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January 1997 special counsel report to the House ethics committee.



Ethics Panel Supports Reprimand of Gingrich By John E. Yang and Helen Dewar

Washington Post Staff Writers

Saturday, January 18 1997; Page A01 The House ethics committee recommended last night that House Speaker Newt Gingrich (R-Ga.) face an unprecedented reprimand from his colleagues and pay $300,000 in additional sanctions after concluding that his use of tax-deductible money for political purposes and inaccurate information supplied to investigators represented "intentional or . . . reckless" disregard of House rules. The committee's 7 to 1 vote came after 5 1/2 hours of televised hearings and the release of a toughly worded report on the investigation by special counsel James M. Cole. The recommendation, which followed a week of partisan conflict that has split the House into warring camps, sets the stage for a resolution of this investigation into Gingrich's actions. Gingrich earlier admitted he had violated House rules and was prepared to accept the committee's recommendation for punishment. If the full House votes as expected on Tuesday, Gingrich would become the first speaker to be reprimanded for his conduct and would begin his second term politically weakened and personally diminished. "This is a tough penalty," Rep. Nancy L. Johnson (R-Conn.), chairman of the ethics panel, said after the vote. "I believe it is an appropriate penalty. It demonstrates that nobody is above the rules." Cole said he had concluded that Gingrich had violated federal tax law and had lied to the ethics panel in an effort to force the committee to dismiss the complaint against him. He said the committee members were reluctant to go that far in their conclusions, but said they agreed Gingrich was either "reckless" or "intentional" in the way he conducted himself. "Neither choice reflects creditably on the House of Representatives," he said. Moments after Cole spoke, Gingrich's lawyer, J. Randolph Evans, said Gingrich had agreed to the proposed punishment in the case. "The speaker himself has apologized to the subcommittee, to the House and to the American people," he said. Another Gingrich attorney, former representative Ed Bethune (R-Ark.), said: "He has a good heart. I just hope that for Newt, for his family, for the House . . . for the country . . . I hope that this is closure on this case." The hefty sanction imposed on Gingrich was described as a "cost assessment" and not a fine, and designed to reimburse the committee for prolonging the investigation. Cole said the $300,000 figure was "the product of a sense of the seriousness of the violation . . . tempered by reality" and was "needed to send a message." Gingrich can pay the penalty out of campaign funds, if he chooses, but press secretary Lauren Maddox said he has not decided what to do. Gingrich's campaign committee has more than $1 million in cash, according to Federal Election Commission records. Cole also said that while federal tax law contains arcane provisions, other provisions of the code are as clear as "headlines" in the newspaper. He said that the speaker should have acted far more cautiously with regard to federal tax law because there was such a "clear partisan intent" to activities financed with tax-deductible money. "Mr. Gingrich ran a lot of very yellow lights," he said. "Orange lights. There were bells and whistles going off." Later Cole said, "He was taking risks . . . going right up to the edge." Cole also said that while the committee had not reached a conclusion about whether Gingrich had violated tax laws, that matter will be left to the Internal Revenue Service. The committee plans to make available its files to the IRS. In addition, the panel has not yet resolved complaints that Gingrich received improper gifts, contributions and support from GOPAC, a political action committee he once headed. Cole disclosed that in its original statement of alleged violations, the investigative subcommittee had charged Gingrich with three counts of violating House rules, two for having failed to seek proper legal advice on the tax laws and one for providing the committee with inaccurate information. But Cole said committee members were anxious to bring the ethics case to a swift conclusion without a lengthy disciplinary hearing, which he said could have "put the House in some turmoil for up to six months." So the members encouraged him to enter into negotiations with Gingrich and his lawyers. As a result of those negotiations, completed on Dec. 20, the three counts were combined into a single count of engaging "in conduct that did not reflect creditably on the House of Representatives." In return, Gingrich agreed to admit to the violations, and face a reprimand and the financial penalty. Gingrich made no statement yesterday about the case. He spoke to the Republican National Committee meeting, where he received a standing ovation, but did not mention the ethics investigation. His only public statement came last month, when he acknowledged he brought discredit to the House by failing to ensure that the financing of various projects would not violate federal tax law and by giving the ethics committee false information. He said the violations were not intentional. Gingrich and his wife, Marianne, were in the speaker's Capitol office yesterday but did not watch the ethics committee's proceedings, although other television sets in his suite were tuned to them, according to Maddox. Rep. Benjamin L. Cardin (Md.), the top Democrat on the investigative subcommittee, said: "It isn't a very pleasant matter to sit in judgment . . . but it must be done. . . . This is a sad day." Rep. Lamar Smith (R-Tex.), who cast the lone dissenting vote against the committee recommendation, said he believed Gingrich was being unduly punished simply because he is the speaker. "There's an appearance here of at least a double standard being applied," he said. In his first public presentation of the findings of his year-long investigation, Cole