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Newt Loot

Where there's backroom smoke ...

By Bob Harris

IN ACCEPTING $300,000 from Bob Dole to pay off his ethics violation fines, Newt Gingrich claims he took the high ground. If enough folks examine the deal closely, he may have to head for the hills.

House rules allow loans only on terms "generally available to the public." That includes me, so I called five banks and asked for $300K unsecured at 10 percent with no payments for eight years. They thought I was nuts. When I profiled Newt's income and net worth, all five still said no chance. (The best I found for him was only $25K, monthly payments, 10 years, 13.9 percent.)

On its face, this deal's a bigger con than Speed 2.

Loans to congressmen must also come from a financial institution--which Dole isn't, although he's older than most--unless originating from a friend with no interest in buying influence.

That explains why both Dole and Gingrich, who notoriously don't like each other, took such pains to proclaim themselves "close personal friends" in various statements. That's their Ethics Committee loophole.

OK, so Dole and Gingrich are pals. Just like Tiger Woods and Fuzzy Zoeller. But does Dole really have no interest in buying influence? Dole's new day gig is "special counsel" for Verner, Liipfert, one of the biggest and most active lobbying firms in Washington. In February, the five tobacco monsters--Philip Morris, RJR, Brown & Williamson, UST, and Loews--retained Verner, Liipfert to lobby Congress.

The cancer kings are in major trouble: 15 class-action suits, 23 states suing for billions in Medicaid expenses, and now teeny Liggett fessing up that cigarettes are marketed to kids. However, Liggett has also shown the bad guys a way out: admitting guilt and paying a fine, in exchange for immunity from future liability. Since potential lawsuits reach over a trillion dollars, the barons of broadleaf need immunity so badly that they're willing to put their ads, their trademarks, $300 billion in fines, and FDA status as a drug on the bargaining table.

On April 3, after weeks of organizing, backroom negotiations began. The first meeting included four attorneys general, two stogie moguls, a bunch of trial lawyers--and Verner, Liipfert. Info on the meetings is scarce. However, any agreement they reach will have to be voted on by Congress. That puts Mr. Speaker at the head of the tobacco lobby's kiss-up list.

And he badly needs $300,000. Gee, what to do, what to do.

Who thought up the loan? "Dole just came up with it himself," said Charles Black, an "adviser to Dole" who did most of the talking. A curious spinmeister: Black is a lobbyist whose biggest account last year was Philip Morris. (Dole and tobacco go way back, having opposed FDA actions to curb tobacco sales and marketing.)

When did the loan idea originate? Dole's spokeswoman termed it "last-minute" and "completely unexpected." But most GOP sources say Dole first broached the loan with Scott Reed, an actual friend of Newt, sometime near the first of April--just as tobacco liability talks began. Reed spoke to another go-between, and then Gingrich. (This is how "close personal friends" usually talk.)

When did Newt accept the loan? His people pinpoint the evening of the April 16--apparently trophy wife Marianne give the pants-wearing thumbs-up--but Newt's signature is on an agreement dated the 15th. Reed contacted Gingrich at least a week earlier. No one is being very specific about dates. It's not clear when Newt verbally agreed, but Dole wouldn't have called on the 15th if Newt hadn't expressed interest.

We do know that on April 9, Verner, Liipfert hired Bob Dole.

The non-partisan National Journal's "CongressDaily" reports that Dole received a signing bonus of--coincidentally enough--$300,000. (The paper's source is a partner at Verner, Liipfert.)

That's just how much Dole fronted Gingrich six days later.

Curious? The major papers aren't; only Mother Jones noted the "CongressDaily" report in an article on its Web site. The Ethics Committee won't care; the chairman is Utah's James Hansen, a conservative Republican. Slam dunk. Dole denies that Verner, Liipfert had knowledge of the Gingrich loan; reportedly, most folks at the firm were embarrassed by the appearance of impropriety. You can see why: Verner, Liipfert works for tobacco. So does Dole, who now also works for Verner, Liipfert. Verner, Liipfert wants liability limits passed. During negotiations, they gave Dole $300K, just as Dole was offering the bailout to Newt. Dole put $300K in Newt's hand six days later. Now let's see just how hard Newt works to pass the impending liability deal.

The high ground smells a lot like a tobacco field.

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From the May 8-14, 1997 issue of the Sonoma County Independent

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