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                                                   House Calendar No. 1
105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                      105-1
_______________________________________________________________________


 
     IN THE MATTER OF REPRESENTATIVE NEWT GINGRICH--pages 1 to 128


                               ----------                              

                              R E P O R T

                                 of the

                       SELECT COMMITTEE ON ETHICS

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


  January 17, 1997.--Referred to the House Calendar and ordered to be 
                                printed



              IN THE MATTER OF REPRESENTATIVE NEWT GINGRICH



                                                   House Calendar No. 1
105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                      105-1
_______________________________________________________________________



                            IN THE MATTER OF
                      REPRESENTATIVE NEWT GINGRICH

                               __________

                              R E P O R T

                                 of the

                       SELECT COMMITTEE ON ETHICS

<GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT>


  January 17, 1997.--Referred to the House Calendar and ordered to be 
                                printed


                         LETTER OF TRANSMITTAL

                              ----------                              

                             Congress of the United States,
                                  Washington, DC, January 17, 1997.
Hon. Robin Carle,
Clerk, House of Representatives,
Washington, DC.
    Dear Madam Clerk: Pursuant to clause 4(e)(3) of Rule 10, 
and by direction of the Select Committee on Ethics, I herewith 
submit the attached report, ``In the Matter of Representative 
Newt Gingrich.''
            Sincerely,
                                          Nancy L. Johnson,
                                                          Chairman.


                            C O N T E N T S

                              ----------                              
                                                                   Page
  I. Introduction.....................................................1
        A. Procedural Background.................................     1
        B. Investigative Process.................................     3
        C. Summary of the Subcommittee's Factual Findings........     4
            1. AOW/ACTV..........................................     4
            2. Renewing American Civilization....................     5
            3. Failure to Seek Legal Advice......................     7
            4. Mr. Gingrich's Statements to the Committee........     8
        D. Statement of Alleged Violation........................     9
 II. Summary of Facts Pertaining to American Citizens Television......9
        A. GOPAC.................................................     9
        B. American Opportunities Workshop/American Citizens 
            Television...........................................    11
            1. Background........................................    11
            2. Planning and Purpose for AOW/ACTV.................    13
            3. Letters Describing Partisan, Political Nature of 
                AOW/ACTV.........................................    16
            4. AOW/ACTV in Mr. Gingrich's Congressional District.    18
            5. GOPAC's Connection to ALOF and ACTV...............    19
            6. GOPAC Funding of ALOF and ACTV....................    20
III. Summary of Facts Pertaining to ``Renewing American Civilization'22
        A. Genesis of the Renewing American Civilization Movement 
            and Course...........................................    22
        B. Role of the Course in the Movement....................    24
        C. GOPAC and Renewing American Civilization..............    30
            1. GOPAC's Adoption of the Renewing American 
                Civilization Theme...............................    30
            2. GOPAC'S Inability To Fund Its Political Projects 
                in 1992 and 1993.................................    31
            3. GOPAC's Involvement in the Development, Funding, 
                and Management of the Renewing American 
                Civilization Course..............................    32
                a. GOPAC Personnel...............................    32
                b. Involvement of GOPAC Charter Members in Course 
                    Design.......................................    35
                c. Letters sent by GOPAC.........................    35
        D. ``Replacing the Welfare State with an Opportunity 
            Society'' as a Political Tool........................    38
        E. Renewing American Civilization House Working Group....    44
        F. Marketing of the Course...............................    46
        G. Kennesaw State College's Role in the Course...........    51
        H. Reinhardt College's Role in the Course................    53
        I. End of Renewing American Civilization Course..........    55
 IV. Ethics Committee Approval of Course.............................55
  V. Legal Advice Sought and Received................................58
 VI. Summary of the Report of the Subcommittee's Expert..............63
        A. Introduction..........................................    63
        B. Qualifications of the Subcommittee's Expert...........    63
        C. Summary of the Expert's Conclusions...................    64
            1. The American Citizens Television Program..........    65
                a. Private Benefit Prohibition...................    65
                b. Campaign Intervention Prohibition.............    66
            2. The Renewing American Civilization Course.........    67
                a. Private Benefit Prohibition...................    67
                b. Campaign Intervention Prohibition.............    69
        D. Advice Ms. Roady Would Have Given.....................    70
VII. Summary of Conclusions of Mr. Gingrich's Tax Counsel............70
        A. Introduction..........................................    70
        B. Qualifications of Mr. Gingrich's Tax Counsel..........    70
        C. Summary of Conclusions of Mr. Gingrich's Tax Counsel..    71
            1. Private Benefit Prohibition.......................    72
            2. Campaign Intervention Prohibition.................    75
        D. Advice Mr. Holden Would Have Given....................    76
VIII.Summary of Facts Pertaining to Statements Made to the Committee.77

        A. Background............................................    77
        B. Statements Made by Mr. Gingrich to the Committee, 
            Directly or Through Counsel..........................    78
            1. Mr. Gingrich's December 8, 1994 Letter to the 
                Committee........................................    78
            2. March 27, 1995 Letter of Mr. Gingrich's Attorney 
                to the Committee.................................    79
        C. Subcommittee's Inquiry Into Statements Made to the 
            Committee............................................    80
        D. Creation of the December 8, 1994 and March 27, 1995 
            Letters..............................................    81
            1. Creation of the December 8, 1994 Letter...........    82
            2. Bases for Statements in the December 8, 1994 
                Letter...........................................    85
            3. Creation of the March 27, 1995 Letter.............    87
            4. Bases for Statements in the March 27, 1995 Letter.    89
 IX. Analysis and Conclusion.........................................89
        A. Tax Issues............................................    89
        B. Statements Made to the Committee......................    90
        C. Statement of Alleged Violation........................    91
            1. Deliberations on the Tax Counts...................    92
            2. Deliberations Concerning the Letters..............    92
            3. Discussions with Mr. Gingrich's Counsel and 
                Recommended Sanctions............................    93
        D. Post-December 21, 1996 Activity.......................    96
  X. Summary of Facts Pertaining to Use of Unofficial Resources......96
 XI. Availability of Documents to Internal Revenue Service...........97
Appendix.........................................................    99

                           Index to Appendix
 Summary of Law Pertaining to Organizations Exempt From Federal Income 
        Tax Under Section 501(c)(3) of the Internal Revenue Code

