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Democrats Urge House Ethics Panel to Probe Gingrich's Use of Nonprofit Foundations

Congress: Lawmakers see 'deception' by speaker. Outcry follows disclosures in Times.

June 26, 1996|GLENN F. BUNTING | TIMES STAFF WRITER

WASHINGTON — Five prominent House Democrats called on the Ethics Committee on Tuesday to expand its ongoing inquiry into allegations that Speaker Newt Gingrich (R-Ga.) improperly used a string of tax-exempt foundations over the last decade to advance his political agenda.

The Democrats said that they intend to file a resolution on the House floor this week directing the Ethics Committee to grant special counsel James M. Cole authority to expand his current investigation of two tax-exempt foundations that Gingrich utilized to finance his nationally televised college course.

The announcement at a Capitol Hill press conference followed a Times story in Tuesday's editions that disclosed how Gingrich and his key advisors used six nonprofit foundations over the last decade to extend the reach of GOPAC, the political action committee that spearheaded the Republicans' victory in the 1994 elections.

House Minority Whip David E. Bonior (D-Mich.) claimed that Gingrich "engaged in a massive tax fraud scheme" by using nonprofit groups that were organized for exclusively charitable purposes.

"This is a pattern of deception and abuse that uses poor, inner-city kids as cover to launder political donations, defraud American taxpayers and promote Newt Gingrich's own political agenda," Bonior said. "It's shameful. It's wrong. And it's time we get to the bottom of it."

Lauren Sims, Gingrich's deputy press secretary, issued a statement Wednesday calling The Times story "a rehash of previously published news articles." Gingrich has previously denied misusing any foundations.

Officials at the Ethics Committee offered no reaction Tuesday.

The Times reported that all six nonprofit organizations were directly linked to GOPAC between 1985 and 1995, when Gingrich served as its chairman. Together, the foundations generated at least $6 million in tax-deductible donations.

Two of the organizations, the Kennesaw State College Foundation and the Progress & Freedom Foundation, are being examined by Cole, the former federal prosecutor who was hired in December by the bipartisan Ethics Committee.

Records examined by The Times show that the Abraham Lincoln Opportunity Foundation, the West Georgia College Foundation and the American Opportunity Foundation used tax-deductible funds intended for charitable activities to support Republican causes. A sixth nonprofit group, the American Campaign Academy, was denied tax-exempt status after a federal judge ruled that it was a blatantly partisan operation.

In cases involving the Lincoln and West Georgia foundations, money that was intended to support troubled inner-city teenagers and "at-risk" third-graders was used instead to benefit GOPAC and to compensate a Gingrich confidante.

Federal tax law prohibits tax-exempt foundations from engaging in any form of partisan activity, including the promotion of a political candidate or party.

In January, Bonior and other Democrats filed a sweeping complaint urging the Ethics Committee to allow the special counsel to extend his investigation to include the Lincoln foundation. That request has not been acted upon.

"The Ethics Committee has become the Newt Gingrich Protection Society," said Rep. Patricia Schroeder (D-Colo.).

If Democrats are unsuccessful in getting the House to direct the ethics panel to broaden the current investigation, they said that will try to get outside enforcement agencies to look into the matter.

Rep. George Miller (D-Martinez) indicated Tuesday that he plans to ask the Internal Revenue Service and the Department of Justice to investigate the speaker.

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