Advertisement
YOU ARE HERE: LAT HomeCollections

Gingrich Helped Firms With Close Funding Ties : Contributions: Tax breaks, FDA action aided drug companies. Spokesmen deny any quid pro quo.

February 03, 1995|GLENN F. BUNTING and ALAN C. MILLER | TIMES STAFF WRITERS

WASHINGTON — Rep. Newt Gingrich (R-Ga.) introduced legislation in 1993 proposing tax breaks for several large pharmaceutical companies that gave money to a network of fund-raising organizations tied to the congressman.

Gingrich, who was elected House Speaker last month, also pressed the Food and Drug Administration in July to expedite approval of a drug manufactured by one of the firms, Solvay Pharmaceuticals Inc. of Marietta, Ga.

Solvay is one of a number of health-related businesses that support the Progress and Freedom Foundation, a Washington think tank that finances Gingrich's weekly college course and television show. The foundation refuses to disclose the amount of contributions it receives from individual donors, but a Solvay official said Thursday that the firm gave $30,000 last year to support a Progress and Freedom project aimed at overhauling the FDA's drug-approval policy.

A top executive at another drug firm that stood to reap benefits from the Gingrich legislation, Marion Merrell Dow Inc. of Kansas City, donated $41,690 to the GOP Action Committee, or GOPAC, a political group headed by Gingrich that helped elect a Republican majority to Congress last fall.

Spokesmen for the drug firms and the foundation said there was no connection between the donations and any assistance provided by Gingrich.

"There is absolutely no linkage here of any sort," said Bill Myers, foundation vice president. "There is no formal relationship between the Speaker and the foundation that would provide him any reasons to introduce legislation for one of our supporters."

Gingrich spokesman Tony Blankley declined to answer specific questions relating to the legislation or to the intervention on Solvay's behalf with the FDA.

The Speaker's efforts, however, raise new questions about preferential treatment or favors for those who give large sums--often anonymously--to GOPAC or other Gingrich endeavors.

"The Speaker has various (fund-raising organizations) in which large contributions can be made to benefit things that are important to him from people who have enormous stakes in government," said Common Cause President Fred Wertheimer, who added that such relationships merit close examination.

And on Thursday, Common Cause called on the House Ethics Committee to hire an independent adviser to examine Gingrich's controversial book contract with HarperCollins Publishers Inc. Gingrich first negotiated and then--amid intense criticism--turned down a $4.5-million book advance from HarperCollins.

The publishing company is controlled by media magnate Rupert Murdoch, whose Fox Television Network has interests pending before the federal government. Gingrich has said he intends to submit a proposed book contract calling for a $1 advance and royalties on book sales to the ethics panel for approval.

*

Gingrich's role as GOPAC chairman for the past decade has been the subject of recent controversy stemming from the group's refusal to disclose the identities of most of its large donors. The committee raised more than $7 million between 1988 and 1993, much of it from corporate executives with significant interests in federal legislation, according to internal documents obtained by The Times and other news organizations.

The Progress and Freedom Foundation has solicited $1.7 million in donations from about 100 supporters, many of them large corporations such as AT&T, Federal Express, IBM and the Coca-Cola Co. Bowing to pressure from critics, the nonprofit foundation released a list of donors in December but did not disclose how much money was given by each.

The large corporate contributions raise the potential of numerous conflicts of interest, particularly given the influence Gingrich now wields as Speaker, critics say.

During the previous two-year session of Congress, Gingrich introduced nine bills as minority whip. Although he had not established himself as a specialist in drug industry issues, three of the measures sought to exempt companies importing certain foreign-made chemicals from paying import duties on them.

Gingrich's tariff-reduction bills were among several hundred such measures introduced by lawmakers in the 103rd Congress. The goals were generally to lower costs of goods to consumers and increase the competitiveness of U.S. firms.

In recent years, however, it has become difficult to win legislative approval for lower tariffs because lawmakers have been required to find offsetting sources of revenue under a congressionally approved plan intended to keep the federal budget deficit from growing.

"Most of the members who introduce these bills either have some producer interest in their district or have other incentives to do something for one of these industries," said one former Clinton Administration official.

Advertisement
Los Angeles Times Articles
|
|
|