Gingrich Campaign Warned 2nd Time for Financial Dealings

By Gary P Jackson

For the second time in as many months we are hearing about financial irregularities within the Gingrich campaign.

Back in January Ken Vogel wrote that Newt, through his various little companies, was basically paying himself to campaign for president:

Newt Gingrich’s campaign paid him $47,000 for a list of supporters and paid one of his companies another $67,000 for web hosting, according to a report filed Tuesday with the Federal Election Commission.

The report paints a picture of a campaign that is working to professionalize, but continues to be based in part around the candidate himself and the network of companies and non-profits that he built after leaving Congress.

The report shows that the former House speaker’s campaign raised $9.8 million in the last three months of the year, but that it spent almost that much — $8.1 million — and finished the year with $2.1 million in the bank and $1.2 million in debt.

Gingrich’s year-end fundraising is expected to be dwarfed by that of rival Mitt Romney, who has yet to file his fourth quarter FEC report. But Gingrich’s campaign, which got new life after his strong win in the South Carolina primary, said its fundraising has surged in January, announcing it had pulled in $5 million this month.

In the fourth quarter, the campaign invested in fundraising, spending $978,000 on direct mail and Internet fundraising, and it hired more staff, paying $279,000 in salaries, and opened more offices, paying $124,000 in rent.

Still, even as the campaign professionalized, it continued to lean on the network of companies and non-profits Gingrich built after leaving Congress.
For instance, it paid $67,000 for web hosting to Gingrich Productions, which had previously received payments for web development totaling $8,400.

The campaign also paid Gingrich himself $47,000 for a list of supporters, plus another $206,000 for travel.

It’s not unusual for for campaigns to pay rent or buy lists from political committees or non-profits affiliated with the candidate, and it’s fairly common for campaigns to reimburse staffers for travel or other expenses.

But it’s unusual for a presidential candidate personally to be paid significant amounts for travel or lists — both because candidates can contribute an unlimited amount in cash or services to their own campaigns and because campaigns typically foot travel costs directly. And the Gingrich campaign did not immediately respond to questions about the payments.
Gingrich has a penchant for flying private charter jets, and the campaign appears to have reined in its payments to his charter jet company of choice, Moby Dick Airways, which was paid $133,000 in the fourth quarter for private jet air fare. Still, the campaign reported owing the company $352,000, as well as $472,000 to a phone banking company for “telemarketing program costs.”

Nice deal if you can pull it off.
Now the Washington Times is reporting the Federal Elections Commission [FEC} is warning Newt for the second time to get his act together.

Newt Gingrich’s presidential campaign has received a second warning from the Federal Election Commission (FEC) for widespread financial irregularities, saying the campaign must disclose why nearly $1 million was paid to the candidate, staff and a small group of fundraising consultants for questionable reimbursements.
But hours after the FEC letter on its 2011 finances became public, the campaign filed a report for a newer time period, January, that indicated that the problems have become far worse.

The campaign transferred Mr. Gingrich $88,000 last month for unspecified “travel” expenses, a pace far higher than he paid himself over the course of 2011, a federal report filed Monday showed. It was part of $220,000 in mystery money that month that went to people close to Mr. Gingrich on top of their salaries, raising the issue of potential self-dealing.

The FEC warning letter was issued the day The Washington Times documented the suspect reimbursements.

Gingrich spokesman R.C. Hammond had told The Times that the payments were a result of Mr. Gingrich footing bills early in the campaign and getting reimbursed because no bank would give the campaign a credit card. He had said the campaign was finally able to obtain a credit card late last year, so there would be no reason for the pattern to continue in 2012.

The January payments came in two checks over four days at the end of the month. He would not explain the discrepancy this week.
The FEC’s objections are not to the idea of a candidate and staff fronting costs and getting reimbursed, but because the technique has caused a huge segment of the campaign’s expenditures to become a black box. Rule books say every restaurant, vendor, hotel or other company that receives more than $200 in donated funds must be disclosed, even if a billing conduit is used.

A separate disclosure Monday showed that Becky Burkett, a former top official of a nonprofit Mr. Gingrich headed who now runs a pro-Gingrich super PAC called Winning Our Future, paid herself $220,000 in donated money last month — making more in 20 days than any other super PAC official has made in total since the groups exploded onto the scene, a review by The Times showed.
Super PAC spokesman Rick Tyler said the payments compensated her for November, December and part of January. The fund brought in its first donation Dec. 7. Although that rate puts the Gingrich confidante on pace for an annual salary in the millions, Mr. Tyler noted that political work isn’t assured.

In this business, we all could be out of a job next — you just don’t know,” he said. “People make more knowing that this could be a short-term contract.”

Among several other staffers, Gregg Phillips also received $90,000 in January.
Administrative responsibilities for super PAC finances are far simpler than those for campaign committees because there are only a few major checks to keep track of rather than thousands of small ones, and many are from established allies. Winning Our Future has about 100 donors.

The donations they do bring in, of course, are more sensitive. Mr. Tyler indicated that the super PAC officials receive commission for money raised.

Ms. Burkett received $100,000 for fundraising services Jan. 23, the day before longtime Gingrich supporter Sheldon Adelson, whose family has provided nearly all the PAC’s money, made out a $5 million check.

Problems extend to nonprofit

Mr. Gingrich’s presidential campaign operations are nearly identical to those of the nonprofit he left to pursue the bid, American Solutions, which Ms. Burkett, who lives in small-town Georgia, received $320,000 over 18 months for helping run.

The accounting practices that are especially fast and loose for a presidential campaign began with the older group, which raised $50 million between 2007 and 2010, but spent most of it on fundraising expenses. It spent $7 million on payments to travel-specific companies, including $3.2 million for a private jet, in addition to reimbursing staffers $1 million for unspecified travel expenses.
It paid $6 million in salary to about 30 staffers, the core crew of which is now on the campaign or super PAC.

The nonprofit’s finances also showed that the favored Gingrich explanation for payments can mean just about anything: Disbursements described simply as “travel” include $100,000 for a speaker’s fee and $650 at a Washington, D.C., bar.

Read more here.

This is not only sloppy, it goes to Newt’s character, and love of the high life. Newt seems to have no problem spending other people’s money on his extravagant lifestyle. For a so-called Conservative, this cat is burning through some money.

We need serious people leading our nation. We already have a president and first lady who think taxpayers should foot the bill for lavish vacations and house parties. Not seeing how Newt would be any different, if his current and past record are used as predictors of the future.


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