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Gingrich Health Center and Consulting Group Paid $55 Million

By Clea Benson and Lisa Lerer
November 22, 2011 12:16 PM EST
Newt Gingrich, former U.S. Speaker of the House, right, speaks with Rick Santorum, former U.S. Senator, during a presidential debate in Hanover, New Hampshire.
Photographer: Andrew Harrer/Bloomberg
Newt Gingrich, former U.S. Speaker of the House, right, speaks with Rick Santorum, former U.S. Senator, during a presidential debate in Hanover, New Hampshire.

Two companies founded by Newt Gingrich announced yesterday that they had grossed $55 million between 2001 and 2010, part of an effort to quiet questions about how the former U.S. House speaker earned millions since he resigned from Congress in 1999.

That revenue supports the Center for Health Transformation and The Gingrich Group LLC, which have a staff of as many as 30 people, stage health-care policy events, and provide advice to clients, Nancy Desmond, the chairman and chief executive officer of the firms, said in a written statement.

Gingrich, who has moved to the top of some polls of the Republican presidential race, is coming under increased scrutiny for his financial ties to companies whose positions he was publicly advocating, some of which now conflict with priorities of his party’s primary voters.

“The problem we have is is that Newt Gingrich, who’s a very smart guy -- he’s done very well in the debates -- is a symptom of a Washington problem,” Matthew Dowd, a Republican strategist and Bloomberg News contributor, said Nov. 20 on ABC’s “This Week” program. “He says ‘I don’t lobby,’ but he’s paid lots of money not to lobby, but influence people.”

In addition to the $55 million, Gingrich’s now-defunct political committee, American Solutions for Winning the Future, took in $50 million in contributions, according to the Washington-based Center for Public Integrity, which tracks political and lobbying expenditures. Combined, enterprises controlled by the former Georgia congressman took in $105 million since 2001, the nonpartisan center reported on its website last night.

Drug Benefit

Among the activities drawing attention is Gingrich’s call in 2003 for House Republicans to pass a new drug benefit for older Americans that was also a top priority for pharmaceutical makers he was soliciting to support his health research center. That drug benefit today is opposed by anti-spending conservatives because it increased the deficit.

Over the span of eight years, Gingrich also was paid about $1.6 million to help Freddie Mac (FMCC), a home mortgage company, fend off new regulations under consideration by Congress.

In addition to Desmond’s disclosure of income for the consulting firm and the health-policy center, Gingrich’s campaign has posted a new page, “Answering the Attacks,” on its website. It outlines Gingrich’s rebuttal to 18 different controversies as diverse as his positions on global warming and his three marriages.

Free Class

Campaigning in New Hampshire yesterday, Gingrich deflected questions about his business ties and attempted to change the focus to initiatives he would undertake if he wins the White House.

He told voters in Manchester that, as president, he would teach a course about the goals of his administration. The class would be free, he said, and offered online, “sort of like the University of Phoenix or Kaplan.”

A course taught by Gingrich at two Georgia colleges was at the heart of the 1996 House Ethics Committee investigation of him that led to a $300,000 fine and House reprimand in January 1997 -- in part for using tax-exempt funds to underwrite a course that ethics investigators found had a partisan mission.

Among Gingrich’s objectives in teaching the course, according to letters quoted in the ethics committee report, was attracting 200,000 citizen activists and creating “the structure to build an offense so that Republicans can break through dramatically.”

Strength in Debates

Gingrich, whose final classes were held at a private school, stopped teaching the course in 1994, citing the demands of becoming speaker of the House. The Georgia Board of Regents in 1993 banned elected officials from teaching on state-run campuses.

In an appearance at Rivier College in Nashua, N.H., Gingrich sought to draw attention his skill as a debater, which has helped fuel his rise in the Republican race.

He asked his listeners whom they would want to debate President Barack Obama “to draw clarity between the various lies they will be telling and the truth.”

He added: “I think most people end up thinking I’m probably a better debater than my friends are.”

A few hours later, Gingrich released what he billed as a new proposal for revising the Social Security system.

Social Security Alternative

His plan would give younger workers an alternative to the current system by giving them the option of investing some portion of their payroll taxes into private retirement accounts approved by the federal government. Workers could also choose to stay in the current system, he said.

“Nobody’s ever forced into the new system,” he said.

The proposal, which lacked details about who would qualify and how much retirement income could be set aside, appears similar to one he advanced when he served as speaker from January 1995 to January 1999.

Gingrich has devoted much of his time since leaving the House to exploring various proposals for overhauling entitlement programs, particularly in the area of health care.

As for his private-sector clients, Gingrich and his staff said he provided “strategic advice” and didn’t directly lobby Congress on their behalf.

“Gingrich Group and the Center for Health Transformation were designed to be a unique center of new solutions for transformational projects,” Desmond wrote yesterday.

Last week, Gingrich said he would release the full list of his clients and the amount he was paid, “to the extent we can.”

Confidentiality Clauses

Desmond said yesterday that “confidentiality clauses in our contracts” prevented the companies from releasing any more information than the gross revenue figure of $55 million.

The center was formed in 2003 to study industry trends, propose overhauls, and make Gingrich available to corporate boards and executives for brainstorming and other strategic advice.

Companies could pay membership fees of $20,000 to $200,000, gaining various levels of staff attention, access to research studies and time with the former House speaker. The center’s site lists three levels from “premium” to “charter” memberships. Those paying more than $100,000 a year could get Gingrich to speak to a private event, according to two people familiar with the arrangements.

Some of Gingrich’s clients have already acknowledged hiring him. U.K. drugmaker AstraZeneca Plc (AZN), pharmaceutical maker Johnson & Johnson (JNJ), health insurer Blue Cross and Blue Shield Association and WellPoint Inc. (WLP), the nation’s largest insurer by revenue, are among them.

Pfizer Inc. (PFE), the world’s largest drugmaker, had consulting contracts with Gingrich, according to two people familiar with the arrangements.

The Pharmaceutical Research and Manufacturers of America, the industry’s trade group, was also a client.

To contact the reporters on this story: Clea Benson in Washington at cbenson20@bloomberg.net; Lisa Lerer in Washington at llerer@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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