Guilty as Charged

...Traditionally, however, the IRS has tended to give such groups the benefit of the doubt when questions arise...

...Even Jimmy Carter gets a plug for his running a non-profit housing effort in Atlanta...

...BY WIWAli (ICH 22 April 1997 • The American Spectator Mr...

...Instead, it accepted the Peace Media Project's explanation that the ad constituted a "charitable and educational activity...of benefit to low and moderate-income people...

...More likely, however, through some complex ruling, the IRS will declare that Newt was in violation of the law while all the other 501(0(3)s are not...

...The lectures were to be videotaped and sold as a package around the country...

...Whether the course served "another purpose" was turned over to the judgment of Celia Roady, a tax expert for the Exempt Organizations Committee of the American Bar Association...

...To this end, GOPAC put forth an agenda intended to "professionalize" congressional Republicans —a rather unusual goal since most members of Congress already consider themselves professionals...

...By any ordinary standard, "Renewing American Civilization" did not violate the tax law...

...Through an "echo effect"—call-ins to talk radio, letters to the editor—they would spread the message to the entire country...

...The last was deemed to be political in content, and transferred to the Council of Citizens Against Government Waste, a 5o1(c)(4) organization...

...In order to further that cause, he created a 20-hour televised college course in which he would lay the intellectual groundwork for the transformation, proving that the welfare state could not be repaired and must be replaced...

...The ethics committee cited Newt's involvement in ACTV as one of two instances where Gingrich "engaged in activity involving 5o1(c)(3) organizations that was substantially motivated by partisan, political goals...

...This section defines organizations that are set up for "education" and other "public purposes...

...Gingrich and GOPAC wanted something different...

...was plotting to overthrow the welfare state...

...Cole: A partisan use, if you will...

...First, there are a lot of former Democrats...

...whether Mr...

...W]e really urge people to be non-partisan and wide open...

...Progressive Foundation, Inc...

...Yet again, the ethics committee has pointed the way...

...Cole: And that was the main theme of the [college] course, was it not, replacement of the welfare state with the opportunity society...

...Gingrich believed such references would dissuade the target audience of non-voters from becoming involved...

...Moreover, his nefarious strategy was to identify the Democrats as the "party of the welfare state," while extolling the Republicans as champions of an "opportunity society...

...AOW had some success, but proved burdensome to GOPAC, consuming 62 percent of its budget in 199o...

...These shows were broadcast over the Family Channel...

...America can change course...

...Cole: And was there an effort to connect the Republicans with the opportunity society...

...In extolling the accomplishments of our past, he makes ample references to Franklin Roosevelt, Harry Truman, John F. Kennedy, and Dr...

...Gingrich sought and received approval to teach the course from the House ethics committee...

...Former White House aide Harold Ickes is now being investigated for using his office to direct a $5 million campaign contribution from a Texas businessman into the Democratic National Committee and four "friendly" get-out-the-vote groups: Vote Now '96, Defeat 209 (which opposed the California Civil Rights Initiative), Citizens' Vote, Inc., and the National Coalition on Black Voter Participation...

...Earn to Learn goes into housing projects during the summer and pays children to read...

...AOW then organized "workshops" around the country where people would discuss the shows...

...GOPAC made the academy a 501(c)(3), and for the first and only time in its history, the IRS said no...

...When the course was first taught, at Georgia's Kennesaw State College, the administration and fundraising were handled entirely by the Washington Policy Group, of which Eisenach was president and sole owner...

...That would be only fitting...

...The plan was to build a solid cadre of followers—"200,000 plus activists, [sharing] a common language and general vision of renewing America, and a commitment to replacing the welfare state...

...11,T1 AS CHARGED Galileo Gingrich would have been better off insisting that the Earth is fiat than speaking openly about opportunity and personal responsibility and private volunteer eff arts subversive notions that cried out for an Inquisition as smallminded and hypocritical and pre-determined as any in our political history...

...Gingrich: Yes, sir...

...Although the speaker obviously has some interest in helping ghetto children learn to read, the real purpose, according to the scenario painted by the ethics committee, was to show up the welfare state and prove that private volunteer efforts can do a better job...

...Cole: And a campaign use of that...

...The program—which Gingrich funded for the first two years out of his own pocket—has been remarkably successful and is now operating on a national level...

