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Newt Gingrich’s Campaign Resurgence Funded by Secretive Coterie of Super PACs, Wealthy Backers

StoryDecember 23, 2011
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With the Iowa caucus less than two weeks away and the Republican presidential race still up for grabs, we take an in-depth look at the state of politics and money and how last year’s U.S. Supreme Court ruling in Citizens United v. Federal Election Commission has altered campaign fundraising since it opened the floodgates for unlimited corporate spending on election campaigns. Several recent exposés reveal how Newt Gingrich has skirted campaign finance rules to raise millions of dollars in unlimited donations from billionaire backers and big industry. McClatchy Newspapers recently reported Gingrich helped bankroll his resurrection as a candidate by exploiting a gap in federal campaign finance laws to create a political money machine that raised $54 million over five years. Meanwhile, the Center for Public Integrity has published new details on how Gingrich has the backing of two so-called super PACs that raise unlimited donations, but legally must operate independently of the campaign. We speak with Peter Stone, a reporter with Center for Public Integrity who has covered lobbying and campaign finance issues for the past two decades, and McClatchy investigative reporter Greg Gordon. [includes rush transcript]

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StoryNov 06, 2012In Landmark Ruling, “Dark Money” Group Tied to Citizens United Ordered to Reveal Its Donors
This is a rush transcript. Copy may not be in its final form.

JUAN GONZALEZ: The Iowa caucus is less than two weeks away. The Republican presidential race is still up for grabs. One recent poll in Iowa shows Texas Congressman Ron Paul in the lead, followed by Massachusetts Governor Mitt Romney and former House Speaker Newt Gingrich. Five different candidates have led the Iowa polls in recent months.

We turn now to an in-depth look at the state of politics and money and how last year’s Supreme Court ruling in Citizens United has altered campaign fundraising. The ruling opened the floodgates for unlimited corporate spending on election campaigns.

Several exposés have recently been published looking at how Newt Gingrich has skirted campaign finance rules to raise millions of dollars in unlimited donations from billionaire backers and big corporations. McClatchy Newspapers recently reported Gingrich helped bankroll his resurrection as a candidate by exploiting a gap in federal campaign finance laws to create a political money machine that raised $54 million over five years, including over $7 million from the billionaire Las Vegas casino owner Sheldon Adelson.

AMY GOODMAN: Meanwhile, the Center for Public Integrity has exposed new details on how Newt Gingrich is receiving the backing of two so-called super PACs that raise unlimited donations. Donors can provide unlimited donations to these independent groups that were formed to help Gingrich, but legally must operate independently of the campaign. Earlier this week, one of the super PACs, known as Winning Our Future, released this ad:

WINNING OUR FUTURE AD: Proven conservative leadership: Newt Gingrich. In uncertain times, we need a leader whose commitment to conservative values has been tested. Newt stood with Ronald Reagan. Newt stood up to Bill Clinton. And Newt was there for conservative values. But most importantly, Newt has always believed in the greatness of America, that America’s best days are ahead. The choice: Newt Gingrich, the proven conservative leader. Winning Our Future is responsible for the content of this message.

AMY GOODMAN: Newt Gingrich, of course, is not the only presidential hopeful benefiting from super PACs that take in unlimited donations. A Mitt Romney-aligned group called Restore Our Future PAC recently produced this anti-Gingrich ad.

RESTORE OUR FUTURE AD: And on the issues, Newt’s been on all sides. He supports amnesty for millions of illegal immigrants. Gingrich even teamed up with Nancy Pelosi and Al Gore on global warming. And Newt was a longtime supporter of a national health insurance mandate, the centerpiece of Obamacare. Maybe that’s why George Will called Gingrich the least conservative candidate. The Gingrich record: 30 years in Washington flip-flopping on issues. Check the facts at newtfacts.com. Restore Our Future, Inc., is responsible for the content of this message.

AMY GOODMAN: To talk more about money and politics, we’re joined by two guests in Washington. Peter Stone is reporter at Center for Public Integrity. He has covered lobbying and campaign finance issues for the past two decades in Washington. He is author of Casino Jack, a book about the Jack Abramoff lobbying scandal. And Greg Gordon is with us, investigative reporter for McClatchy’s Washington bureau.

