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APRIL 17, 1997
SPEAKER ANNOUNCES PLAN TO PAY $300,000 REIMBURSEMENT WITH PERSONAL FUNDS TO PROTECT TAXPAYER
Washington, D.C. -- In an example of accountability, Newt Gingrich announced that he will reimburse taxpayers in full using $300,000 of personal funds. In order to fulfill his promise, Gingrich has secured a loan from Bob Dole to be repaid in full in a timely manner.
"Marianne and I decided, whatever the consequences, we had to do what was best, what was right, morally and spiritually," said Gingrich. "We had to put into perspective how our lives had been torn apart by the weight of this decision. We had to take into account the negative feelings that Americans have about government, Congress, and scandals. We had to take into account the responsibility that the Speaker of the House has to a higher standard. And that is why we came to the conclusion -- of our own choice without being forced -- that I have a moral obligation to pay the $300,000 out of personal funds ... that any other step would simply be seen as one more politician shirking his duty and one more example of failing to do the right thing."
"Therefore, I have arranged to borrow the money and to pay it back. The taxpayers will be fully reimbursed. The agreement will be completely honored. The integrity of the House's ethics process will have been protected. This is my duty as Speaker and I will do it personally."
In January, both the Speaker and the Committee agreed to a $300,000 reimbursement for the additional cost to the Committee resulting from two inaccurate letters prepared by lawyers and reviewed by the Speaker to respond to Committee inquiries. In the words of Committee Representative Steven Schiff, the Committee was "deliberately silent" on how the $300,000 should be paid. Although campaign funds could legally have been used for that purpose, the Speaker felt a personal payment was the most appropriate means to bring the reimbursement issue to closure.
-- The reimbursement was not a "fine." The Committee itself makes it clear that it is a reimbursement of legal expenses and costs only.
-- The Committee on Standards of Official Conduct imposed no restrictions on how the reimbursement could be paid.
-- Speaker Gingrich could have used campaign funds to reimburse the Committee. Others have used campaign funds for reimbursements and fines.
-- Speaker Gingrich could have used the Newt Gingrich Trust Fund approved by the Committee for the stated purpose of paying the reimbursement. The Newt Gingrich Trust Fund (which was limited to $250 per individual U.S. citizen in contributions) was more restrictive than any trust ever approved by the Committee or the Clinton Trust and more restrictive than the rules of the Committee require.
-- Instead, the Speaker chose to do the right thing by reimbursing the taxpayers and taking full responsibility. Newt Gingrich will personally pay the entire amount through a loan from former U.S. Senate Majority Leader Robert Dole.
-- The loan is:
-- a legal obligation;
-- at the interest rate of 10%, compounded annually;
-- due and payable within eight years;
-- collectible only from Newt Gingrich;
-- which cannot be forgiven.
-- The Committee on Standards of Official Conduct has stated that such a loan is a permissible option for payment of the reimbursement so long as it complies with all applicable rules.
-- Speaker Gingrich came to the conclusion that it was simply wrong to ask the taxpayers to pay for an investigation that should have been unnecessary except for letters prepared by lawyers and reviewed by him that contained inaccurate information.
-- Speaker Newt Gingrich's action today puts this matter to rest. In this Congress, the Speaker will continue to lead House Republicans in accomplishing the American people's agenda: lower taxes, less government, stronger families and communities.
COMMON QUESTIONS ON THE REIMBURSEMENTQ: Is this a sweetheart deal on the loan? Does it have a special low interest rate?
The loan meets commercial bank standards for a loan of this amount and term. The interest rate on the loan is the prime rate plus 1.5% -- currently 10%. By getting the loan from former Senate Majority Leader Bob Dole rather than a major commercial bank or other lending institution, the Speaker successfully avoided even the appearance of a conflict of interest. Dole, one of America's most trusted and respected statesmen, gains nothing from the loan other than the opportunity to assist a friend.Q: Why is Bob Dole doing this?
