The once high-flying health-care think tank that Republican presidential hopeful Newt Gingrich started nearly a decade ago has filed for bankruptcy, its fortunes having sunk rapidly last year as its compelling leader turned his energies to the political campaign trail.
The Center for Health Transformation had promoted private-sector solutions to America’s skyrocketing health-care costs. It also became a source of significant cash for Gingrich and his wife, Callista. The Washington Post reported that the center took in $37 million in donations, primarily from big pharmaceutical and health-care corporations, in its eight years in business.
The center had advertised Gingrich as its primary asset, and dues-paying companies such as Astra Zeneca and Blue Cross Blue Shield were offered direct access to the former House speaker and his strategic advice. But when Gingrich announced his plans to run for president last summer, he sold his ownership interest in the group and had to give up his role as chief fundraiser for the center.
“The Center for Health Transformation was a complex and ambitious project to promote free-market consumer-driven solutions for better care of the highest quality with the most choices at the lowest costs,” Rick Tyler, Gingrich’s longtime spokesman and leader of a pro-Gingrich political action committee, said in an e-mail. “There are very few people capable of successfully leading such an organization. It’s unfortunate, but not surprising, that without Newt Gingrich’s leadership, the organization failed.”
The center’s demise is another sign of the collective hit that Gingrich’s power base and financial empire has taken as a result of his decision to seek the presidential nomination. Gingrich’s record-setting political action group, American Solutions, also shut down in July 2011 because his candidacy made it impossible for him to raise funds for the group.
Those inside Gingrich’s health-care think tank had foreseen its downward trajectory, with employees departing en masse around the time Gingrich publicly announced his candidacy last year.
The organization’s petition for Chapter 7 bankruptcy, filed Wednesday in federal court in Atlanta, shows that the center estimates it owes from $1 million to $10 million but has only as much as $100,000 in assets.
The petition says the center has between 50 and 99 creditors. It lists among them the swank Ritz Carlton and St. Regis hotels in Atlanta, Moby Dick Airways and Gingrich Productions, a film production group run by Callista Gingrich. A lawyer who submitted the bankruptcy filings for the center, George Geeslin, declined to answer questions or comment on the case.
Gingrich has been trailing behind his GOP colleagues in the race for the Republican nomination, finishing fourth in this week’s Wisconsin primary. For the past four months, his campaign also has been struggling financially because donations have fallen off while expenses have continued to rack up.
In its most recent filing, Gingrich’s campaign reported it had begun bleeding into the red: $1.6 million in debt at the end of February, compared with $1.5 million it held in the bank. But Gingrich campaign spokesman R.C. Hammond said the candidate would stay in the race all the way to the Republican convention.