A. Introduction..................................................    99
B. The Organizational Test and the Operational Test..............    99
    1. Organizational Test.......................................    99
    2. Operational Test..........................................   100
        a. ``Educational'' Organizations May Qualify for 
            Exemption Under Section 501(c)(3)....................   101
        b. To Satisfy the Operational Test, an Organization Must 
            Not Violate the ``Private Benefit'' Prohibition......   102
        c. To Satisfy the Operational Test, an Organization Must 
            Not Be an ``Action'' Organization....................   110
            (i) If an Organization Participates in a Political 
                Campaign, It Is an Action Organization Not 
                Entitled to Exemption Under Section 501(c)(3)....   110
                (a) The Prohibition is ``Absolute''..............   113
                (b) Section 501(c)(3) Organizations May Not 
                    Establish or Support a PAC...................   115
                (c) ``Express Advocacy'' Is Not Required, and 
                    Issue Advocacy Is Prohibited if Used To 
                    Convey Support for or Opposition to a 
                    Candidate....................................   115
                (d) Educational Activities May Constitute 
                    Participation or Intervention................   116
                (e) Nonpartisan Activities May Constitute 
                    Prohibited Political Campaign Participation..   118
                (f) The IRS Has Found Violations of the 
                    Prohibition on Political Campaign 
                    Participation When an Activity Could Affect 
                    or Was Intended To Affect Voters' Preferences   118
            (ii) If a Substantial Part of an Organization's 
                Activities Is Attempting To Influence 
                Legislation, or Its Primary Goal Can Only Be 
                Accomplished Through Legislation, It Is an 
                ``Action'' Organization..........................   121
                (a) Definition of ``Legislation''................   122
                (b) Definition of ``Attempting To Influence 
                    Legislation''................................   122
                (c) Definition of ``Substantial''................   124
                (d) Circumstances Under Which an Organization's 
                    ``objectives can be achieved only through the 
                    passage of legislation''.....................   125
        d. To Satisfy the Operational Test, an Organization Must 
            Not Violate the ``Private Inurement'' Prohibition....   126
Exhibits.........................................................   129



                                                   House Calendar No. 1
105th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                      105-1
_______________________________________________________________________



             IN THE MATTER OF REPRESENTATIVE NEWT GINGRICH

                                _______
                                

  January 17, 1997.--Referred to the House Calendar and ordered to be 
                                printed

_______________________________________________________________________


    Mrs. Johnson from the Select Committee on Ethics, submitted the 
                               following

                              R E P O R T

                            I. Introduction

                        A. Procedural Background

     On September 7, 1994, a complaint was filed with the 
Committee on Standards of Official Conduct (``Committee'') 
against Representative Newt Gingrich by Ben Jones, Mr. 
Gingrich's opponent in his 1994 campaign for re-election. The 
complaint centered on a course taught by Mr. Gingrich called 
``Renewing American Civilization.'' Among other things, the 
complaint alleged that Mr. Gingrich had used his congressional 
staff to work on the course in violation of House Rules. The 
complaint also alleged that Mr. Gingrich had created a college 
course under the sponsorship of 501(c)(3) organizations in 
order ``to meet certain political, not educational, 
objectives'' and, therefore, caused a violation of section 
501(c)(3) of the Internal Revenue Code to occur. In partial 
support of the allegation that the course was a partisan, 
political project, the complaint alleged that the course was 
under the control of GOPAC, a political action committee of 
which Mr. Gingrich was the General Chairman.
     Mr. Gingrich responded to this complaint in letters dated 
October 4, 1994, and December 8, 1994, but the matter was not 
resolved before the end of the 103rd Congress. On January 26, 
1995, Representative David Bonior filed an amended version of 
the complaint originally filed by Mr. Jones. It restated the 
allegations concerning the misuse of tax-exempt organizations 
and contained additional allegations. Mr. Gingrich responded to 
that complaint in a letter from his counsel dated March 27, 
1995.
     On December 6, 1995, the Committee voted to initiate a 
Preliminary Inquiry into the allegations concerning the misuse 
of tax-exempt organizations. The Committee appointed an 
Investigative Subcommittee (``Subcommittee'') and instructed it 
to: determine if there is reason to believe that Representative 
Gingrich's activities in relation to the college course 
``Renewing American Civilization'' were in violation of section 
501(c)(3) or whether any foundation qualified under section 
501(c)(3), with respect to the course, violated its status with 
the knowledge and approval of Representative Gingrich * * *.
    The Committee also resolved to appoint a Special Counsel to 
assist in the Preliminary Inquiry. On December 22, 1995, the 
Committee appointed James M. Cole, a partner in the law firm of 
Bryan Cave LLP, as the Special Counsel. Mr. Cole's contract was 
signed January 3, 1996, and he began his work.
    On September 26, 1996, the Subcommittee announced that, in 
light of certain facts discovered during the Preliminary 
Inquiry, the investigation was being expanded to include the 
following additional areas:
    (1) Whether Representative Gingrich provided accurate, 
reliable, and complete information concerning the course 
entitled ``Renewing American Civilization,'' GOPAC's 
relationship to the course entitled ``Renewing American 
Civilization,'' or the Progress and Freedom Foundation in the 
course of communicating with the Committee, directly or through 
counsel (House Rule 43, Cl. 1);
    (2) Whether Representative Gingrich's relationship with the 
Progress and Freedom Foundation, including but not limited to 
his involvement with the course entitled ``Renewing American 
Civilization,'' violated the foundation's status under 
501(c)(3) of the Internal Revenue Code and related regulations 
(House Rule 43, Cl. 1);
    (3) Whether Representative Gingrich's use of the personnel 
and facilities of the Progress and Freedom Foundation 
constituted a use of unofficial resources for official purposes 
(House Rule 45); and
    (4) Whether Representative Gingrich's activities on behalf 
of the Abraham Lincoln Opportunity Foundation violated its 
status under 501(c)(3) of the Internal Revenue Code and related 
regulations or whether the Abraham Lincoln Opportunity 
Foundation violated its status with the knowledge and approval 
of Representative Gingrich (House Rule 43, Cl. 1).
    As discussed below, the Subcommittee issued a Statement of 
Alleged Violation with respect to the initial allegation 
pertaining to Renewing American Civilization and also with 
respect to items 1 and 4 above. The Subcommittee did not find 
any violations of House Rules in regard to the issues set forth 
in items 2 and 3 above. The Subcommittee, however, decided to 
recommend that the full Committee make available to the IRS 
documents produced during the Preliminary Inquiry for use in 
its ongoing inquiries of 501(c)(3) organizations. In regard to 
item 3 above, the Subcommittee decided to issue some advice to 
Members concerning the proper use of outside consultants for 
official purposes.
    On January 7, 1997, the House conveyed the matter of 
Representative Newt Gingrich to the Select Committee on Ethics 
by its adoption of clause 4(e)(3) of rule X, as contained in 
House Resolution 5.
    On January 17, 1997, the Select Committee on Ethics held a 
sanction hearing in the matter pursuant to committee rule 20. 
Following the sanction hearing, the Select Committee ordered a 
report to the House, by a roll call vote of 7-1, recommending 
that Representative Gingrich be reprimanded and ordered to 
reimburse the House for some of the costs of the investigation 
in the amount of $300,000. The following Members voted aye: 
Mrs. Johnson of Connecticut, Mr. Goss, Mr. Schiff, Mr. Cardin, 
Ms. Pelosi, Mr. Borski, and Mr. Sawyer. The following Member 
voted no: Mr. Smith of Texas.
    The adoption of this report by the House shall constitute 
such a reprimand and order of reimbursement. Accordingly, the 
Select Committee recommends that the House adopt a resolution 
in the following form.