...Either Newt's course will be ruled not to have violated section 501(C)(3), in which case the ethics committee will have egg on its face...

...Egged on by their own victories, the Democrats may push to have Newt investigated by the IRS...

...The other purpose was to provide a means for developing and disseminating the message of Renewing American Civilization by replacing the welfare state with an opportunity society...

...In February 1995, for example, she was the "contact person" for an ABA memo to the IRS requesting that 5o1(c)(3) organizations be allowed to run candidate training schools virtually identical to the American Campaign Academy— except that they only be used to train "minority" candidates: What if the group is an indefinite class of persons that has been systematically under-represented in elective offices, such as African-Americans or people with disabilities...

...Gingrich: Absolutely...

...The main theme of the course is renewing American civilization and the main subset is that you have— that you have to replace the welfare state with an opportunity society for that to happen...

...Roady was a rather unusual candidate for such a role...

...As the ethics committee report put it: Mr...

...A partial list of 501(C)(3) foundations and their parent organizations include: The Sierra Club Fund and Sierra Club Legal Defense Fund (Sierra Club...

...After the word gets around that kids are being paid to read, it becomes a status symbol to walk around with an armful of books...

...Nevertheless, it decided: "[A] determination of whether there is a violation ...cannot be made simply by analyzing the content of Mr...

...Martin Luther King...

...That such a program might correspond to President Clinton's declared intentions in the 1996 election to build a coalition of women and racial and ethnic minorities is probably only a coincidence...

...What happens next will be even more interesting...

...Watching all this unfold, an observer might be tempted to ask, "Why on earth is the Speaker of the House spending his time talking about these things with a bunch of Reinhardt College commuter students...

...Cole: A partisan use...

...Roady, the facts as set forth above show that although the Renewing American Civilization course served an educational purpose, it had another purpose as well...

...One popular tactic among Democrats has been to set up non-partisan foundations to "get out the vote...

...S]econd, most young people under 40 are not politicized...

...25 In Lecture 2, for example, Gingrich undertakes the subject of organizing time...

...Articles in the Washington Post and the National Journal had queried whether these organizations served charitable or political purposes...

...In 1990 GOPAC tried a different tack...

...The minute you politicize this and you make it narrow and you make it partisan—you lose them...

...But did you know the real nature of the Speaker's crimes...

...The tax-deductible fronts, the nonpartisan disguises, the secret timetables — here, for the first time, is the whole story...

...AOW metamorphosed into American Citizens' Television (ACTV), which produced programs on three more subjects: the use of local access channels for activist movements, school choice, and Taxpayers Action Day...

...National Right to Life Committee (National Right to Life Committee...

...His phalanx of 2oo,000 informed citizens is obviously built on this model...

...Using an exercise from Peter Drucker's book, The Effective Executive, he assigns the class to keep a journal for the following week, noting how they spend every minute of their day...

...The ads were funded by Planned Parenthood Federation of America, Inc., a 5o1(c)(3...

...Seeking to take advantage of advancements in telecommunications, it set up the American Opportunities Workshop (AOW), which produced programs on various topics such as free enterprise, American values, and technological progress...

...Making this determination requires an analysis of...

...In fact, the IRS has only ever found one 501(c)(3) organization in violation of the law: the American Campaign Academy, a school for candidates set up in 1989 by GOPAC, the political action committee founded by Newt Gingrich...

...WILLIAM TUCKER, The American Spectator's New York correspondent, was co-writer of Newt Gingrich's recent book, To Renew America (HarperCollins...

...That Roady herself is a registered Democrat who has made political contributions totaling $1,500 to Emily's List, the Rangel for Congress Committee, and the Democratic National Committee is probably a coincidence as well...

...The charity provides a small library and pays children $2 a book, quizzing them to make sure they have read it...

...The costs are outrageously low, yet the effort can change the entire culture of an urban ghetto...

...National Organization for Women...

...For almost two decades, 5o1(c)(3) activities have been a dirty little secret of Washington politics...

...These 501(C)(3) entities are both non-profit and tax-exempt: they do not pay taxes, and money donated to them is tax deductible—making it much easier to raise money from wealthy people...

