(Updates with book sales in second paragraph under subhead ‘George Investments.’ For more campaign news, go to ELECT.)
Feb. 15 (Bloomberg) -- As he seeks the Republican presidential nomination, Newt Gingrich has become a de facto spokesman for Lean Six Sigma, a business management concept pioneered by a Dallas entrepreneur who has spent more than $200,000 of his own money to promote the former U.S. House speaker’s candidacy.
Gingrich has uttered the term “Lean Six Sigma” at least 28 times since August in campaign appearances, debates and media interviews, a review of transcripts and news accounts shows. At the same time, Mike George, the investor who has written six books on Lean Six Sigma, paid for mailings, handouts and automated phone calls backing Gingrich in the Iowa caucuses and South Carolina primary last month.
George’s financial support comes through a political action committee, Strong America Now, which he created and solely funds. The dynamic illustrates a new way for wealthy individuals to leverage the high visibility of a presidential election as a public-relations tool for a specific company, product or message.
“This goes beyond the concern about coordination, and smack dab into the concern of having a mutually profitable business relationship between a super-PAC and a presidential candidate,” said Craig Holman, a lobbyist with Public Citizen in Washington, a group that advocates for tighter regulation of political donations. “There’s Gingrich out there selling Mike George’s book while Mike George helps to promote Gingrich’s candidacy. That’s kind of amazing.”
Super-PACs can raise and spend unlimited amounts of money, including corporate cash, on campaign activity. The committees can’t coordinate with candidates.
R.C. Hammond, a Gingrich spokesman, said he isn’t concerned about the perception that George’s spending is influencing Gingrich’s speech content.
“I don’t worry about that any more than I worry about Goldman Sachs giving to Mitt Romney,” he said, referring to one of Gingrich’s rivals in the Republican race. “Gingrich is the only candidate who can communicate the message” of using Lean Six Sigma to reduce government waste, he said. “He’s the only candidate with independent thought.”
George, 72, said he’s not profiting from Gingrich’s promotion of his philosophy. “I’ve got enough money. I don’t need anything. I’m involved because I have wonderful experience that I’d like to share with the nation,” he said in an interview.
George said he intends to spend more money supporting Gingrich.
Lean Six Sigma
The Lean Six Sigma program is intended to train managers to identify and eliminate inefficiencies. The U.S. Army used the system and wound up saving millions of dollars by consolidating contracts for wireless handheld devices, computer hardware and software licensing, according to a Nov. 5, 2007, Federal Times article.
Gingrich, 68, has talked about using Lean Six Sigma to reduce government waste in at least six debates. He included the principle in his “New Contract with America,” unveiled Sept. 29 in Des Moines, where he recognized George, who was present, as “terrific” and “an example of why America is a unique country.”
Two days later, George filed paperwork with the Federal Election Commission to create the pro-Gingrich super-PAC to work in tandem with a nonprofit group also named Strong American Now that draws attention to the national deficit.
Asset to Campaign
“Strong America Now obviously is an asset to the Gingrich campaign, and it’s a mutually beneficial relationship,” said Sheila Krumholz, executive director of the Center for Responsive Politics based in Washington, which tracks political giving.
Strong America Now made its first independent expenditure on Dec. 21, spending about $40,552 for a mailer supporting Gingrich, according to FEC disclosure reports. On newsstands that week was a Newsweek cover story on Gingrich in which he discussed Lean Six Sigma.
“Mike George has been very heroic as a citizen,” Gingrich told a group gathered Dec. 27 at a golf club in Dubuque, Iowa. “He took his own money, which he made as a management consultant, and he helped create Strong America Now, and I’m a big fan of that model.”
Gingrich didn’t mention that Strong America Now had created its super-PAC supporting him -- and that it had financed on that same day $38,967 worth of pro-Gingrich mailers, FEC reports show.
“Behind Gingrich’s leadership America will usher in an era of economic renewal and restore the American Dream,” one direct mail piece said.
CPAC Speech Pitch
The George management philosophy peppered Gingrich’s Feb. 10 speech to the Conservative Political Action Conference in Washington.
“We should replace the 130-year-old civil service system and regulation with a new model of modern management, using systems like Lean Six Sigma,” Gingrich said.
According to Hammond, Gingrich learned of the management theory while serving in Congress in the 1990s. “What Gingrich is arguing is that if you retrain the bureaucracy and managers in that bureaucracy to streamline and make more efficient their processes, you spend less money,” he said.
Shawn J. Parry-Giles, director of the Center for Political Communication and Civic Leadership at the University of Maryland, said she doubts Gingrich is attracting voters by talking about Lean Six Sigma.
Not Voter Messaging
“Most people don’t have a clue what that means,” she said in an interview. “That kind of jargon doesn’t have any utility in helping someone decide how to vote.”
She said the issue of government waste also is “abstract,” and “seems impersonal at a time when people want a candidate who will make the economy better so that we have jobs.”
When Strong America Now was operating only as a nonprofit organization, its main mission was to secure pledges from all of the presidential candidates that they would use Lean Six Sigma principles to reduce the deficit. “Pledged” candidates commit to attending a two-day Lean Six Sigma training seminar before inauguration day and ending the deficit by 2017.
Gingrich was the first candidate to sign, June 8 at an event in New Hampshire. Others, including former Pennsylvania Senator Rick Santorum and U.S. Representative Ron Paul of Texas, followed.
Romney Snubs Pledge
Romney, who as co-founder of Bain Capital LLC and head of the 2002 Olympics in Salt Lake City has the most business experience of the candidates, didn’t sign the pledge. George said that Romney’s refusal prompted him to put his money behind Gingrich, who last fall was running higher in public opinion polls than Santorum or Paul.
One of Strong America Now’s direct mail pieces criticized Romney for not signing the pledge, and said the former Massachusetts governor’s proposals come “nowhere close to eliminating the federal deficit -- at any point.”
If Romney “would sign, I’d kill the super-PAC tomorrow,” George said.
Democratic President Barack Obama also hasn’t signed the pledge, though George said he’s asked a mutual friend to put the request to the re-election campaign.
Romney supporter Ron Pearson, the former chief executive officer for the Hy-Vee grocery store chain based in West Des Moines, Iowa, said the candidate already has the experience needed to trim government spending. “Governor Romney knows more about how to root out waste and inefficiency than probably any candidate for president in the modern era,” Pearson told the Des Moines Register on Dec. 14.
George applies the Lean Six Sigma principles when his investment firm, Filoli Capital LLC, buys companies. In 2007, he sold his consulting company -- which popularized Lean Six Sigma -- to Accenture Plc, where his son is vice-president. Under the terms of that deal, George may not form another consulting firm to promote Lean Six Sigma until August 2013, he said.
Also under the terms of the deal, royalties from the six books George has written -- which have sold more than 1 million copies in nine languages -- go to Accenture, George said in an e-mail today.
He said he “can see why” it might appear that he could benefit financially from Gingrich’s touting of the principle on the campaign trail.
“I am applying all of my energy to private investments, and Newt can’t help me with those at all,” he said. “If I went ahead and started a consulting business, maybe I could benefit, but I have no intention of doing that.”
Holman of Public Citizen said the mere appearance of a “business enterprise” within a presidential campaign is “troubling.”
“This is the first time I’ve seen anything like this,” he said. “I could easily see it catching on: You tout my book, and I’ll provide you with a portion of my proceeds.”
--Editors: Jeanne Cummings, Don Frederick
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