                          house resolution --

    Resolved, That the House adopt the report of the Select 
Committee on Ethics dated January 17, 1997, In the Matter of 
Representative Newt Gingrich.

           Statement Pursuant to Clause 2(l)(3)(A) of Rule XI

    No oversight findings are considered pertinent.

                        B. Investigative Process

    The investigation of this matter began on January 3, 1996, 
and lasted through December 12, 1996. In the course of the 
investigation, approximately 90 subpoenas or requests for 
documents were issued, approximately 150,000 pages of documents 
were reviewed, and approximately 70 people were interviewed. 
Most of the interviews were conducted by Mr. Cole outside the 
presence of the Subcommittee. A court reporter transcribed the 
interviews and the transcripts were made available to the 
Members of the Subcommittee. Some of the interviews were 
conducted before the Members of the Subcommittee primarily to 
explore the issue of whether Mr. Gingrich had provided the 
Committee, directly or through counsel, inaccurate, unreliable, 
or incomplete information.
    During the Preliminary Inquiry, Mr. Cole interviewed Mr. 
Gingrich twice and Mr. Gingrich appeared before the 
Subcommittee twice. Several draft discussion documents, with 
notebooks of exhibits, were prepared for the Subcommittee in 
order to brief the Members on the findings and status of the 
Preliminary Inquiry. After receiving the discussion documents, 
the Subcommittee met to discuss the legal and factual questions 
at issue.
    In most investigations, people who were involved in the 
events under investigation are interviewed and asked to 
describe the events. This practice has some risk with respect 
to the reliability of the evidence gathered because, for 
example, memories fade and can change when a matter becomes 
controversial and subject to an investigation. One advantage 
the Subcommittee had in this investigation was the availability 
of a vast body of documentation from multiple sources that had 
been created contemporaneously with the events under 
investigation. A number of documents central to the analysis of 
the matter, in fact, had been written by Mr. Gingrich. Thus, 
the documents provided a unique, contemporaneous view of 
people's purposes, motivations, and intentions with respect to 
the facts at issue. This Report relies heavily, but not 
exclusively, on an analysis of those documents to describe the 
acts, as well as Mr. Gingrich's purpose, motivations, and 
intentions.
    As the Report proceeds through the facts, there is 
discussion of conservative and Republican political philosophy. 
The Committee and the Special Counsel, however, do not take any 
positions with respect to the validity of this or any other 
political philosophy, nor do they take any positions with 
respect to the desirability of the dissemination of this or any 
other political philosophy. Mr. Gingrich's political philosophy 
and its dissemination is discussed only insofar as it is 
necessary to examine the issues in this matter.

           C. Summary of the Subcommittee's Factual Findings

    The Subcommittee found that in regard to two projects, Mr. 
Gingrich engaged in activity involving 501(c)(3) organizations 
that was substantially motivated by partisan, political goals. 
The Subcommittee also found that Mr. Gingrich provided the 
Committee with material information about one of those projects 
that was inaccurate, incomplete, and unreliable.

                              1. aow/actv

    The first project was a television program called the 
American Opportunities Workshop (``AOW''). It took place in May 
1990. The idea for this project came from Mr. Gingrich and he 
was principally responsible for developing its message. AOW 
involved broadcasting a television program on the subject of 
various governmental issues. Mr. Gingrich hoped that this 
program would help create a ``citizens' movement.'' Workshops 
were set up throughout the country where people could gather to 
watch the program and be recruited for the citizens' movement. 
While the program was educational, the citizens' movement was 
also considered a tool to recruit non-voters and people who 
were apolitical to the Republican Party. The program was 
deliberately free of any references to Republicans or partisan 
politics because Mr. Gingrich believed such references would 
dissuade the target audience of non-voters from becoming 
involved.
    AOW started out as a project of GOPAC, a political action 
committee dedicated to, among other things, achieving 
Republican control of the United States House of 
Representatives. Its methods for accomplishing this goal 
included the development and articulation of a political 
message and the dissemination of that message as widely as 
possible. One such avenue of dissemination was AOW. The 
program, however, consumed a substantial portion of GOPAC's 
revenues. Because of the expense, Mr. Gingrich and others at 
GOPAC decided to transfer the project to a 501(c)(3) 
organization in order to attract tax-deductible funding. The 
501(c)(3) organization chosen was the Abraham Lincoln 
Opportunity Foundation (``ALOF''). ALOF was dormant at the time 
and was revived to sponsor AOW's successor, American Citizens' 
Television (``ACTV''). ALOF operated out of GOPAC's offices. 
Virtually all its officers and employers were simultaneously 
GOPAC officers or employees. ACTV had the same educational 
aspects and partisan, political goals as AOW. The principal 
difference between the two was that ACTV used approximately 
$260,000 in tax-deductible contributions to fund its 
operations. ACTV broadcast three television programs in 1990 
and then ceased operations. The last program was funded by a 
501(c)(4) organization because the show's content was deemed to 
be too political for a 501(c)(3) organization.