...The publication also examined a TV ad run by the Peace Media Project during the 1984 presidential campaign that criticized the Strategic Defense Initiative (Star Wars) and urged: "Think about it when you vote this November...

...The project was turned over to a new 501(c)(3), the Progress and Freedom Foundation (PFF...

...Gingrich discusses American exceptionalism, futurism, the Information Age, industrial invention, community service, the quality control theories of John Deming (who mentored Japan's industrial revival and was a personal friend of Newt in his last years), and the responsibilities of citizenship...

...Tax Code known as Section 5o1(c)(3...

...Gingrich hoped that this program would create a "citizens' movement...

...T he academy had been set up as part of a wider plan to revolutionize the GOP...

...Non-profits have also gone right to the edge in testing the law about influencing elections...

...There were the usual incestuous interactions...

...Why couldn't a charity operate a campaign training school to assist, for instance, Spanish-speaking people to become effective campaign operatives or even candidates themselves...

...Great reprimands must be reserved for great revolutionaries...

...Environmental Action Foundation (Environmental Action...

...The American Spectator April r 9 9 7 Gingrich's "tax-exempt" problems stem from an obscure section of the U.S...

...In 1993, members of Congress were founders, officers, or directors of 109 501(c)(3) organizations...

...The Washington Post put it slightly differently: Gingrich had been found guilty of "misuse of tax-exempt funds for a politically tinged college course...

...At the time the Republican Party was headed by George Bush and minority leaders in Congress, all of whom seemed resigned to being, as Gingrich put it, "tax collectors for the welfare state...

...Gingrich: Absolutely...

...Such accomplishments deserve to be judged by a different standard...

...In reprinting a 1989 National Journal article entitled "All-Purpose Loophole," the Exempt Organization Tax Review in December 1990 questioned whether there was any political activity by a 501(c)(3) that the IRS would not approve...

...And so, on the testimony of one "neutral tax expert," Newt's "unethical" reputation was forged...

...As the principal spokesperson for the ABA's exempt-organization committee, she has advocated expanding the exemption to allow more political activity...

...Newt Gingrich —are you ready for this...

...After a lengthy investigation, the IRS noted, "[W]e reluctantly conclude [that the group] probably did not intervene in a political campaign on behalf of or in opposition to a candidate for public office...

...It's time we went out of our way to let him know that his actions threaten the health and privacy of American women and don't represent the people of this area," the ads proclaimed...

...a surprising list of people who looked at both sides and decided we were right...

...If you read the New York Times, it was that Gingrich "used taxpayer financed projects to achieve partisan political ends...

...So too with Newt's discussion in Lecture 9 of his Earn to Learn Foundation, a charity Gingrich organized himself in 1990...

...In order to maintain 5o1(c)(3) status, an organization cannot pursue a "private purpose" nor engage in "partisan politics" or attempt to influence the outcome of elections...

...As the committee reports: "The course met the definition of 'educational' under section 5o1(c)(3) and served an educational purpose...

...A political action committee, also non-deductible, can give money directly to political candidates...

...The following week, he assigns another exercise involving personal habits: list ten things you would tell an immigrant who was just arriving in this country to learn...

...Long after Alan Cranston, Harold Ickes, and Celia Roady have faded from the Washington scene, Newt's historic role in the realignment of Congress will remain...

...Almost every single-issue organization in 23 Washington now has a nonprofit educational arm, often operating out of the same office...

...Newt is a big fan of Isaac Asimov's Foundation Trilogy, in which a self-conscious cadre of priests, modeled on the early Roman Catholic clergy, set about to rescue civilization in the midst of a galaxy-wide decline...

...AFT Educational Fund (American Federation of Teachers...

...In particular, the program highlights the long-standing conservative argument that giving money to unwed mothers in poor neighborhoods was subtly increasing their prestige and breaking down traditional prohibitions against illegitimacy A 11 this presented the ethics committee with a clear dilemma...

...Gingrich: Absolutely...

...By 199o, Gingrich had become obsessed with the idea that the American public could be won over to the idea of ending the welfare state...

...Gingrich: Absolutely...

...Gingrich: No...

...He set a target date for the 1996 presidential elections...

...4} Visit The American Spectator Online at .spectat onorg 26 April 1997 • The American Spectator...

