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Is Newt Gingrich a conservative firebrand who can take the fight to Obama? Or just more Washington same-old, same-old?
Put Rep. Michele Bachmann, R-Minn., down for the second option. She laid into him at a Republican debate for the presidential nomination for his work with Freddie Mac, a mortgage company giant connected to the federal government.
"Well, it's the fact that we know that he cashed paychecks from Freddie Mac. That's the best evidence that you can have, over $1.6 million," Bachmann said on Dec. 15, 2011, in Iowa. She added, "We can't have as our nominee for the Republican Party someone who continues to stand for Freddie Mac and Fannie Mae. They need to be shut down, not built up."
When asked for his response, Gingrich, the former speaker of the U.S. House of Representatives, said, "Well, the easiest answer is, that's just not true. What she just said is factually not true. I never lobbied under any circumstance. I never went in and suggested in any way that we do this."
The conversation got weird after that, with Bachmann claiming that "after the debates that we had last week, PolitiFact came out and said that everything that I said was true." That’s not true, and we gave her a Pants on Fire for saying it.
Gingrich, meanwhile, said his policy now is to break up both Freddie Mac and Fannie Mae. He also claimed that he was too well off to sell influence: "I want to state unequivocally, for every person watching tonight, I have never once changed my positions because of any kind of payment, because the truth is, I was a national figure who was doing just fine, doing a whole variety of things, including writing best-selling books, making speeches."
Here, we decided to examine Gingrich’s statement, "I never lobbied under any circumstance."
Our research showed that Gingrich is technically correct: If you search public records databases for registered lobbyists, you won’t find Gingrich’s name.
But his statement doesn’t tell the whole story.
To be clear, Gingrich acknowledges that he worked for Freddie Mac, and his campaign released a statement affirming that Nov. 6, 2011.
The statement, which you can read in full, said that Gingrich’s consulting group was retained by Freddie Mac in 2006. "To be clear, Speaker Gingrich did no lobbying of any kind, nor did his firm. This was expressly written into the Gingrich Group contracts. Instead, the Gingrich Group was hired to offer strategic advice to Freddie Mac on a number of issues," the statement said.
The statement said Gingrich advised Freddie that it was dangerous to buy mortgage-backed securities based on questionable home loans. He also told Freddie on how to lower prescription drug costs for its employees. Finally, Freddie Mac "was interested in advice on how to reach out to more conservatives."
Because he was not a registered lobbyist, neither Freddie Mac nor Gingrich is required to disclose how much Gingrich was paid nor the exact dates of his work. Bachmann said it was $1.6 million. This number likely came from news stories from Bloomberg News, which reported last month that Gingrich received between $1.6 million and $1.8 million in fees from two separate contracts. We've seen nothing questioning the accuracy of that report, but the number also came from unnamed sources, so we can’t confirm or refute the number Bachmann mentioned.
Bloomberg also reported that Gingrich worked with Mitchell Delk, Freddie's chief lobbyist. Delk told Bloomberg that Gingrich provided "counsel on public policy issues," but did not do formal lobbying work.
So Gingrich was paid for "strategic advice" without having to register as a lobbyist. How does that work?
To be a registered lobbyist, one has to meet a number of detailed rules laid out in federal law. One of the main rules is that a person has to register if he or she holds two or more meetings with elected officials or staff in any quarter of the year n behalf of a client. Also, the lobbying activities must constitute 20 percent or more of the lobbyist’s time during any three-month period. (Want more detail? Read 27 pages of guidance on disclosing lobbying activities via the U.S. Senate website.)
Experts we spoke with and the research we reviewed showed the "strategic advice" category is a way of using influence without having to register as a lobbyist.
They said strategic advisers can do quite a bit for clients like Freddie Mac without acquiring the lobbyist label. They can stay at the client’s office and give their best advice on with whom to meet and what to say. They can give instructions to someone who is a registered lobbyist, again telling the lobbyist with whom to meet and what points to address. They can take their clients to meetings with groups that aren’t part of the government, such as grassroots political groups. They can even have one big meeting with an elected official to make a case for a client.
"There’s a lot of activity that ordinary people would think of as lobbying that doesn’t trigger the obligation to register as a lobbyist under federal law. Strategic advice is one of those kinds of things that doesn’t," said Joseph Sandler, an attorney with the Washington law firm Sandler Reiff Young & Lamb.
Sandler was one of four co-chairs of an American Bar Association task force that recommended changes to federal lobbying laws to improve disclosure and reduce conflicts of interest. One of its recommendations was that people who give strategic advice disclose their work under a new category of "lobbying support."
We should also note that both parties play this game. Former U.S. Sen. Tom Daschle, D-S.D., was a "policy adviser" at the lobbying firms Alston & Bird and DLA Piper. He had to answer many questions about his work when President Barack Obama selected him to be U.S. Secretary of Health and Human Services. (Daschle ended up withdrawing over tax issues connected to another client giving him the use of a car and driver.)
"Newt Gingrich is certainly not alone among well-heeled political players who say they just offer consulting services or strategic advice -- without needing to register as lobbyists. But it's a stretch to claim that they aren't part of the influence game," said Michael Beckel, a spokesman with the Center for Responsive Politics, via e-mail. The nonpartisan group monitors lobbying and campaign spending.
"The distinction isn't as important as Gingrich is making it out to be," he added.
Gingrich is technically correct that he was not a registered lobbyist for Freddie Mac. But it appears he took pains to avoid being subject to the rules. Giving strategic advice is widely considered a way of using political influence without having to register. We rate his statement Half True.
Newt 2012, The Truth About Newt’s Relationship with Freddie Mac, Nov. 9, 2011
America Bar Association, Report on the Task Force on Federal Lobbying Laws Section of Administrative Law and Regulatory Practice, Jan. 3, 2011
U.S. Senate, Lobbying Disclosure Act Guidance, updated Dec. 15, 2011
Interview with Joseph Sandler of Sandler, Reiff, Young & Lamb
Interview with Michael Beckel of the Center for Responsive Politics
Bloomberg News, Gingrich Said to Be Paid About $1.6 Million by Freddie Mac, Nov. 16, 2011
The Washington Post, The Fact Checker: Newt Gingrich and Freddie Mac: Is he being misleading?, Nov. 17, 2011
The Washington Post, Gingrich case raises question: What is a lobbyist?, Dec. 7, 2011
Reuters, All of Washington lives in Newt’s swamp, opinion by by Jack Abramoff, Nov. 21, 2011
POLITICO, Lobbyists call bluff on 'Daschle exemption', July 26, 2010
Time magazine, Daschle's Problems: When Is a Lobbyist Not a Lobbyist?, Feb. 3, 2009
The Associated Press, Daschle withdraws as nominee for HHS secretary, Feb. 23, 2009
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