                   2. renewing american civilization

    The second project utilizing 501(c)(3) organizations 
involved a college course taught by Mr. Gingrich called 
Renewing American Civilization. Mr. Gingrich developed the 
course as a subset to and tool of a larger political and 
cultural movement also called Renewing American Civilization. 
The goal of this movement, as stated by Mr. Gingrich, was the 
replacement of the ``welfare state'' with an ``opportunity 
society.'' A primary means of achieving this goal was the 
development of the movement's message and the dissemination of 
that message as widely as possible. Mr. Gingrich intended that 
a ``Republican majority'' would be the heart of the movement 
and that the movement would ``professionalize'' House 
Republicans. A method for achieving these goals was to use the 
movement's message to ``attract voters, resources, and 
candidates.'' According to Mr. Gingrich, the course was, among 
other things, a primary and essential means to develop and 
disseminate the message of the movement.
    The core message of the movement and the course was that 
the welfare state had failed, that it could not be repaired but 
had to be replaced, and that it had to be replaced with an 
opportunity society based on what Mr. Gingrich called the 
``Five Pillars of American Civilization.'' These were: (1) 
personal strength; (2) entrepreneurial free enterprise; (3) the 
spirit of invention; (4) quality as defined by Edwards Deming; 
and (5) the lessons of American history. The message also 
concentrated on three substantive areas. These were: (1) jobs 
and economic growth; (2) health; and (3) saving the inner city.
    This message was also Mr. Gingrich's main campaign theme in 
1993 and 1994 and Mr. Gingrich sought to have Republican 
candidates adopt the Renewing American Civilization message in 
their campaigns. In the context of political campaigns, Mr. 
Gingrich used the term ``welfare state'' as a negative label 
for Democrats and the term ``opportunity society'' as a 
positive label for Republicans.
    As General Chairman of GOPAC, Mr. Gingrich decided that 
GOPAC would use Renewing American Civilization as its political 
message and theme during 1993-1994. GOPAC, however, was having 
financial difficulties and could not afford to disseminate its 
political messages as it had in past years. GOPAC had a number 
of roles in regard to the course. For example, GOPAC personnel 
helped develop, manage, promote, and raise funds for the 
course. GOPAC Charter Members helped develop the idea to teach 
the course as a means for communicating GOPAC's message. GOPAC 
Charter Members at Charter Meetings helped develop the content 
of the course. GOPAC was ``better off'' as a result of the 
nationwide dissemination of the Renewing American Civilization 
message via the course in that the message GOPAC had adopted 
and determined to be the one that would help it achieve its 
goals was broadcast widely and at no cost to GOPAC.
     The course was taught at Kennesaw State College (``KSC'') 
in 1993 and at Reinhardt College in 1994 and 1995. Each course 
consisted of ten lectures and each lecture consisted of 
approximately four hours of classroom instruction, for a total 
of forty hours. Mr. Gingrich taught twenty hours of each course 
and his co-teacher, or occasionally a guest lecturer, taught 
twenty hours. Students from each of the colleges as well as 
people who were not students attended the lectures. Mr. 
Gingrich's 20-hour portion of the course was taped and 
distributed to remote sites, referred to as ``site hosts,'' via 
satellite, videotape and cable television. As with AOW/ACTV, 
Renewing American Civilization involved setting up workshops 
around the country where people could gather to watch the 
course. While the course was educational, Mr. Gingrich intended 
that the workshops would be, among other things, a recruiting 
tool for GOPAC and the Republican Party.
    The major costs for the Renewing American Civilization 
course were for dissemination of the lectures. This expense was 
primarily paid for by tax-deductible contributions made to the 
501(c)(3) organizations that sponsored the course. Over the 
three years the course was broadcast, approximately $1.2 
million was spent on the project. The Kennesaw State College 
Foundation (``KSCF'') sponsored the course the first year. All 
funds raised were turned over to KSCF and dedicated exclusively 
for the use of the Renewing American Civilization course. \1\ 
KSCF did not, however, manage the course and its role was 
limited to depositing donations into its bank account and 
paying bills from that account that were presented to it by the 
Dean of the KSC Business School. KSCF contracted with the 
Washington Policy Group, Inc. (``WPG'') to manage and raise 
funds for the course's development, production and 
distribution. Jeffrey Eisenach, GOPAC's Executive Director from 
June 1991 to June 1993 was the president and sole owner of WPG. 
WPG and Mr. Eisenach played similar roles with respect to AOW/
ACTV.
---------------------------------------------------------------------------
    \1\ As general management and support fees, KSCF kept 2.5% of any 
money raised and KSC's Business School kept 7.5% of any money raised.
---------------------------------------------------------------------------
    When the contract between WPG and KSCF ended in the fall of 
1993, the Progress and Freedom Foundation (``PFF'') assumed the 
role WPG had with the course at the same rate of compensation. 
Mr. Eisenach was PFF's founder and president. Shortly after PFF 
took over the management of the course, the Georgia Board of 
Regents passed a resolution prohibiting any elected official 
from teaching at a Georgia state educational institution. This 
was the culmination of a controversy that had arisen around the 
course at KSC. A group of KSC faculty had objected to the 
course being taught on the campus because of a belief that it 
was an effort to use the college to disseminate a political 
message. Because of the Board of Regent's decision and the 
controversy, it was decided that the course would be moved to a 
private college.
    The course was moved to Reinhardt for the 1994 and 1995 
sessions. While there, PFF assumed full responsibility for the 
course. PFF no longer received payments to run the course but, 
instead, took in all contributions to the course and paid all 
the bills, including paying Reinhardt for the use of the 
college's video production facilities. All funds for the course 
were raised by and expended by PFF under its tax-exempt status.