As Dole said, "In taking responsibility for his actions and making this difficult decision despite other options for payment, [Speaker Gingrich] has yet again shown himself to be a man of integrity. As a senior leader of the Republican party, I am pleased that our highest-ranking elected official has chosen to set an example of accountability and ethics for the nation through his words and his actions. ... I consider this not only an opportunity to support a friend, but a long-term investment in the future of our party."Q: Isn't "cost assessment" just a pleasant euphemism for "fine"?
No. A 'fine' means a legal penalty for a misdeed, and for that reason, the term was specifically and intentionally not used in the Committee report. The $300,000 to be paid by Newt Gingrich is solely for the reimbursement of legal expenses and costs incurred by the Ethics Committee.
As Committee Member Steven Schiff (R-NM) said at the Sanction Hearing, "the reason we used the term 'cost assessment' is to emphasize how we came to the conclusion to invoke it. As Mr. Cole said, we thought of a fine as a penalty to deprive somebody of a personal gain. But Mr. Gingrich never gained personally from this effort. I'm sure, in fact, it cost him in terms of time and effort." Therefore, the only legitimate terms to use regarding the $300,000 are "reimbursement," "cost assessment" or "repayment."Q: Doesn't this set a precedent that all Members of Congress will now be personally liable for paying any future penalties or reimbursements out of personal funds?
As each case before the Committee must be resolved individually on its own merits, this method of payment will set no precedent for future ethics cases or agreements. The Speaker will introduce a resolution to ensure no precedent is set. In fact, the ethics committee approved at least one other option that was not used for the $300,000 reimbursement. Having made a very personal decision on how best to pay, the Speaker feels very strongly that every member should be given the same leeway and flexibility in evaluating their options and making their own decisions.Q: What guidance did the Ethics Committee give to the Speaker on paying the $300,000?
The Ethics Committee placed no restrictions on how the Speaker could choose to pay the reimbursement. In the words of Committee Member Steven Schiff (R-NM), the committee was "deliberately silent" on that issue. Representative Marge Roukema (R-NJ), concurred that the "resolution leaves repayment to the Speaker's discretion."
The Committee's ranking Democrat, Ben Cardin (D-MD), told the Los Angeles Times that "We didn't want to micro-manage this. All we said was that the money had to come from a legal and ethical source." (Los Angeles Times, 1/23/97) When asked whether there were limits on how the money should be repaid, Special Counsel James Cole told the Committee that "he should make sure he pays it in an ethical manner, in accordance with the law, perhaps with legal advice. It is up to him to do it the right way."
Clearly this full personal payment surpasses those high ethical and legal standards.Q: Could the Speaker have used his campaign fund to pay the $300,000?
Yes. Candidates have wide discretion over the use of campaign funds. Under the Federal Election Campaign Act of 1971, the $300,000 reimbursement is not considered a "personal use" and is not otherwise "unlawful." Hence, it could have legally been paid with campaign funds. In more than 30 previous documented cases, candidates and officeholders legally used campaign funds to pay for expenses ranging from $62 in parking tickets to a $150,000 Federal Election Commission fine.
The Speaker chose not to use campaign funds because he believed a personal payment would be the most appropriate means to bring the reimbursement issue to a timely resolution and closure. He also believed paying the reimbursement himself would send a strong signal to all Americans about responsibility, accountability, and duty.Q: Wasn't the Speaker found guilty of lying to Congress and the Ethics Committee? Didn't he commit a crime? Didn't he break tax laws?
The Speaker was not charged with violating U.S. tax laws. He was not charged with intending to deceive or "lying" to the Committee. He was not charged with illegal activities or criminal tax violations. The Committee did not find any violation of U.S. tax laws, misuse of tax laws, a "pattern of abuse" or that "lies" were told to the Committee. Those baseless charges -- often made by Democrats -- are completely and totally false.Q. Doesn't this prove that all the ethics charges against Gingrich were true?
Since Newt Gingrich was elected Minority Whip in 1989, the Democrats have filed more than a hundred frivolous, spiteful, and vindictive ethics complaints against him. Of the 81 complaints filed against Gingrich since his election to Speaker in 1995, this is the only one that has not been dismissed or decided in the Speaker's favor. (And the reimbursement relates only to how he was represented by counsel in responding to another complaint.)
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