...His ulterior motive was that if people learn to be responsible for themselves, they will no longer be dependent on the welfare state...

...So AOW was spun into a separate 5o1(c)(3), in this case the moribund Abraham Lincoln Opportunity Fund, which had been founded in 1984 by Denver entrepreneur Bo Callaway...

...had another nonexempt purpose...

...Groups such as Planned Parenthood that accept tax-deductible donations are flatly barred from engaging in such advertising," the Exempt Organization Tax Review noted...

...Alan Cranston ran a particularly active chapter of Project Vote, an allegedly non-partisan 5o1(c)(3) effort that probably won him re-election when he was under fire for the savings-and-loan scandal...

...The program was deliberately free of any references to the Republicans or partisan politics because Mr...

...The four are all tax-exempt 5o1(c)(3)s whose efforts are theoretically non-partisan...

...If not for Newt's course, it would appear, nobody would have ever associated the Democrats with the welfare state...

...Yet the effort to bring down the welfare state transcended party politics...

...Tell him not to do it again...

...While the program was educational, the citizens movement was also considered a tool to recruit non-voters and 24 April 1997 • The American Spectator people who were apolitical to the Republican Party...

...etc., etc...

...The American Spectator • April 1997 The crusade had an obvious political goal—winning control of both Congress and the presidency by 1996...

...or the new standard of "motivation" will be accepted, in which case Washington's entire 5o1(c)(3) empire will come crashing to the ground...

...The academy was politically partisan, the agency ruled, since it was only offering its education to Republicans...

...fames M.] Cole [special counsel]: During [the 1994 congressional campaign] was there an effort to connect the Democrats with the welfare state...

...Voters for Choice Education Fund (Voters for Choice Action Fund...

...But for the most part, the lectures are simply apolitical...

...During the 1990 congressional campaign, it noted, ads had appeared in the home newspapers of seven congressmen criticizing their opposition to abortion...

...An organization that takes a partisan stand on issues must set up under section 5o1(c)(4), where contributions are not tax exempt...

...Already burned by the American Campaign Academy experience, the Progress and Freedom Foundation was scrupulous about making "Renewing American Civilization" non-partisan and non-political...

...Gingrich originally planned to teach the course for four semesters...

...During the 1988 presidential campaign, five major candidates had their own 5o1(c)(3)s doing campaign research...

...Jeff Eisenach, Gingrich's long-time ally and alter-ego, moved over from head of GOPAC to head the PFF...

...To advance this plot, he was actually willing to stand before a group of Georgia college students and spend twenty hours discussing such ideas as personal discipline and the responsibilities of citizenship...

...It's all available in the 1,271-page ethics committee report...

...These registration efforts are concentrated almost entirely in precincts where people generally vote Democratic 90 percent of the time...

...Their announced purpose was to abolish the welfare state and replace it with what they called an "opportunity society...

...The second and greater offense was his college course, "Renewing American Civilization...

...When the kids first come in, they're afraid to tell other kids they're reading," recounts Gingrich...

...Democratic Leadership Council...

...Nevertheless, as a neutral expert for the ethics committee, Roady was allowed to declare that, despite outward appearances, "Renewing American Civilization" served "another purpose" that was in violation of the law: According to Ms...

...National Organization for Women Foundation, Inc...

...routinely and repetitively...

...But] we think on balance it is vastly more advantageous to us than it is to the left since they are the party of big city machines, they are the party of the unions, they're much more tied to the bureaucratic welfare state...

...Gingrich's activities...

...GOPAC loaned money to PFF (as it had done with the Abraham Lincoln Opportunity Fund...

...Gingrich's lectures...

...In the opening lecture, Gingrich states that America is in a crisis, "not in a Democratic-Republican sense, but as a civilization...

...In one 1990 congressional briefing, quoted in the report, Newt told fellow Republicans: [ S]ome Democrats will pick up the language and this is open to everybody, this is a free country...

...The American Campaign Academy was established to recruit candidates and "educate" them about the revolutionary new agenda...

...By discussing private discipline and the organization of time, Gingrich was trying to teach people personal responsibility...

...from In the Matter ofCongressman Newt Gingrich: Report of the Select Committee on Ethics y ou already know, of course, that Newt Gingrich was found guilty of something-or-other and fined $300,000 by Congress...