Bloomberg News

Gingrich Firm Top Clients Got to Attend Signing of Favored Bill

January 30, 2012

(For more campaign news, go to ELECT.)

Jan. 26 (Bloomberg) -- Weeks after Newt Gingrich urged reluctant U.S. House Republicans to expand Medicare coverage for prescription drugs, he and some of the highest-paying clients of his health-policy center gained access to President George W. Bush’s bill-signing ceremony turning it into law.

“We found a way to get the job done,” Bush told a crowd of seniors, top lawmakers, Gingrich’s group and others gathered Dec. 8, 2003, at the Daughters of the American Revolution’s Constitution Hall in Washington. “This legislation is the achievement of members in both political parties.”

The inclusion of Gingrich’s clients at an event the public doesn’t commonly attend was touted in a December 2003 electronic newsletter on the website of his Center for Health Transformation. The bulletin is no longer publicly accessible.

While Gingrich’s $1.6 million payment for consulting work with government-backed mortgage company Freddie Mac has drawn scrutiny in campaign debates, his role in advocating for the expansion of Medicare has only recently become a topic of attacks by chief rival Mitt Romney, the former Massachusetts governor.

The former U.S. House speaker’s advocacy for the senior drug program is also the subject of a Jan. 5 complaint filed by Citizens for Responsibility and Ethics in Washington, or CREW, a group that monitors federal officials’ activities.

Seeking Federal Investigation

“We don’t actually know what he did for Freddie Mac, whereas he bragged about his accomplishments on Medicare,” said Melanie Sloan, CREW’s executive director. Sloan’s group has asked the U.S. attorney for the District of Columbia and the Federal Bureau of Investigation to investigate potential violations of the Lobbying Disclosure Act.

The disclosure act defines when registration is required, which largely is based on the amount of time dedicated to advocating for a paying client. Gingrich has never registered as a lobbyist, even though some of his activities mirror the performance of one.

The center’s representatives testified before congressional committees twice in 2003 and “worked with the Bush administration, key leaders in the House and Senate, AARP and key experts to develop and help pass a transformational Medicare bill,” according to his center’s December newsletter that year.

Gingrich ‘is talking to everybody, and he’s getting very important people to listen to him,” Joseph Antos, a health-care advocate who worked with Gingrich at the American Enterprise Institute, said in a Sept. 3, 2003, article in The Hill newspaper.

Republican Opposition

The proposal to cover prescription drugs for older Americans, known as Medicare Part D, was opposed by House Republicans who saw it as too costly and objected that the Bush administration didn’t have a way to pay for it. The Congressional Budget Office estimated it would cost an extra $410 billion over 10 years, which would add to the deficit.

By November, it wasn’t clear whether enough Republicans would vote for the bill. Arizona Representative Jeff Flake recalled a Republican caucus that month in the House Ways and Means Committee room of the Longworth House Office Building in Washington.

Louisiana Representative Billy Tauzin, one of the bill’s main backers who eventually left the House to head PhRMA, the pharmaceutical industries primary trade association, told the caucus a “conservative guru, or something to that effect,” was there to make the case, Flake said in a phone interview yesterday. Tauzin did not respond to requests for comment for this article.

‘Being Lobbied’

“In walked Newt Gingrich,” Flake said. “He was supposed to sway us because he was supposedly the ultimate conservative. We knew he had health-care clients. It seemed to all of us that we were being lobbied.”

Flake, who voted against the bill, supports Romney. Another Republican and Romney supporter, former Idaho Representative C.L. “Butch” Otter, also said he was “lobbied” by Gingrich.

Asked whether such meetings occurred, Gingrich campaign spokesman R.C. Hammond said in an e-mail yesterday, “The speaker of the House invited Newt to speak to the GOP.”

Hammond didn’t respond to questions about the attendance of Gingrich and his clients at the Bush bill-signing ceremony.

Seven months after Gingrich formed the Center for Health Transformation, the business said in its December 2003 newsletter it had 27 members, including Novo Nordisk and QMedtrix. Founding charter members included HealthTrio, Polycom, PricewaterhouseCoopers and Sutter Health, according to a 2003 archived web page of the Center for Health Transformation.

Center Members

The center won’t release a full list of its members, who paid between $20,000 and $200,000 a year. Still, Gingrich and the center mentioned many of them in speeches, testimony on Capitol Hill, newsletters and press releases.

At various points over the years, the drug-makers AstraZeneca Plc and Johnson & Johnson were members, as were the health insurers Humana Inc., WellPoint Inc. and the Blue Cross and Blue Shield Association. Pharmaceutical companies supported passage of the drug coverage expansion.

The center and its predecessor, the Gingrich Group LLC, grossed $55 million between 2001 and 2010, according to a statement they put out in November.

Romney in recent days has accused Gingrich of “influence peddling.” Gingrich has said he was acting as a public advocate, pushing for policy changes that he had long supported.

Paid by Companies

“Here’s why it’s a problem, Mr. Speaker,” Romney said during a Jan. 23 debate in Tampa. “If you’re getting paid by health companies, if your entities are getting paid by health companies that could benefit from a piece of legislation, and you then meet with Republican congressmen and encourage them to support that legislation, you can call it whatever you’d like. I call it influence-peddling. It is not right. It is not right. You have a conflict.”

Gingrich, who served as a Georgia congressman for 20 years, said he was sharing long-held beliefs about health care, not lobbying Congress.

“It is not correct to describe public citizenship, having public advocacy as lobbying,” Gingrich said during the Jan. 23 debate, after saying he has “always publicly favored a stronger Medicare program.”

The Center for Health Transformation didn’t recruit clients, said Anne Woodbury, who was vice president of health at the company when it was called the Gingrich Group. Rather, she said, they came to Gingrich because of his views on health care.

Coalition of People

“He’s pretty clear about where he stands,” Woodbury said in a phone interview yesterday. “The center was always a coalition of people that agreed with the visions we were painting.”

Those views were captured in a book, “Saving Lives & Saving Money,” that Gingrich wrote with Woodbury and another colleague. They published the book in 2003 after meeting with “our clients and other transformational thinkers and leaders to discuss the vision” for the direction of the center, according to an archived center history Internet page.

Several principle ideas from it were included in the Medicare prescription drug coverage expansion bill, according to the center’s December 2003 newsletter.

Sloan, the CREW ethics watchdog, said Gingrich’s commitment to the cause is beside the point.

“Just because you happen to believe in something doesn’t exempt you from lobbying rules,” Sloan said. “Doesn’t every lobbyist believe they’re speaking out for the public good?”

--With assistance from Kristin Jensen and Kate Andersen Brower in Washington. Editors: Jeanne Cummings, Jim Rubin.

To contact the reporter on this story: Julie Bykowicz in Washington at jbykowicz@bloomberg.net

To contact the editor responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net


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