Newt Gingrich spent the last decade being paid by big business to convince conservatives to support big-government policies that would profit his clients.
Gingrich's consulting firm racked up $1.6 million in fees from the government-sponsored enterprise Freddie Mac, we learned this week from Bloomberg News. Gingrich's job was to help Freddie Mac win over conservatives to this market-distorting, bubble-fueling, housing-subsidy entity, which is now officially owned by the federal government.
We also know that Growth Energy, an ethanol lobby, paid $312,500 to the Gingrich Group in 2009, according to the group's tax filing. Growth Energy lobbies to preserve many ethanol subsidies and create new ones. Gingrich has consistently supported ethanol subsidies, despite his professed allegiance to the free market.
But there may be much more to Gingrich's advocacy work than has been reported so far. For instance, a former employee of the nation's biggest drug lobby told me Gingrich was being paid by the drug industry during the 2003 debate over the Medicare prescription drug benefit.
While the Bush White House and the Republican congressional leadership supported a bill creating a new entitlement for all seniors, Washington conservatives mostly opposed the bill. Gingrich went around Washington at the time plumping for the bill to free-market groups and activists.
"In the height of the debate," one conservative opponent of the bill told me, "Newt was calling around" selling the bill as a great conservative measure even though it was a new federal entitlement.
Bob Moffitt of the Heritage Foundation, another veteran of the Medicare drug battle, tells me that early in the debate Gingrich favored a Medicare drug benefit only for the poor. The drug lobby, however, had settled on backing a drug benefit for everyone on Medicare. Gingrich soon changed his tune, and began pushing the universal benefit.
The Pharmaceutical Research and Manufacturers of America is one of the largest lobbying organizations in the country, and it was a leading advocate of Bush's Medicare drug bill, which provides billions of dollars in subsidies for seniors to buy drugs, while prohibiting Medicare from negotiating for lower drug prices.
PhRMA support for the bill was key to winning over many Republicans, and right after the bill passed, PhRMA hired one of the bill's authors, House Commerce Committee Chairman Billy Tauzin, to be the group's president.
A source who worked for PhRMA at the time told me that Gingrich was being paid by "someone in the drug industry" -- either PhRMA, some other industry group, or a specific drug company -- as a consultant during the debate over the drug benefit. My source double-checked this with a former PhRMA colleague, who had the same recollection. The Gingrich Group operates the Center for Health Transformation, through which Gingrich publicizes his health care policy proposals.
"He received a monthly retainer," the former PhRMA employee recalls, saying Gingrich's price was "at the high end."
The Gingrich campaign did not respond to multiple phone calls and emails on the matter. When I called PhRMA, a spokesman told me he wasn't around at the time, and that he wouldn't help look into whether Gingrich had been paid by PhRMA. A spokeswoman for Gingrich's CHT said she would not discuss specific contracts, but that the group "has had a variety of clients throughout the years," including "health care companies, hospitals and drug companies."
In Congress, Gingrich was famously harsh toward moderate Republicans. He once attacked the more compromise-oriented Sen. Bob Dole, R-Kan., as "the tax collector for the welfare state." But with clients ranging from subsidy-suckling ethanol producers to government-created backstops for Realtors and banks, Gingrich cashed in by becoming the house conservative of the corporate-welfare state.
When Gingrich went on the "Laura Ingraham Show" to defend his work for Freddie Mac, the topic turned to the revolving door, which Gingrich has so lucratively mastered. Speaking of one of his favorite targets, House Financial Services Committee Chairman Barney Frank, D-Mass., Gingrich said, "If Barney wants to retire tomorrow morning and get a really big contract with someone, more power to him. It's called free enterprise."
This cavalier attitude toward the monetization of public service will likely irritate conservatives who fume at the cronyism and corporatism of the Obama administration, but they will be more disturbed by Gingrich's abuse of the phrase "free enterprise."
After all, when Gingrich retired in the middle of his term in 1999 and got huge contracts, he was being paid to promote the opposite of "free enterprise": subsidies, entitlements, and central planning. Republicans won't rally behind another politician who confuses "free enterprise" with getting rich.
Timothy P.Carney, The Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com. His column appears Monday and Thursday, and his stories and blog posts appear on ExaminerPolitics.com. source
