KWAME HOLMAN: For more than a year, working with an ethics subcommittee investigating Speaker Newt Gingrich, Special Counsel James Cole dutifully maintained his silence. But when the public hearing on the recommended sanctions against Gingrich began shortly after 3 o'clock this afternoon, Cole was free to talk.
JAMES COLE, Ethics Committee Special Counsel: In determining what the appropriate sanctions should be in this matter the subcommittee and I considered the seriousness of the conduct, the level of care exercised by Mr. Gingrich, the disruption caused to the House by the conduct, the cost to the House for having to pay for an extensive investigation, and the repetitive nature of the conduct. In addition, the violation did not represent only a single instance of reckless conduct but rather over a number of years and in a number of situations Mr. Gingrich showed a disregard and lack of respect for the standard of conduct that applied to these activities.
KWAME HOLMAN: Over the course of an hour Cole presented the case against Gingrich.
JAMES COLE: The subcommittee found that in regard to two separate projects Mr. Gingrich engaged in activity that was involving 501C-3 organizations; it was substantially motivated by partisan political goals. The subcommittee also found that Mr. Gingrich had provided the committee with material information about one of those projects that was inaccurate, incomplete, and unreliable. The first project was a television program called "The American Opportunities Workshop." It is many times referred to as AOW. It took place in May of 1990, and the idea for this project came from Mr. Gingrich. And he was principally responsible for developing the message that was to be broadcast through this program. AOW involved broadcasting a television program on subjects concerning governmental issues.
Mr. Gingrich had hoped by using this program he would be able to create a citizen's movement and in doing this workshops were set up throughout the country where people could gather and watch the program and where people could be recruited for this citizen's movement. While the program was educational, the citizen's movement was also considered to be a tool to recruit non-voters and people who are apolitical to the Republican Party. AOW started off as a project of GOPAC. GOPAC is a Political Action Committee which is dedicated to, among other things, achieving Republican control of the United States Congress. The methods GOPAC uses to achieve this goal include developing and articulating a political message and disseminating that message as widely as possible. One avenue of dissemination for GOPAC's message was AOW.
The program, however consumed a great deal of GOPAC's resources. Because of this, Mr. Gingrich and others at GOPAC decided to transfer the American Opportunities workshop to a 501C-3 organization in order to attract tax deductible funding. The second project utilizing 501C-3 organizations that Mr. Gingrich was involved in encompassed a college course that he taught which was called "Renewing American Civilization." Mr. Gingrich developed the course as a subset of and a tool of a larger political and cultural movement, which was also known as "Renewing American Civilization." The goal of this movement, as stated by Mr. Gingrich, was the replacement of the welfare state with an opportunity society. The primary means of achieving this goal was the development of a message for the movement and a dissemination of that message as widely as possible.
Mr. Gingrich intended that a Republican majority would be a heart of the movement and that the movement would professionalize the House Republicans. The methods that were described for achieving this included using the message of the movement to attract voters, resources, and candidates to the Republican Party. The same message that was used for the movement was also the same message used as Mr. Gingrich's campaign theme in 1993 and 1994, and Mr. Gingrich sought to have Republican candidates adopt the message as well in their campaigns. In the context of political campaigns, Mr. Gingrich told the subcommittee that the term "welfare state" was used as a negative label for Democrats and that the term "opportunity society" was used as a positive label for Republicans. As general chairman of GOPAC during this period of time, Mr. Gingrich had decided that GOPAC would use the "Renewing American Civilization" message as its political message and as its theme during 1993 and 1994. GOPAC, however, was having financial difficulties at this time. It could not afford to disseminate its political messages, as it had in the past. And it looked for other ways in which to do this. GOPAC had a number of roles in regard to the course.
For example, GOPAC personnel helped to develop, manage, promote, and raise funds for the course. GOPAC charter members helped the idea to even teach the course, and GOPAC charter members at one its charter meetings developed some of the messages that would be used in the course and used for GOPAC. According to Mr. Gingrich, GOPAC was better off as a result of the nationwide dissemination of the "Renewing American Civilization" message that was done by the course because the course disseminated the message of the movement and of GOPAC without cost to GOPAC. The major costs for "Renewing American Civilization" as a course were for the dissemination of the lectures. There was very little money needed to be spent to actually put the course on, itself. This expense of dissemination of the message and of the lectures was paid for tax-deductible contributions that were made to various 501C-3 organizations that sponsored the course. Over the three years that the course was broadcast approximately $1.2 million was spent on this project.
