maintenance of diabetes are all very worthy causes, but again, their causes that are also good for this particular company's bottom line.
GROSS: No he also got $1.8 million in consulting fees from Freddie Mac, which is interesting because conservatives blame Freddie Mac's lending practices for the housing crisis. So what's the difference between what he did as a consultant to Freddie Mac - he initially said he was a historian for Freddie Mac. What's the difference between what he did and lobbying?
TUMULTY: Well, he argues that what he did was give them advice. He also says that he warned them that their business model was flawed. There is no secondary source that has been willing to confirm that. But the fact is he was hired to help them promote their agenda, so I think this has become a big problem for him on the campaign trail. And I think his opponents are going to say how are we going to be able to press the argument about Fannie and Freddie in next fall's elections is our standard bearer was actually on their payroll.
GROSS: If you're just joining us, my guest is Karen Tumulty. We're talking about Newt Gingrich, who she has covered for years. She is a national political correspondent for the Washington Post. Before that she covered Congress, politics and the White House for Time magazine. Let's take a short break here and then we'll talk some more. This is FRESH AIR.
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GROSS: We're talking about Newt Gingrich. My guest is Karen Tumulty. She's covered him for years. She is a national political correspondent for the Washington Post and before that she covered Congress, politics and the White House for Time magazine.
Now, Newt Gingrich also had another group which shut down in over the summer after he started his presidential campaign, and this group is called American Solutions for Winning the Future. What did that group do?
TUMULTY: This, unlike his business ventures, including his for-profit think tank, American Solutions was apolitical, a nonprofit and a political enterprise. He would for instance go around the country, one of their big campaigns was drill here, drill now, where he was and he would go around at events in the country and promote these things. There was however a synergy to all of this in that he could schedule an American Solution event at the same place he was going to do a book signing and a $60,000 speech. So he was able to make sort of all of these things operate. And some of his former officials of American Solution, he denies it, they say that sometimes the bookkeeping was set up so that American Solution would for instance pay his travel expenses.
GROSS: Why was that helpful? So he didn't have to pay it out of his own pocket, he got his nonprofits to pay it?
TUMULTY: That again, is what some...
GROSS: I mean that's what's alleged.
TUMULTY: Yeah, right.
TUMULTY: That's what some people - his own lawyers say that they were very, very careful about for instance, the use of private aircraft, the use of chauffeur-driven limousines and that, you know, everything was properly billed. But again, former officials of the two enterprises, both American Solution and his for-profit enterprises say that that was not their impression.
GROSS: So Newt Gingrich, is he personally in debt or is it his campaign that's in that?
TUMULTY: His campaign is in debt. You might recall he really stumbled out of the starting gate and with as few weeks of declaring his candidacy basically his entire top team of consultants had left him. And at the time he had been traveling around on chartered aircraft, very expensive living styles, you know, insisting that they fly him home at night so that he could sleep in his own bed. I asked him about this. I said, you know, how was it possible you were able to run so deeply into debt. And he says that he was only paying attention to the amount of cash on hand in the account, and that what he didn't realize was that his consultants weren't paying his bills. So when they all left he suddenly discovered that he had this gigantic debt on his hands, over a million dollars.
GROSS: So that's campaign debt or personal debt?
TUMULTY: That is campaign debt. Interestingly enough, some of the debts that the campaign were to Newt Gingrich himself. For instance, the campaign had to buy the domain name Newt.org from one of Newt's businesses. They also had to pay him for using his own personal mailing list and those bills, by the way, apparently did get paid.
GROSS: So he managed to get himself paid while other creditors were not.
TUMULTY: That is right.
GROSS: He sold the mailing list for $42,000. Now is that something that candidates typically do, sell their own mailing lists to their own campaign and make money off of it?
TUMULTY: Well, first of all, I think the federal law would prohibit them from just giving it to it. It would be that I believe, depending on how it's structured, that that would be required under law, as would the case of the domain name Newt.org.
GROSS: And another thing he could have done is like donated in kind.
TUMULTY: That's right.
GROSS: So since Newt Gingrich's campaign is in debt now is that going to be a big problem for him during the remainder of the campaign? Mitt Romney, for instance has still a lot of money.
TUMULTY: The real, the two big questions about Newt Gingrich I think right now are one, whether he can maintain the kind of discipline that people expect of a presidential candidate. The second one is will he be able to marshal the resources and the organization to carry him forward in this campaign beyond Iowa and New Hampshire and South Carolina. Because if this becomes a long drawn out primary, the kind we usually see in the Democrats – remember, they went on until June last time around – organization and money are going to matter a lot.
TUMULTY: We know that Mitt Romney has both of these things and it has yet to be seen whether Newt Gingrich can pull all of that together, especially given the fact that his surge has come so late.
GROSS: So what do you find most interesting about the campaign so far?
TUMULTY: I think everything that we thought we could assume at the beginning has turned out to be so wrong. And Newt Gingrich's resurrection is probably the very best case of that. Given where he was in June, I would never have thought he would even still be in the race at this point, much less leading it. And the stumbles. It's just that Republican races have traditionally been more like coronations. They figure out their frontrunner usually in February of the year before the election...
...and that person, you know, there will be bumps in the road but that person usually has a pretty straight shot to the nomination. What we've seen this year has just been so remarkable.
GROSS: What does that say about the power of the party leadership now?
TUMULTY: I think that it says there is no party leadership anymore, that the Tea Party has emerged as a very powerful insurgent movement in the party, that people's allegiances to the establishment and the old leadership structure are not what they used to be. And I think that that we can trace pretty much back to Newt Gingrich and his, you know, historic class of 1994 coming to Congress.
And also there are so many outside forces that, you know, the outside groups, and they are largely ideologically driven much more than they are driven by partisan labels, have become incredibly powerful players.
GROSS: So the Tea Party movement that the Republican Party helped empower has now kind of in some ways disempowered the leadership of the party.
TUMULTY: I think the Republican establishment always had very mixed feelings about the Tea Party movement because some of their original targets were actually Republican incumbents and one of the major purposes that parties exist is to protect their incumbents. And that was from the beginning something that the Tea Party absolutely rejected.
GROSS: Since you know Newt Gingrich and has covered him for years, I'm going to ask you your impressions. Like, what is he about? Is he about a kind of idealistic vision of what America should be? Is he about Newt Gingrich, you know, about his own ego, about his own advancement? There are people who see him as one or the other, you know, one extreme or the other.
TUMULTY: Newt Gingrich views himself as a historic and even transformational figure. He sees himself as a deep intellectual and I think that that is basically what animates him. And he is someone who loves to, you know, come up with and engage ideas one after another and to the great frustration sometimes of the people around him. There was a long standing joke when he was in Congress that over at the Republican National Committee they had a big filing cabinet labeled Newt's Ideas and a manila folder labeled Newt's Good Ideas.
But he is somebody, I think, who is constantly on this sort of intellectual quest and again has a very large vision of himself. He basically thinks, you know, destiny saved him a seat on the bus.
GROSS: Karen Tumulty, thank you so much for talking with us.
TUMULTY: Thank you.
GROSS: Karen Tumulty is a national political correspondent for The Washington Post. You'll find links to FRESH AIR interviews related to the Republican primary on our website, freshair.npr.org. Coming up, Ken Tucker reviews the Black Keys' new album. This is FRESH AIR. Transcript provided by NPR, Copyright NPR.