                    3. failure to seek legal advice

    Under the Internal Revenue Code, a 501(c)(3) organization 
must be operated exclusively for exempt purposes. The presence 
of a single non-exempt purpose, if more than insubstantial in 
nature, will destroy the exemption regardless of the number or 
importance of truly exempt purposes. Conferring a benefit on 
private interests is a non-exempt purpose. Under the Internal 
Revenue Code, a 501(c)(3) organization is also prohibited from 
intervening in a political campaign or providing any support to 
a political action committee. These prohibitions reflect 
congressional concerns that taxpayer funds not be used to 
subsidize political activity.
    During the Preliminary Inquiry, the Subcommittee consulted 
with an expert in the law of tax-exempt organizations and read 
materials on the subject. Mr. Gingrich's activities onbehalf of 
AOW/ACTV and Renewing American Civilization, as well as the activities 
of others on behalf of those projects done with Mr. Gingrich's 
knowledge and approval, were reviewed by the expert. The expert 
concluded that those activities violated the status of the 
organizations under section 501(c)(3) in that, among other things, 
those activities were intended to confer more than insubstantial 
benefits on GOPAC, Mr. Gingrich, and Republican entities and 
candidates, and provided support to GOPAC.
    At Mr. Gingrich's request, the Subcommittee also heard from 
tax counsel retained by Mr. Gingrich for the purposes of the 
Preliminary Inquiry. While that counsel is an experienced tax 
attorney with a sterling reputation, he has less experience in 
dealing with tax-exempt organizations law than does the expert 
retained by the Subcommittee. According to Mr. Gingrich's tax 
counsel, the type of activity involved in the AOW/ACTV and 
Renewing American Civilization projects would not violate the 
status of the relevant organizations under section 501(c)(3). 
He opined that once it was determined that an activity was 
``educational,'' as defined by the IRS, and did not have the 
effect of benefiting a private interest, it did not violate the 
private benefit prohibition. In the view of Mr. Gingrich's tax 
counsel, motivation on the part of an organization's principals 
and agents is irrelevant. Further, he opined that a 501(c)(3) 
organization does not violate the private benefit prohibition 
or political campaign prohibition through close association 
with or support of a political action committee unless it 
specifically calls for the election or defeat of an 
identifiable political candidate.
    Both the Subcommittee's tax expert and Mr. Gingrich's tax 
counsel, however, agreed that had Mr. Gingrich sought their 
advice before embarking on activities of the type involved in 
AOW/ACTV and the Renewing American Civilization course, each of 
them would have advised Mr. Gingrich not to use a 501(c)(3) 
organization as he had in regard to those activities. The 
Subcommittee's tax expert said that doing so would violate 
501(c)(3). During his appearance before the Subcommittee, Mr. 
Gingrich's tax counsel said that he would not have recommended 
the use of 501(c)(3) organizations to sponsor the course 
because the combination of politics and 501(c)(3) organizations 
is an ``explosive mix'' almost certain to draw the attention of 
the IRS.
    Based on the evidence, it was clear that Mr. Gingrich 
intended that the AOW/ACTV and Renewing American Civilization 
projects have substantial partisan, political purposes. In 
addition, he was aware that political activities in the context 
of 501(c)(3) organizations were problematic. Prior to embarking 
on these projects, Mr. Gingrich had been involved with another 
organization that had direct experience with the private 
benefit prohibition in a political context, the American 
Campaign Academy. In a 1989 Tax Court opinion issued less than 
a year before Mr. Gingrich set the AOW/ACTV project into 
motion, the Academy was denied its exemption under 501(c)(3) 
because, although educational, it conferred an impermissible 
private benefit on Republican candidates and entities. Close 
associates of Mr. Gingrich were principals in the American 
Campaign Academy, Mr. Gingrich taught at the Academy, and Mr. 
Gingrich had been briefed at the time on the tax controversy 
surrounding the Academy. In addition, Mr. Gingrich stated 
publicly that he was taking a very aggressive approach to the 
use of 501(c)(3) organizations in regard to, at least, the 
Renewing American Civilization course.
    Taking into account Mr. Gingrich's background, experience, 
and sophistication with respect to tax-exempt organizations, 
and his status as a Member of Congress obligated to maintain 
high ethical standards, the Subcommittee concluded that Mr. 
Gingrich should have known to seek appropriate legal advice to 
ensure that his conduct in regard to the AOW/ACTV and Renewing 
American Civilization projects was in compliance with 
501(c)(3). Had he sought and followed such advice--after having 
set out all the relevant facts, circumstances, plans, and goals 
described above--501(c)(3) organizations would not have been 
used to sponsor Mr. Gingrich's ACTV and Renewing American 
Civilization projects.

             4. mr. gingrich's statements to the committee

    In responding to the complaints filed against him 
concerning the Renewing American Civilization course, Mr. 
Gingrich submitted several letters to the Committee. His first 
letter, dated October 4, 1994, did not address the tax issues 
raised in Mr. Jones' complaint, but rather responded to the 
part of the complaint concerning unofficial use of official 
resources. In it Mr. Gingrich stated that GOPAC, among other 
organizations, paid people to work on the course. After this 
response, the Committee wrote Mr. Gingrich and asked him 
specifically to address issues related to whether the course 
had a partisan, political aspect to it and, if so, whether it 
was appropriate for a 501(c)(3) organization to be used to 
sponsor the course. The Committee also specifically asked 
whether GOPAC had any relationship to the course. Mr. 
Gingrich's letter in response, dated December 8, 1994, was 
prepared by his attorney, but it was read, approved, and signed 
by Mr. Gingrich. It stated that the course had no partisan, 
political aspects to it, that his motivation for teaching the 
course was not political, and that GOPAC neither was involved 
in nor received any benefit from any aspect of the course. In 
his testimony before the Subcommittee, Mr. Gingrich admitted 
that these statements were not true.
    When the amended complaint was filed with the Committee in 
January 1995, Mr. Gingrich's attorney responded to the 
complaint on behalf of Mr. Gingrich in a letter dated March 27, 
1995. His attorney addressed all the issues in the amended 
complaint, including the issues related to the Renewing 
American Civilization course. The letter was signed by Mr. 
Gingrich's attorney, but Mr. Gingrich reviewed and approved it 
prior to its being delivered to the Committee. In an interview 
with Mr. Cole, Mr. Gingrich stated that if he had seen anything 
inaccurate in the letter he would have instructed his attorney 
to correct it. Similar to the December 8, 1994 letter, the 
March 27, 1995 letter stated that the course had no partisan, 
political aspects to it, that Mr. Gingrich's motivation for 
teaching the course was not political, and that GOPAC had no 
involvement in nor received any benefit from any aspect of the 
course. In his testimony before the Subcommittee Mr. Gingrich 
admitted that these statements were not true.
    The goal of the letters was to have the complaints 
dismissed. Of the people involved in drafting or editing the 
letters, or reviewing them for accuracy, only Mr. Gingrich had 
personal knowledge of the facts contained in the letters 
regarding the course. The facts in the letters that were 
inaccurate, incomplete, and unreliable were material to the 
Committee's determination on how to proceed with the tax 
questions contained in the complaints.

                   D. Statement of Alleged Violation

    On December 21, 1996, the Subcommittee issued a Statement 
of Alleged Violation stating that Mr. Gingrich had engaged in 
conduct that did not reflect creditably on the House of 
Representatives in that by failing to seek and follow legal 
advice, Mr. Gingrich failed to take appropriate steps to ensure 
that activities with respect to the AOW/ACTV project and the 
Renewing American Civilization project were in accordance with 
section 501(c)(3); and that on or about December 8, 1994, and 
on or about March 27, 1995, information was transmitted to the 
Committee by and on behalf of Mr. Gingrich that was material to 
matters under consideration by the Committee, which 
information, as Mr. Gingrich should have known, was inaccurate, 
incomplete, and unreliable.
    On December 21, 1996, Mr. Gingrich filed an answer with the 
Subcommittee admitting to this violation of House Rules.
    The following is a summary of the findings of the 
Preliminary Inquiry relevant to the facts as set forth in the 
Statement of Alleged Violation.

