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Gingrich Makes Ethics Penalty Down Payment

Finances: House speaker says he'll now borrow no more than $150,000 from Dole. He also discloses a second book deal to provide funds.

May 16, 1997| From Associated Press

WASHINGTON — House Speaker Newt Gingrich (R-Ga.) made a $50,000 down payment Thursday on his $300,000 ethics penalty and promised the ethics committee that he would borrow no more than half of the money from former Senate Majority Leader Bob Dole (R-Kan.).

In winning Ethics Committee approval of a repayment plan, Gingrich disclosed for the first time that he has an agreement with Harper Collins to write a second book. He said the expected proceeds would serve as collateral for any loan from Dole.

Gingrich had planned to pay the entire reimbursement with a $300,000 loan from Dole, the 1996 Republican presidential nominee. But in documents approved by the Ethics Committee on Thursday, Gingrich said he would borrow no more than $150,000 from Dole, and he left open the possibility that he would not borrow anything.

The arrangement with Dole had raised concerns among Ethics Committee staffers as well as Gingrich critics who suggested he was getting a sweetheart deal.

Under the terms of the new repayment plan:

* Gingrich made a $50,000 payment Thursday from personal funds.

* Agreed to make two additional payments of $50,000--on June 1, 1998, and Nov. 30, 1998.

* Promised to pay the $150,000 balance by Jan. 2, 1999.

Advisors said Gingrich likely would have to tap the loan agreement with Dole to make that final payment.

To answer concerns he was getting a huge loan without putting up collateral, Gingrich said he would secure the loan with "book No. 2 proceeds as described in an agreement with HarperCollins Publishers Inc." Also, Gingrich said he would take a second deed on his Marietta, Ga., residence if necessary. Advisors could not immediately provide details of the book deal.

As part of the agreement, Dole submitted a letter to the committee promising he would not for the duration of the loan agreement "directly or indirectly contact Speaker Gingrich on behalf of any clients" of his new Washington law firm, Verner, Liipfert, Bernhard, McPherson & Hand.

Dole also promised he would not register as a lobbyist and that, in the event he did, the loan would be converted to a commercial bank loan.

Giving Gingrich the blessing he has sought in an effort to put the ethics case behind him, the committee's chairman and ranking Democratic member signed a letter to the speaker that read:

"The committee finds the proposed payment schedule, which calls for total payment within this term of Congress, reasonable and appropriate and in conformance with House rules and standards."

The agreement requires Gingrich to pay interest if any of the scheduled payments are late. It also requires him to obtain a life insurance policy to cover the loan, designating Dole as the beneficiary.

If Gingrich borrowed the $150,000 from Dole, he would be obligated to make semiannual payments of $7,500 beginning in January 2000 and to repay the entire loan within five years.

The committee said House rules governing gifts do not preclude members from getting loans from sources other than banks, provided the terms of the loan were reasonable.

"To rule otherwise would undermine the plain language of the rule," wrote Republican Rep. James V. Hansen of Utah, the ethics chairman, and Rep. Howard L. Berman of California, the committee's ranking Democrat.

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