Now That Newt's In Front, It's Time To Look At The IRS Ruling That 'Cleared' Him

Newt Gingrich is running for president, and that means it's time to take a closer look at his history. Pay attention, because it's complicated. First, a Washington Post piece from Feb. 4, 1999: The Internal Revenue Service has cleared an

Newt Gingrich is running for president, and that means it's time to take a closer look at his history. Pay attention, because it's complicated. First, a Washington Post piece from Feb. 4, 1999:

The Internal Revenue Service has cleared an organization of charges that it violated its tax-exempt status when it helped fund a college course taught by former House speaker Newt Gingrich (R-Ga.), the organization said yesterday.

The IRS, concluding a three-year investigation, ruled that the Progress and Freedom Foundation's donations to Gingrich were "consistent with its stated exempt purposes," and Gingrich's course and course book "were educational in content."

The foundation, which posted the IRS decision on its Web page, welcomed what it said was a "clean bill of health." An IRS spokesman said the agency is barred by law from commenting on rulings.

Then, in 2003, the IRS reversed a previous decision saying Gingrich's work with Abraham Lincoln Opportunity Foundation was actually being used as a slush fund for GOPAC. From the National Council for Responsible Philanthropy newsletter of Winter 2006, this quote from the Campaign Legal Center:

Although the IRS didn’t specifically find Gingrich himself guilty of tax-exempt misbehavior, the IRS did revoke the tax exemption of the Lincoln Foundation in 1998 because of the obvious role the foundation played in “how GOPAC…captured and dominated ALOF, using it to raise funds and pay costs for an ambitious cable television show featuring Gingrich. The two groups, in essence, merged, sharing the same staff, resources, and office. GOPAC went as far as offering its members the chance to pay their $10,000 dues by contributing to ALOF, which provided the donors with the benefit of a tax-deductible expense.”

The NCRP also notes:

Gingrich’s use of his foundations in GOPAC-originated functions or employing GOPAC consultants like Eisenach (paid $200,000 a year at the foundation alone) sounds a bit like the DeLay and other political foundations serving as holding pens and income streams for between-cycle campaign staff. It begs credibility to imagine that all of this happened to Gingrich without his knowledge, much less direction. As his friend Callaway said about Gingrich, “Everywhere he goes he takes chances and is audacious, but he knows where he’s going.”

The shifting of expenses for GOPAC’s TV shows between Gingrich’s campaign apparatus and the tax-exempt foundation that his GOPAC colleagues controlled makes the entire operation look like Abramoff’s political money laundering behind the façade of philanthropy.

It may be merely a coincidence, but after the 2000 elections that brought George W. Bush to the White House, the IRS found a way of reversing its decision about the Lincoln Foundation as the result of a campaign led by none other than GOPAC’s Bo Callaway, who was also unhappy that his own personal foundation had lost its tax exemption because it had improperly contributed to ALOF.

In the wake of the Bush election, Callaway got the then barely known “independent review office” of the IRS, established to respond to citizen complaints, to review the ALOF and Callaway foundation issues. Callaway’s people presented their evidence to the IRS, but the review office made no attempt to contact the House ethics committee that investigated Gingrich and ALOF and uncovered the partisan nature of the foundation’s operations.

The special counsel for the committee, James Cole, was surprised by the IRS reversal, saying, “Based on what we found about ALOF, if that’s not political and partisan, then I don’t know what is.” Other observers suggested that this IRS reversal had the earmarks of a political decision. Fran Hill, a University of Miami tax law professor, called it “an extraordinary decision,” noting that it “wouldn’t be the first time there was political influence going on at the IRS.”

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