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Gingrich Pays First $50,000 Toward His Ethics Penalty

Terms of the Dole loan change in the repayment plan's latest version

WASHINGTON (AllPolitics, May 16) -- When House Speaker Newt Gingrich announced last month he would pay his $300,000 ethics penalty with a loan from Bob Dole, it took Washington by surprise. Democrats screamed it was a sweetheart deal.

On Thursday, Gingrich surprised his colleagues again with a new version of the deal: he will pay half the penalty from his own pocket and borrow no more than $150,000 from the Republican Party's elder statesman.

Gingrich made his first payment Thursday afternoon, with a $50,000 check drawn on his personal funds, then released documents that outlined the deal's new terms.

Under the new terms, Gingrich has promised to make two additional payments of $50,000 -- on June 1, 1998, and Nov. 30, 1998 -- and to pay the $150,000 balance by Jan. 2, 1999.

Gingrich says it sets 'the right standard'

Gingrich said he feels good about the new arrangement.

"The key was to do it in a legal and ethical way that everybody can look at and say, 'Yes, this sets the right standard for the U.S. House of Representatives and this is the way people should act in a responsible manner," Gingrich told reporters.

"So I feel very good about it," he added. "Both Mr. [James] Hansen and Mr. [Howard] Berman who served on the ethics committee feel that we worked this out in a way that is so far above any reasonable standard and so far above any question of reproach that we have done the right thing to set the right standard for the United States House of Representatives and I think that was my duty."

A spokeswoman for Dole said he will have no reaction to Gingrich's changes in the repayment plan. Dole did not ask for any changes to be made, the spokeswoman said. Dole has submitted a letter to the committee promising he would not contact Gingrich on behalf of clients of the Washington law firm where Dole works, Verner, Liipfert, Bernhard, McPherson & Hand.

Gingrich was reprimanded by the House in January, after admitting that he should have sought legal advice on use of tax-exempt groups to advance his political goals, and that he had provided inaccurate information to the House ethics committee.

The $300,000 penalty is designed to reimburse the government for the added costs of the investigation prompted by Gingrich's inaccurate information.

The repayment plan's new terms most likely will drain some of the fervor from Democratic complaints. Some of Gingrich critics thought it wrong that the terms of the original loan required no collateral and no payments until the loan was due in 2005.

In the new terms, however, the Dole loan would be repaid over a five-year period, starting in January 2000, with semiannual interest payments of $7,500. Gingrich also will put up collateral, including expected royalties from a book he plans to write for HarperCollins, and take out a second deed on his house in Marietta, Ga., if necessary.

The ethics committee has signed off on the new agreement, and no further action is required by the House. In a letter to Gingrich, Reps. James Hansen (R-Utah) and Howard Berman (D-Calif.) said the terms of the loan "are commercially reasonable and in conformance with applicable House rules and standards."