KWAME HOLMAN: Cole then laid out the subcommittee's conclusion based on that evidence.
JAMES COLE: In both instances GOPAC had initiated the use of the message that was in each of those projects as part of its political program to build a Republican majority in Congress. In both instances there was an effort to have the material appear to be non-partisan on its face yet serve as a partisan political message for the purpose of building the Republican Party. The subcommittee's expert was of the opinion that these facts presented a clear violation of 501C-3. Mr. Gingrich's tax attorney disagreed. Both, however, would have advised their client in these situations not to use a 501C-3 organization for these purposes.
Some members of the subcommittee and I agreed with the expert that was retained. Other members of the subcommittee were troubled by reaching this conclusion and believed that the facts of this case presented a unique situation that had not previously been addressed by the legal authorities. As such, they did not feel comfortable supplanting the functions of the Internal Revenue Service or the tax court in rendering a ruling on what they believed to be an unsettled area of the law. In looking at this conduct in light of all of the facts and the circumstances the subcommittee was faced with a disturbing choice.
Either Mr. Gingrich did not seek legal advice because it was aware that it would not have permitted him to use a 501C-3 organization for the projects, or he was reckless in not taking care that as a member of Congress he make sure that his conduct conform with the law in an area where he had ample warning that his intended course of action was fraught with peril. The subcommittee decided that regardless of the resolution of the 501C-3 tax question, Mr. Gingrich's conduct in this regard was improper, did not reflect credibly on the House and was deserving of sanction.
KWAME HOLMAN: Cole then referred to letters Gingrich sent the Ethics Committee asserting GOPAC had no involvement with the college course, a position Gingrich later reversed.
JAMES COLE: Mr. Gingrich's lawyers said they relied on Mr. Gingrich and his staff to ensure that the letters were accurate; however, none of Mr. Gingrich's staff had sufficient knowledge to be able to verify the facts of the letters. The only person who reviewed the letters for accuracy with sufficient knowledge to verify those facts was Mr. Gingrich. During his testimony before the subcommittee Mr. Gingrich stated that he was very busy during the times that the letters were prepared; that he did not intend to mislead the committee; and he apologized for his conduct. This statement was a relevant consideration for some of the members of the committee but not for others.
KWAME HOLMAN: A copy of Cole's final report has been sent to each member of the House who on Tuesday will vote on a punishment for Gingrich.
JAMES COLE: Under the rules of the House a reprimand is the appropriate sanction for a serious violation of the House rules. A censure is an appropriate sanction for a more serious violation of House rules. It was the opinion of the subcommittee that this matter fell somewhere in-between.
KWAME HOLMAN: Cole and the subcommittee agreed on a reprimand, which would allow Gingrich to retain his speakership and a $300,000 fine to reimburse the committee for extra work it had to do because of inaccurate information sent to it under Gingrich's name. Gingrich and his lawyer Randy Evans have accepted that recommendation. Evans spoke once Cole had finished.
RANDY EVANS, Gingrich's Lawyer: I think that while the facts are largely not in dispute that the conclusions and analysis of those facts may, in fact, be in dispute, and different conclusions may be drawn because I believe that while certainly the facts are carefully stated in the special counsel's report, I think that they are often stated in a way which ignores the realities and the context in which the events that are being described was occurring. The Speaker was not charged with violation of U.S. tax laws. The Speaker was not charged with intended to deceive the committee. The Speaker was not charged with illegal activities or criminal tax violations. The Speaker was not charged with money laundering.
And any suggestion that has been made in the press or otherwise by any member or by any other entity that any of those items are true are false and maliciously false, given that the statement of alleged violation has been in the public domain, free for anyone to read the statement of alleged violation to see, in fact, what it charges. I should note that the standard, as Mr. Cole pointed out, for the subcommittee was whether there was any reason to believe that a violation had occurred. We could only conclude that not only did the statement of alleged violation not charge any of those items, but there was no reason to believe that a legal or criminal or other such activities occurred.
KWAME HOLMAN: Gingrich, himself, did not appear at the hearing, and his problem might not end with the House vote on Tuesday. The Justice Department reportedly is considering its own investigation of the ethics violations.