    II. Summary of Facts Pertaining to American Citizens Television

                                A. GOPAC

     GOPAC was a political action committee organized under 
Section 527 of the Internal Revenue Code. As such, 
contributions to GOPAC were not tax-deductible.\2\ GOPAC's goal 
was to attract people to the Republican party, develop a ``farm 
team'' of Republican state and local public officials who might 
one day run for Congress and, ultimately, create a Republican 
majority in the United States House of Representatives. (12/7/
96 Callaway Tr. 9; 7/12/96 Eisenach Tr. 21; 7/17/96 Gingrich 
Tr. 17-20).\3\ GOPAC did not undertake any projects that were 
not directed toward achieving that goal. (7/18/96 Gingrich Tr. 
362; 12/7/96 Callaway Tr. 33).
---------------------------------------------------------------------------
    \2\ See September 6, 1996 letter from the tax counsel Mr. Gingrich 
hired during the Preliminary Inquiry, James Holden, at page 41: 
``Contributions made to organizations described in section 501(c)(3) 
qualify generally as charitable deductions under section 170(c)(2). In 
contrast, contributions made to section 501(c)(4) and section 527 
organizations do not qualify as charitable deductions. For this reason, 
exempt organizations that are described in section 501(c)(3) enjoy the 
substantial advantage of being able to attract donations that are 
deductible on the tax returns of contributors.''
    \3\ Citations containing a ``Tr.'' indicate the page of the 
transcript from a witness's interview. The date of the interview is 
also provided in the citation.
---------------------------------------------------------------------------
    GOPAC's mission was defined as follows:

          GOPAC's mission for the 1990's is to create and 
        disseminate the doctrine which defines a caring, 
        humanitarian reform Republican Party in such a way as 
        to elect candidates, capture the United States House of 
        Representatives and become a governing majority at 
        every level of Government.

(Ex. 1, GOPAC3 137). This aspect of GOPAC's activities was 
further explained in a draft document from November 1989:

    As important as the creation of new doctrine is its 
dissemination. During the 1980s GOPAC and Newt Gingrich have 
led the way in applying new technology, from C-SPAN to video 
tapes, to disseminate information to Republican candidates and 
political activists.
          * * * * * * *
     But the Mission Statement demands that we do much more. To 
create the level of change needed to become a majority, the new 
Republican doctrine must be communicated to a broader audience, 
with greater frequency, in a more usable form. GOPAC needs a 
bigger ``microphone.'' (emphasis in the original).

(Ex. 2, 283). GOPAC continued to support this approach to 
achieving its goals in subsequent years. For example, as stated 
in its Report to Shareholders dated April 26, 1993:

          While both ``message'' and ``mechanism'' are 
        important, GOPAC's comparative advantage lies in 
        developing new ideas--i.e. in the ``message'' part of 
        the equation. GOPAC will thus continue to focus its 
        efforts on developing and communicating our values in a 
        way voters can understand and support.

(Ex. 3, Eisenach 2539).

    From approximately 1986 through 1995, Mr. Gingrich served 
as the General Chairman of GOPAC. (7/17/96 Gingrich Tr. 15). In 
this role he came up with the ideas GOPAC used for its 
political messages and themes, as well as its vision, strategy, 
and direction. (7/17/96 Gingrich Tr. 20; 7/15/96 Gaylord Tr. 
21-22; 6/26/96 Hanser Tr. 81; 7/12/96 Eisenach Tr. 22-23; 7/3/
96 Rogers Tr. 54-56; 6/27/96 Nelson Tr. 22-23; 12/7/96 Callaway 
Tr. 6, 9).

    B. American Opportunities Workshop/American Citizens Television

                             1. background

    In early 1990, GOPAC embarked on a project to produce a 
television program called the American Opportunities Workshop 
(``AOW''). The idea for this project came from Mr. Gingrich and 
he was very involved in developing the message it used. (12/7/
96 Callaway Tr. 11, 12, 14; 7/12/96 Eisenach Tr. 16; 12/5/96 
Eisenach Tr. 10; 12/9/96 Riddle Tr. 14; 12/9/96 Gingrich Tr. 
12).\4\ AOW was broadcast on May 19, 1990, on the Family 
Channel and was hosted by Mr. Gingrich. (Ex. 4, GOPAC3 181).
---------------------------------------------------------------------------
    \4\ The Committee's Special Counsel, James Cole, interviewed Mr. 
Gingrich on July 17, 1996; July 18, 1996; and December 9, 1996. Mr. 
Gingrich appeared before the Investigative Subcommittee to give 
testimony on November 13, 1996, and December 10, 1996.
---------------------------------------------------------------------------
    One of the purposes of the program was to build a citizens' 
movement that would communicate the principles of 
Entrepreneurial Free Enterprise, Basic American Values, and 
Technological Progress. (Ex. 5, FAM 0011; 12/7/96 Callaway Tr. 
14). These principles were called the ``Triangle of American 
Success.'' (Ex. 4, GOPAC3 181). AOW consisted of workshops set 
up throughout the country where activists could gather to watch 
the broadcast and, in the words of those responsible for AOW, 
help build a citizens' movement and increase citizen 
involvement. (12/7/96 Callaway Tr. 14, 15; 12/9/96 Riddle Tr. 
12, 13). Approximately 600 workshop cites were established 
where approximately 20,000 people watched the program. (Ex. 6, 
Eisenach 0359). The target group for the program was non-
voters. (Ex. 7, WGC2-01025).
    As stated by GOPAC's then-Executive Director, Kay Riddle, 
the purpose of creating the citizens' movement and attempting 
to increase citizen involvement was to get people to solve 
their own community problems and not look to the federal 
government for help. (12/9/96 Riddle Tr. 13). Ms. Riddle went 
on to say, ``Another product of that would be, of course, if we 
got people interested * * *, we hoped and believed that 
eventually they would vote Republican.'' (12/9/96 Riddle Tr. 
13). ``[W]e [at GOPAC] truly believed that the more we could 
involve people and educate people, the more likely we were to 
have people vote Republican.'' (12/9/96 Riddle Tr. 14-15). 
Similarly, Mr. Callaway characterized the message of AOW as 
follows:

          But I think, fundamentally * * * it was a message 
        that Republican principles are sound principles, that 
        everything does not need to be done by government, that 
        you can do better by trusting individuals to act for 
        themselves than you can by having government tell 
        individuals what they must do, that a smaller 
        government is frequently better than a larger 
        government, that it is better to reduce taxes than 
        raise taxes. I think it is Republican kinds of issues.

(12/7/96 Callaway Tr. 12-13).

