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  • Key Stories: The GOP Leadership Fight

  •   'Newt Inc.' Faces Uncertain Fate

    By Thomas B. Edsall
    Washington Post Staff Writer
    Thursday, November 19, 1998; Page A33

    When Rep. Newt Gingrich (R-Ga.) became House speaker four years ago, former representative Vin Weber hit the jackpot. Known by many in Washington as the speaker's best friend, the new lobbyist saw blue-chip clients lining up at his door -- AT&T, Microsoft, Capitol Broadcasting, New York Life and Metropolitan Life.

    But with Gingrich stepping down, Weber is not sure what his status will be when the smoke clears, even though he considers Speaker-designate Bob Livingston (R-La.) a friend. "There is no question I've been identified with Newt, and I expect people will question that," said Weber.

    Uncertainty is the shared fate of Weber and other members of what's become known in Washington as "Newt Inc." -- a diverse network of lobbyists, corporations, interest groups and strategists that gained power, influence and favored position through their connection with the outgoing speaker.

    In some ways, theirs is a classic Washington tale of how fortunes can rise and fall with a powerful patron. But the breakup of Newt Inc. also represents a body blow to Gingrich's own soaring ambitions to institutionalize the conservative revolution he helped usher in four years ago. In addition to taking care of his congressional duties, Gingrich built right-leaning institutions and organizations and helped empower coalitions of activists, donors and political consultants.

    "He is the only one who really wanted to put together a Republican majority," said John Morgan, a GOP grass-roots political strategist. "He knew what we needed to do, that you need ideas, but if you don't do the blocking and tackling, you don't get anyone elected."

    Gingrich-inspired institutions included GOPAC, the political action committee that nurtured a whole generation of Republican candidates, and the Progress and Freedom Foundation, which financed the promotion of the Gingrich message of "Renewing American Civilization." His political allies included Joe Gaylord, a back-room strategist, and Grover Norquist, who struggled to build a "leave us alone" coalition of anti-tax, pro-gun, antiabortion and anti-regulation activists.

    Norquist also built a thriving lobbying practice that represents Microsoft, the government of the Seychelles, the American Immigration Lawyers Association and BP America.

    Other lobbyists who shared the fruits of Gingrich's victories included former representative Robert Walker, who was hired to become president of The Wexler Group after his retirement, and former Gingrich chief of staff Daniel P. Meyer, hired as a vice president of The Duberstein Group.

    Gingrich allies played down any personal fallout from the speaker's resignation. Walker said he and Gingrich are "like blood brothers," but added: "That doesn't mean that I don't have any other friends, and Bob Livingston is one of the better ones."

    Norquist noted: "I work with the entire [conservative] movement and know everybody in the Republican leadership, and work with them all."

    Still, in his unique governing style -- and by concentrating power over committees and the legislative agenda in his own hands -- Gingrich had unusual power to take care of his own. He provided protective cover for pet causes such as Lockheed's controversial C-130 aircraft program in Georgia and for favored backers such as Golden Rule Insurance Co. He also helped initiate reforms of the Food and Drug Administration beneficial to major donors from the pharmaceutical industry.

    Some of the components of Newt Inc. were already weakened even before his resignation. Both GOPAC and the Progress and Freedom Foundation had been damaged during the highly publicized ethics investigation into Gingrich's activities. The foundation, according to president Jeffrey Eisenach, was almost driven into bankruptcy, and is now operating in the black with its own separate agenda and with Gingrich keeping his distance from the group.

    "The ethics thing was very hard on us," Eisenach said. "There was a time period in late '96 when we were right at ground zero. It was touch-and-go."

    GOPAC continues to operate with a $2 million annual budget and may actually benefit from the possibility that Gingrich may now get more involved again, said executive director Rich Galen. But the group has lost the cutting-edge quality that put it in the forefront of the rise of the right during the 1980s.

    Gaylord, who has always remained in the background, declined to reply to inquiries about his status, according to an aide. Gaylord has been blamed, along with Gingrich, for engineering the Republican ads that sought to focus public attention on the Clinton-Lewinsky scandal, only to backfire against the GOP in the congressional elections this month. "Joe is not in good shape," an associate said.

    Another lesser known but influential group, the Wall Street-based Political Club for Growth made up of wealthy investors seeking tax cuts, will lose a direct line into the speaker's office. Although the group's relations with Gingrich had been strained at times, Richard Gilder and other club members were major backers of GOPAC. Gilder declined to return phone calls.

    Perhaps the most endangered part of Newt Inc. is the C-130 plane built in Gingrich's home district near Atlanta. Year after year, the Pentagon has tried to cut back or eliminate production of the transport aircraft, only to face a hostile House run by a man determined to keep the production line open.

    With Gingrich in office, Defense Secretary William S. Cohen's complaints about the plane fell on deaf congressional ears. Cohen described the congressionally required spending on the C-130s as "particularly troubling" because it undermines dozens of programs designed to meet "our nation's most pressing requirements."

    Now, however, prospects for the C-130 have changed. "If you were able to buy futures or sell short the C-130, all the smart money in Washington would be betting on a bleak future," a defense lobbyist commented.

    Lockheed is putting a brave face on the prospect of change. "We obviously have a lot of respect for the speaker [Gingrich]," said Charles Manor, a Lockheed spokesman. "But we have also known Congressman Livingston for a long time. He has been a strong supporter of national security issues and modernizing the armed forces. We have a high level of comfort with soon-to-be Speaker Livingston."

    While the Gingrich resignation set in motion calculations of self-interest, many of those closely aligned with the Georgia lawmaker voiced a different kind of loss that comes at the end of a roller-coaster ride to power.

    "It was almost hard to believe," Weber said. "We talked about it for so long, but to actually have it occur was something that very few people other than Newt were really prepared for."

    © Copyright 1998 The Washington Post Company

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