Peter Stone, let’s start with you. Give us the overarching story of what you call the “independent gold rush” since the Supreme Court’s Citizens United decision.

PETER STONE: Well, last year, we began to see an enormous tidal wave of money going into new outside groups, the most prominent of which was American Crossroads and an affiliate called Crossroads GPS, which together raised about $71 million, including many multimillion-dollar contributions from old friends of Karl Rove, who is a founder of Crossroads.

This year, the new thing is presidential super PACs, candidate-specific super PACs. And we’ve seen these established, so far, by just about every presidential candidate. Romney has so far built the most lucrative one. Romney’s allies, three former aides who were involved with the 2008 campaign, started the super PAC early this year. And in the first six months, they raised $12 million. They were the first really out of the gate with the biggest pile of money in their coffers. They had a few multi—a few million-dollar contributions from old friends and supporters of Romney, including New York hedge fund mogul John Paulson gave a million dollars. And we have others now.

As Gingrich has begun to gain momentum in recent weeks, his allies have set up two of these so far. The most potent seems to be Winning Our Future, which is being run by a woman named Becky Burkett, who spearheaded the fundraising for the group you alluded to before, the 527 that Gingrich used for five years before his campaign. And Becky Burkett was joined this week by Rick Tyler, his longtime communications aide, who was briefly the spokesman for the campaign. Tyler is going to be helping to do fundraising and coordinate activities with the other super PACs, which is legal, to make sure they get the most bang for their buck and are most effective.

President Obama’s allies have set up these, as well. So far, they’ve not done very much in the fund—they have only raised a small amount, a few million dollars, but they’ll probably pick up early next year.

So we’ve had this rise of these super PACs. They’re supposed to be independent of the campaigns, but because of weak FEC rules and enforcement, there’s a lot of wiggle room, especially on the fundraising side. The most prominent example so far of overlap, if you will, or links between the super PACs and the campaigns, is probably a fundraiser that was held in July in New York, which I reported on, that Romney attended while he was in New York doing two other events—one for his campaign and one for a party committee. He dropped in on a fundraiser that was solely for the super PAC, Restore Our Future, and he spoke briefly there and then left. He was—the law allows him to do this. And the only restriction is that he is not allowed to ask for unlimited donations at these events. He can ask for a donation of up to $5,000, but nothing more. So, there are examples like this.

A top Romney aide this summer moved from the campaign to spearhead the fundraising at the super PAC, a fellow named Steve Roche, which was a sign that there was going to be more emphasis on these super PACs. So, we have a situation with these parallel groups set up that are now running the bulk of the negative ads. Romney’s, in particular, has been blasting away, spent a few million dollars in Iowa just in the last week or 10 days, and they’ve had a big impact on Gingrich’s standing there. Gingrich is starting to respond with softer ads, but we may see negative coming on in a while. He said he wants to keep it—you know, keep it friendly, but the dynamic of these super PACs is to go negative and do the dirty work that the campaigns won’t, or can’t, keep—let the campaigns stay above the fray, be positive. That’s, more or less, a quick overview of it.

JUAN GONZALEZ: Well, and Greg Gordon of the McClatchy Washington bureau, you’ve looked especially at how Newt Gingrich, before his campaign run, raised millions and millions of dollars with these types of organizations. And can you talk about that?

GREG GORDON: Yes. Former Speaker Gingrich set up a group in 2006 that is actually formed under a provision of the Internal Revenue Service Code, called a 527. And these groups are allowed to also raise unlimited donations. Before the Supreme Court ruling, they could spend them on political advocacy, but they could not try to defeat a particular candidate or advocate in favor of a particular candidate.

So what happened is that, basically—well, let me just take a step back. In the early 2000s, we saw the passage of this historic campaign finance overhaul, and the idea was to stop soft money, which were these unlimited donations to the national political parties. And the byword of this whole campaign was, we’re going to get the big money out of national politics. So here we are, less than a decade later, and we’re back to huge money, huge individual donations, and now coming from corporate treasuries, and potentially union treasuries, that basically can turn the tide as far as the finances of a particular election campaign.

