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Nov. 29 (Bloomberg) -- American Solutions for Winning the Future, a tax-exempt political organization Newt Gingrich founded in 2006, went out of business in July and is now $20,000 in debt to its landlord, according to Washington, D.C., Superior Court records.
No one has turned over the keys to the group’s K Street offices in downtown Washington, which still contain some furniture and office equipment. The U.S. Marshals Service will be sent in next month to retake possession of the group’s premises if the debt isn’t paid, said Michael R. Cogan, attorney for B.G.W. Limited Partnership, which leases the space.
Gingrich severed ties with American Solutions earlier this year to run for president. Still, Cogan said, the former Georgia congressman should have insisted the dismantling of his complex network of businesses and independent groups be done in a proper manner.
“Being a fiscal conservative and having the message of personal responsibility, you would think that even if you’re not legally liable, anything you’re involved with at this level you would want to have an amicable outcome or resolution,” Cogan said. His client “will be pursuing further legal action,” if necessary, to collect the back rent.
R.C. Hammond, Gingrich’s campaign spokesman, noting that the former speaker left American Solutions in May, said he is no longer responsible for its operations. “It was a successful venture when Gingrich was there,” Hammond said. “We are very disappointed that it’s no longer successful.”
American Solutions was just one of several enterprises launched by Gingrich after he resigned the speakership and his House seat in 1999.
His for-profit companies included a health-care policy operation known as the Center for Health Transformation and a set of entities -- Gingrich Communications and Gingrich Productions -- that arranged his lucrative public appearances and marketed his videos and books. Through The Gingrich Group, he conducted a consulting business that received retainers, sometimes as much as $30,000 a month, from corporations and trade groups to advise them on the ways of Washington.
Gingrich Group and the Center for Health Transformation brought in $55 million in revenue from more than 300 clients between 2001 and 2010, the Center said in a statement posted on its web site last week.
He also helped found a religious group called Renewing American Leadership, which is dedicated to preserving America’s “Judeo-Christian” heritage, and launched an Hispanic outreach website called “The Americano.”
Not Lasting Institutions
Though American Solutions is now defunct, it served its purpose for Gingrich, said Merle Black, professor of politics and government at Atlanta-based Emory University.
“He wasn’t really building institutions,” Black said. “He was into building organizations that he could use for various purposes. An institution is something that could survive the departure of the leader.”
Joe Gaylord, a Gingrich adviser of more than two decades, took over American Solutions earlier this year and said at the time that the group would continue operating without the former speaker. Though the organization raised more than $50 million under Gingrich’s leadership, it raised $2.5 million in the first half of this year, according to disclosure statements filed with the Internal Revenue Service.
“When a celebrity or someone of Newt’s stature has an organization like that, you need a message and a messenger. Once the messenger is gone, it’s very difficult to convince people to give money,” said Rick Tyler, a former Gingrich press secretary.
Gingrich founded the group with the mission statement that it would “create the next generation of solutions that will ensure that the United States remains the safest, freest, and most prosperous country in the world.”
The organization advocated offshore oil drilling and tax cuts and opposed President Barack Obama’s federal health-care law. It also held more than 300 meetings with Tea Party leaders throughout the country in the past two years, creating a bridge between the presidential aspirant and the party’s new activists. Those ties have helped Gingrich surge in recent polls.
Gingrich’s fundraising and spending practices at American Solutions drew criticism from government ethics groups, including the practice of calling potential donors under the pretext of conducting a poll. He would send out a mass mailing to small business owners and offer to name them “entrepreneur of the year” -- for the fee of $5,000, according to the Washington Post.
Gingrich used the organization and his other entities to build a mailing list of millions of names, which can be tapped for donations to his presidential bid. The organization also spent millions of dollars on chartered jet travel for Gingrich, according to its Internal Revenue Service disclosure reports.
The American Solutions offices are in the same building as those of the other Gingrich entities, albeit on a separate floor. At the American Solutions suite, the glass doors are locked. A few chairs, a printer, and supplies are still scattered around inside the reception area and can be seen beyond in the office space.
B.G.W. filed its case against American Solutions in the landlord-tenant division of Washington, D.C., Superior Court on Sept. 14, alleging that the organization owed $16,000 in back rent.
No one representing American Solutions appeared at an Oct. 6 court hearing. Paige Bray, who served as comptroller of the group until August, said in a telephone interview that she had “no idea” who was responsible for managing the group’s affairs.
Superior Court Judge A. Franklin Burgess Jr. ruled Oct. 19 that the organization owed $20,130 in back rent and court fees, and authorized the U.S. Marshals Service to evict American Solutions.
--With assistance from Julie Hirschfeld Davis in Washington. Editors: Jeanne Cummings, Robin Meszoly
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