    Producing AOW was very expensive. (12/7/96 Callaway Tr. 16; 
6/14/96 Callaway Tr. 21-22). It cost over $500,000 and consumed 
approximately 62% of GOPAC's budget for the first half of 1990. 
(Ex. 8, 1273). It was envisioned that the project would 
continue beyond May 19, 1990 (12/5/96 Eisenach Tr. 46; Ex. 4, 
GOPAC3 181) and prior to its airing, Mr. Gingrich, Mr. Callaway 
and others decided to have the project's follow-on activities 
transferred to a 501(c)(3) organization. (Ex. 9, Eisenach 3909; 
12/5/96 Eisenach Tr. 49; 12/7/96 Callaway Tr. 80). The 
organization chosen was the Abraham Lincoln Opportunity 
Foundation (``ALOF''). The project was transferred to ALOF so 
that it could be funded with tax-deductible money. (12/9/96 
Riddle Tr. 19).
    ALOF was established in 1984 in Colorado by Mr. Callaway to 
fund programsfor inner city youth. (6/14/96 Callaway Tr. 26). 
It had been inactive for some time prior to 1990 and was revived for 
the purpose of taking over the successor activities of AOW. (12/7/96 
Callaway Tr. 84). Under ALOF the project became know as American 
Citizens' Television (``ACTV''). Mr. Callaway was the President of ALOF 
and Kay Riddle was the Secretary. Mr. Callaway was also GOPAC's 
Chairman and Ms. Riddle was also GOPAC's Executive Director. ALOF hired 
some GOPAC employees on a full-time basis, used other GOPAC employees 
and consultants on a part-time basis, and used GOPAC offices and 
facilities. (12/7/96 Callaway Tr. 7, 11, 13, 14, 73-75).
    ACTV was designed to continue AOW's work of building a 
citizens' movement based on the ``Triangle of American 
Success'' and had the same goals as AOW. (Ex. 5, FAM 0011; 12/
7/96 Callaway Tr. 14; 12/9/96 Riddle Tr. 16; 12/9/96 Gingrich 
Tr. 8). In order to ensure a smooth transition, materials 
concerning ACTV were given to all AOW participants on May 19, 
1990. (Ex. 6, Eisenach 0361).
    ACTV produced three television programs in 1990--one on 
July 21 which discussed the use of local access cable 
television for activist movements; one on September 29 which 
discussed educational choice;\5\ and one on October 27 which 
was about Taxpayers' Action Day. The last program was primarily 
the responsibility of the Council for Citizens Against 
Government Waste (``CCAGW''), a 501(c)(4) organization. This 
was due to the fact that the content of the program was deemed 
to be inappropriate for ALOF to sponsor as a 501(c)(3) 
organization. (Ex. 10, FAM 0024). While CCAGW paid for all of 
the out-of-pocket expenses (e.g., production expense and 
broadcast time), ALOF still provided support through its staff. 
(Ex. 11, Eisenach 4254; 12/5/96 Eisenach Tr. 5, 67). Each 
program was broadcast on the Family Channel.
---------------------------------------------------------------------------
    \5\ A 1989 draft GOPAC document indicates that one of GOPAC's 
projects designed to ``create and disseminate the new Republican 
doctrine for the 1990's'' would be the Education Choice Coalition. (Ex. 
2, 284).
---------------------------------------------------------------------------
    In setting up ACTV it was understood that Mr. Gingrich 
would maintain his involvement and control over the programs. 
(Ex. 12, WGC2-01337). While some say that he was not very 
involved when it became ACTV, (e.g., 12/7/96 Callaway Tr. 14), 
there is evidence that his involvement continued. Mr. Gingrich 
hosted the first ACTV program. Mr. Gingrich also introduced and 
closed the second program in September. The host was Pete 
DuPont, but Mr. Gingrich was featured for a significant portion 
of the program. While the last program in October was paid for 
primarily by CCAGW, Mr. Gingrich approved its use on ACTV. (Ex. 
11, Eisenach 4254).
    Both AOW and ACTV were described to the public as non-
partisan. (Ex. 6, Eisenach 0361). Much of the documentation 
that was either internal to GOPAC or sent to its supporters, 
however, indicates a partisan, political purpose. While GOPAC, 
as a political action committee, could freely engage in 
partisan, political activity, ALOF, as a 501(c)(3) organization 
could not. Because ACTV was described as a continuation of the 
activities of AOW (12/7/96 Callaway Tr. 13-15; 12/5/96 Eisenach 
Tr. 8; Ex. 5, FAM 0011), documents were reviewed during the 
Preliminary Inquiry relating to both projects to determine what 
the goals were for the two projects.
    GOPAC contracted with an organization called the Washington 
Policy Group (``WPG'') to manage AOW. (7/12/96 Eisenach Tr. 
298). Jeffrey Eisenach was president and sole owner of WPG and 
the project coordinator for AOW. (7/12/96 Eisenach Tr. 298). 
Mr. Eisenach was also responsible for managing ALOF's ACTV 
programs. (12/7/96 Callaway Tr. 16). WPG was essentially Mr. 
Eisenach's ``personal consulting firm'' and usually had two or 
three employees. (7/12/96 Eisenach Tr. 9). WPG used GOPAC 
office space and equipment as part of its compensation. (11/14/
96 Eisenach Tr. 60). In addition to its work on AOW and ACTV, 
WPG had a consulting contract with GOPAC from January 1989 
through September 1993. (7/12/96 Eisenach Tr. 9, 10, 298). 
Through WPG's contract with GOPAC, Mr. Eisenach ``provided 
research assistance and advice to Mr. Gingrich, strategic 
advice to GOPAC and worked on some specific projects, focus 
groups and so forth, for GOPAC.'' (7/12/96 Eisenach Tr. 9). Mr. 
Eisenach was also the Executive Director of GOPAC from June 
1991 to June 1993. (7/12/96 Eisenach Tr. 8).

                  2. Planning and Purpose for AOW/ACTV

    A document entitled ``Key Factors in a House GOP Majority'' 
appears to be one of the earliest documents pertaining to the 
purpose of AOW and ACTV. A typed version and a handwritten 
version of the document were produced during the Preliminary 
Inquiry. The handwritten version is in Mr. Gingrich's 
handwriting. In it he wrote:

    1. The fact that 50% of all potential voters are currently 
outside politics (non-voters) creates the possibility that a 
new appeal might alter the current balance of political power 
by bringing in a vast number of new voters.
          * * * * * * *
    3. It is possible to articulate a vision of ``an America 
that can be'' which is appealing to most Americans, reflects 
the broad values of a governing conservatism (basic American 
values, entrepreneurial Free Enterprise and Technological 
progress), and is very difficult for the Democrats to co-opt 
because of their ideology and their interest groups.
    4. It is more powerful and more effective to develop a 
reform movement parallel to the official Republican Party 
because:
          * * * * * * *
          b. the non-voters who are non-political or anti-
        political will accept a movement more rapidly than they 
        will accept an established party;
          * * * * * * *
    5. As much as possible, the House Republican Party, the 
Bush Administration, Senate Republicans, incumbent Republicans 
across the country, the NRCC, RNC, SRCC and the conservative 
movement should be briefed on movement developments; conflict 
within this broad group should be minimized and coordination 
maximized.
    6. The objective measurable goal is the maximum growth of 
news coverage of our vision and ideas, the maximum recruitment 
of new candidates, voters and resources, and the maximum 
electoral success in winning seats from the most local office 
to the White House and then using those victories to implement 
the values of a governing conservatism and to create the best 
America that can be.

(Ex. 13, Eisenach 4838-4839 (typed version) and Eisenach 4832-4834 
(handwritten version)).

