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Gingrich's Politics Got Boost From Nonprofits

Foundations: The GOP leader's use of 6 tax-exempt agencies raises questions by legal experts, special counsel.


* Steely's Earning by Learning files contain an undated memo that appears to assess Gingrich's chances of getting reelected in neighboring counties outside his congressional district. In the early years of the reading program, Gingrich was uncertain how the once-in-a-decade reapportionment process would affect his reelection chances. "Bartow [County]--Newt--OK . . . " the handwritten memo said. "Newt should be OK in Floyd [County]."

* Reading program funds were used to reimburse Steely for travel, lodging and meal expenses during three trips to attend Gingrich's Saturday morning college course. The speaker's inner circle of advisors and GOPAC consultants often accompanied Gingrich to Georgia to "help Newt think" on a wide range of political issues, according to court records submitted by the Federal Election Commission. Steely said he attended lectures that mentioned Earning By Learning at Gingrich's request.

"This really seems like a scrambling of political and educational eggs," said Simon, the Yale University law professor. "You don't have to be a zealot Democrat to have a justifiable basis for concern."

But officials at the West Georgia College Foundation said that they did not scrutinize whether IRS rules guiding tax-exempt organizations were followed.

"All we do is receive contributions and write checks out," said foundation director Susan A. Mabry. "This office is not involved in administering the program in any way."

Last year, Gingrich touted the reading program during his nationally televised college course. "Now, what we do with Earning by Learning is very simple. . . . The overhead is totally volunteer, the entire structure is totally volunteer. The only money goes to the kids. So, if you have $1,000--at $2 a book you can pay for 500 books. Whereas, in the welfare state model, if you have $1,000 you pay $850 of it for the bureaucracy."

But financial documents for the reading program tell a different story.

Nearly two-thirds of Earning by Learning's $62,254 budget since 1992 was paid in fees to Steely, who also earned salaries as a full-time West Georgia history professor and a part-time congressional aide in Gingrich's district office. Steely currently is writing the speaker's authorized biography.

Last year, 86% of the $24,126 spent on the local reading program went to Steely and two other West Georgia faculty members, who were paid $75 per hour to evaluate whether participants were motivated to continue reading. Their conclusion: The program "was just short of phenomenal," Steely said.

During the first two years of the program, $20,677 was paid to children for reading books. But between 1992 and last year, records show that a total of $17,374, or 28%, of program funds, went to students.

By providing the bulk of Earning by Learning funds to Steely, Gingrich's reading program ran the risk of violating IRS regulations, tax experts said.

Steely acknowledged in an interview that, contrary to Gingrich's assertions, the majority of reading funds went into his pocket. "If we were to be totally accurate, I should not have received any remuneration at all," he said.

Steely said Gingrich started Earning by Learning with the purest of motives and that politics played no part in the program.

"One of the greatest disservices the press has done is to picture Newt as an uncaring, cold person," Steely said. "It's just the opposite. He really does care about these kids. He really wants to motivate them to read."

Kennesaw State College Foundation

In 1993, Gingrich offered to teach a nationally televised history course at Kennesaw State College in his new congressional district. The goal, Gingrich wrote supporters, "is to have 200,000 committed activists nationwide before we're done."

The class, called Renewing American Civilization, was organized out of GOPAC headquarters in Washington and promoted by Republican organizations, according to hundreds of pages of internal memos and documents obtained through the Georgia Open Records Act. Among the groups involved were the National Republican Committee, the National Republican Congressional Committee, the Young Republicans organization and the Christian Coalition.

In addition, a draft letter from Gingrich urging Republican students on campuses across the country to enroll in the course via satellite sounded an unmistakably partisan call. It began by saying that "conservatives today face a challenge larger than stopping President Clinton."

Gingrich raised $300,000 to broadcast his lectures nationwide by soliciting contributions from GOPAC charter members, major corporate donors and longtime political supporters. To make the donations tax-deductible, course organizers arranged for the Kennesaw State College Foundation to handle the finances.

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