OK, so what Gingrich did is yet another twist. He set up this group called American Solutions for Winning Our Future, and this group was raising money, and it was—it had a little—spent a few million dollars out of the $54 million, maybe $7 million, on a few campaigns, one of which was to try to overturn President Obama’s healthcare reform bill or act, and another was to fight climate change legislation and so forth. But the other thing that happened is that it bankrolled Gingrich as he flew around the country: $8 million in chartered flights, as he went around and rebuilt his profile after, you know, a long hiatus from his prominent role in politics, you know, in public service.

And so, you have kind of a bleeding here, because all of a sudden, last spring, former Speaker Gingrich announces he’s going to run for president. He never, unlike most of the other presidential candidates, formed an exploratory committee. He was all set up through this group. The question is, you know, did he use this group? These groups are supposed to be independent of candidates. Was he at any time really a candidate? How did this group benefit his campaign? And one way, I might note, is that there is a little charter airways company called Moby Dick Airways out at Dulles Airport outside Washington that flew him around, and his campaign also used that same company. And as of October 31st, its last report to the Federal Election Commission, it owed $451,000 to that airway—to that charter airway company. So, did that company float the campaign credit that it might not have gotten, were it not for its relationship with this 527 group that Gingrich, you know, used to reinvent himself?

JUAN GONZALEZ: And one of the big donors to his groups, Sheldon Adelson, could you talk about him?

GREG GORDON: Sheldon Adelson is a rabidly pro-Israel donor, and he operates two of the most elite casinos in Las Vegas: the Palazzo and the Venetian. And he is also listed by Forbes as the 16th wealthiest person on the planet. Mr. Adelson is a huge backer of Israeli Prime Minister Benjamin Netanyahu, and he in fact publishes a free newspaper that circulates in Israel that basically is an extra voice to boost the Israeli prime minister.

Gingrich and Adelson have been friends for quite a while, and Gingrich is a big booster of Netanyahu, as well. And perhaps it is no surprise, after all these donations from Adelson, totaling $7.65 million, that Gingrich has recently spoken against a—he talked about the Palestinian people as an invented people, and he talked about moving the embassy on his first day in office, the U.S. embassy to Israel, from Tel Aviv to Jerusalem, which would be an extremely provocative move to make in the Middle East.

Mr. Adelson, according to Politico just a few days ago, which quoted multiple sources, is planning to put $20 million into these super PACs that support Newt Gingrich. And so, you can see—now, Newt Gingrich has a huge deficit to make up between the latest number we’ve seen that his presidential campaign has raised, or that we’ve been told of by the campaign, is under $7 million, which is in fact less money than Mr. Adelson gave to the 527 group. And so, we see the possibility that wealthy donors, in a matter of a couple, three weeks, can totally change the playing field in terms of the money of a presidential campaign.

AMY GOODMAN: Peter Stone, you’ve also written about Sheldon Adelstein being investigated—Adelson.

PETER STONE: Right. Well, Adelson—let me just start—add a couple things to what Greg said. Adelson did vehemently deny the Politico story. But he left the door open. He called Politico. The guy is very reclusive, doesn’t talk to reporters. But he was pretty irked by the report, and he called them up, and he said, “I have made no commitment to do so.” He quickly added, though, “Doesn’t mean I won’t do so in the future.”

I did a follow-up story on it this week, where I talked to other sources, including old friends who he had signaled in recent weeks that he was probably going to help Gingrich. One of his old friends, Fred Zeidman, told me, on the record, that Adelson had said to him, “I’ll do whatever it costs” — quote — “I’ll do whatever it costs to help Gingrich.” I think he is going to be a little bit cautious. He has a record of—

AMY GOODMAN: We have five seconds.

PETER STONE: OK. Back to the investigation, very quickly, there is a Foreign Corrupt Practices investigation underway. The Justice Department and the SEC launched this. They’re looking into possible violations of this law involving potential bribery in Macau—


PETER STONE: —where Adelson’s—

AMY GOODMAN: I want to thank you for being with us, Greg Gordon and Peter Stone.

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In Landmark Ruling, “Dark Money” Group Tied to Citizens United Ordered to Reveal Its Donors

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