calmly and evenly spelled out the panel's case against Gingrich, the details of the deliberations that led to the charges against the speaker, and the negotiations that led to revisions in those charges, Gingrich's admission of guilt and acceptance of a penalty. The hearing seemed almost an anticlimax compared with the week of turmoil that led up to it. Last week, the committee agreed to a full week of televised hearings, only to see that proposal scuttled in partisan bickering, made more acrimonious by the disclosure of a taped telephone conversation involving Gingrich and his top lieutenants that appeared to show Gingrich breaking his agreement with the ethics panel. The controversy over the tape, which gave Republicans ammunition that Democrats were waging a partisan vendetta against the speaker, resulted in a decision by Rep. Jim McDermott (Wash.), the top Democrat on the full ethics committee, to withdraw from the case after he was implicated in leaking the tape to three newspaper reporters. But if the tone of the hearing lacked the electricity or partisan rhetoric of the political battle that has raged for weeks, the account of Gingrich's activities laid out by Cole in his opening statement to the committee represented a far more stinging description of the speaker than the 22-page Statement of Alleged Violation -- the congressional version of an indictment -- that the investigative subcommittee issued and Gingrich agreed to Dec. 21. Cole made clear he had concluded that Gingrich's activities were not random acts but part of a pattern of questionable behavior. "Over a number of years and in a number of situations, Mr. Gingrich showed a disregard and lack of respect for the standards of conduct that applied to his activities," he said. The special counsel also provided further evidence of how Gingrich misled the committee. Earlier the ethics subcommittee pointed to a contradiction in the information Gingrich gave investigators. In October 1994 he said GOPAC was involved in setting up a college course that was financed with tax-deductible money. In December 1994, he said GOPAC was not involved. Last September the committee announced it was expanding its investigation to examine whether Gingrich had misled investigators. On Oct. 1, the committee asked Gingrich for further information about the discrepancy, and on Oct. 31 Gingrich responded. "One would have thought that, when we pointed out the letters, he would have read them," Cole said. "And if something was wrong, you thought he would bring it to our attention. But he did not. . . . Instead he sends us a letter repeating what he said before. He doesn't see anything wrong. Well, that makes it tough for us to understand that in fact this is as innocent as some people would have us believe." Cole also described in considerable detail the negotiations with Gingrich's attorneys that led to the speaker's statement agreeing to the findings. In addition to combining three counts into one, the committee altered an original charge dealing with the false information given to the panel to include language pointing out the role of one of Gingrich's attorneys in preparing the material. In addition, the word "knew" was dropped, making the charge read that Gingrich had submitted information that he "should have known" was false, blurring the question of whether he acted intentionally. As part of the agreement, the two Republicans and two Democrats on the subcommittee said they would support the agreed-upon punishment of a reprimand and financial penalty in both the full ethics committee and the House. Ethics committee rules say a reprimand is "appropriate for serious violations" of House rules, while a censure, second in severity only to expulsion, is appropriate for "more serious violations." "It was the opinion of the subcommittee that this matter fell somewhere in between," Cole said. A censure would threaten Gingrich's speakership, as House Republican Conference rules bar censured lawmakers from being committee chairmen and, by inference, holding leadership posts. As part of the Dec. 20 deal, Gingrich also agreed not to make any public comment on the matter before the House voted on a punishment. "This includes having surrogates sent out to comment on the matter and attempt to mischaracterize it," Cole said the next day, according to the panel's records. Cole said there was "a lot of spin" from both Democrats and Republicans, but added that committee members concluded "there was reason to believe" the agreement had been violated. However, the panel decided against taking any action in the interest of a speedy resolution of the case. The ethics process was tumultuous to the end; it was unclear until little more than three hours before the hearing began whether it would take place or how it would proceed. "There have been rough spots in the procedural road . . . serious misunderstandings along the way," Johnson said with some understatement. The case against Gingrich began on Sept. 7, 1994, when former representative Ben Jones (D-Ga.), who was then running against Gingrich, filed an ethics complaint. On Dec. 6, 1995, the ethics committee said the allegation was worth "further inquiry" and, on Dec. 22, hired Cole to conduct the investigation. Last Sept. 26, the probe was expanded to investigate whether Gingrich provided "accurate, reliable and complete information" to the panel. Gingrich is only the second House speaker to be charged with wrongdoing. The first was Jim Wright (D-Tex.), who resigned in 1989 just 45 days after the ethics committee accused him of using bulk sales of books to get around House honoraria limits. That probe was triggered by a complaint filed by Gingrich. Meanwhile, House GOP leaders are discouraging lawmakers from filing ethics complaints against McDermott, part of an effort to tone down partisanship and an acknowledgment that the FBI is investigating and McDermott is potentially facing serious legal problems. Staff writer Dan Balz contributed to this report.

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