    When asked about AOW and ACTV, Mr. Gingrich said he had 
very little recollection of the projects. He said he was 
distracted by other events at the time such as his re-election 
efforts, legislative issues, and becoming Republican Whip. (12/
9/96 Gingrich Tr. 19, 39, 43). He said he had no recollection 
of the ``Key Factors in a House GOP Majority'' document, did 
not know if it related to AOW or ACTV, and did not know the 
purpose for which it was written. (12/9/96 Gingrich Tr. 31). An 
analysis of other documents, however, shows its relationship to 
the AOW/ACTV projects. Mr. Callaway said in his interview that 
the goalsset forth in the ``Key Factors in a House GOP 
Majority'' document were the same as those for AOW and ACTV. (12/7/96 
Callaway Tr. 37-38).
    As stated above, AOW was targeted to non-voters. (Ex. 7, 
WGC2-01025). The ``Key Factors in a House GOP Majority'' 
document notes that non-voters are the ones to appeal to in 
order to change the balance of power. AOW/ACTV based the 
citizens' movement on the ``Triangle of American Success'' 
which was made up of basic American values, entrepreneurial 
free enterprise, and technological progress. (Ex. 5, FAM 0011; 
12/7/96 Callaway Tr. 14). The ``Key Factors in a House GOP 
Majority'' document indicates that it will use those same three 
principles to appeal to non-voters. AOW/ACTV was focused on 
building a non-partisan citizens' movement. (Ex. 6, Eisenach 
0358-0359; Ex. 5, FAM 0011). In the ``Key Factors in a House 
GOP Majority'' document, Mr. Gingrich states that ``[i]t is 
more powerful and more effective to develop a reform movement 
parallel to the official Republican Party because . . . the 
non-voters who are non-political or anti-political will accept 
a movement more rapidly than they will accept an established 
party.'' (Ex. 13, Eisenach 4838 and Eisenach 4832).
    In a congressional briefing Mr. Gingrich gave concerning 
AOW on March 30, 1990, he described AOW/ACTV as follows:

          It is our goal to define our position as a caring 
        humanitarian reform party applying the triangle of 
        American success and applying common sense focused on 
        success and opportunities to explain in general terms 
        for the whole fall campaign, and again some Democrats 
        will pick up the language and this is open to 
        everybody, this is a free country, we think on balance 
        it is vastly more advantageous to us than it is to the 
        left since they are the party of big city machines, 
        they are the party of the unions, they're much more 
        tied to the bureaucratic welfare state.

(Ex. 15, WGC2 06081, pp. 17-18). The ``Key Factors in a House 
GOP Majority'' document notes that the message of the citizens' 
movement is designed not to be useful for Democrats because it 
will be ``very difficult for [them] to co-opt [the ideas] 
because of their ideology and their interest groups.'' (Ex. 13, 
Eisenach 4838 and 4832-4833).
    At the congressional briefing, Mr. Gingrich spoke of a 
focus group that was commissioned to assist in the AOW/ACTV 
effort. He described it as ``the largest focus group project 
ever undertaken by the Republican Party.'' (Ex. 14, WGC2 06081, 
p. 8). He said it concentrated on non-voters under 40 years of 
age (Ex. 14, WGC2 06081, p. 8) and tested negative language 
like ``the bureaucratic welfare state'' and positive language 
like the ``Triangle of American Success,'' ``Entrepreneurial 
Free Enterprise,'' ``Technological Progress and Innovation,'' 
and ``Basic American Values.'' (Ex. 14, WGC2 06081, pp. 10-11).
    Near the end of the briefing Mr. Gingrich explained the 
reasons for having the program labeled as non-partisan:

          Lastly I was going to make the point one of the 
        reasons we are reaching out and we really urge people 
        to be nonpartisan and be wide open. But we have two 
        reasons. First, there are a lot of former Democrats. 
        Andy Ireland, Ronald Reagan, Phil Gramm, Jean 
        Kirkpatrick, Connie Mack, you go down the list, a 
        surprising list of people who looked at both sides and 
        decided we were right. That we were more open, we were 
        moving in the right direction.
          But second, most young people under 40 are not 
        politicized. The minute you politicize this and you 
        make it narrow and you make it partisan--you lose them.

(Ex. 14, WGC2 06081, pp. 23-24).

    The focus group Mr. Gingrich referred to was commissioned 
by GOPAC in early 1990. It was performed by Market Strategies, 
Inc. The July 10, 1990 report on the results of the focus group 
described the project as follows:

          This research project is part of an overall effort to 
        build a new governing majority in the United States 
        formed around conservative principles. Historically, 
        building a new majority has involved three essential 
        tasks: activating a group of non-participating citizens 
        to support an existing party (or form a new party), 
        constructing a theory or explanation of what is right 
        and wrong in society with which the non-participating 
        citizens agree, and developing the right language 
        (political rhetoric) to communicate that theory to the 
        non-participating citizens. This project is the first 
        of several research projects to be sponsored by GOPAC 
        to help achieve these three tasks in this decade.

(Ex. 15, MSI 0030). The report then describes the specific 
language it tested as follows:

          The theory's explanation of what is wrong in society 
        was put in terms of ``the bureaucratic welfare state'' 
        and the ``values of the left.'' The theory's 
        explanation of what is good in society was put in terms 
        of ``technological progress,'' ``entrepreneurial free 
        enterprise,'' and ``basic American values'' which were 
        summarized as ``the Triangle of American Success.''

(Ex. 15, MSI 0030).

    In describing the target group for building the new 
governing majority, the report states:

    The potential for a new governing majority exists because 
of the large and growing numbers of non-participating citizens 
in our political system.
          * * * * * * *
    Consequently, a major premise for the research project is 
that younger citizens are the right target group for a new 
majority strategy and that a political theory and language 
needs to be effective with them if it is to be effective at 
all. Supporting this premise is an additional opportunity (to 
their not voting now) about younger voters--they are already 
predisposed to vote Republican.

(Ex. 15, MSI 0031-0032).

      3. Letters Describing Partisan, Political Nature of AOW/ACTV

    A number of GOPAC letters also indicate the purpose behind 
AOW/ACTV. Some are signed, some are not, but the ones that are 
not signed were apparently in GOPAC's files for some years, 
indicating that they were probably sent out. For example, in a 
signed letter dated February 21, 1990, to members of GOPAC's 
Executive Finance Committee, Mr. Callaway wrote that:

          The next two years are absolutely critical to all 
        that we hope to accomplish. Our May 19 project [AOW] 
        will go a long way toward helping Republicans set an 
        agenda and persuading Americans to realign with us.

(Ex. 16, GOPAC3 484). A copy of this letter was sent to Mr. 
Gingrich. Written across the top of his copy, in his 
handwriting, is ``Newt 2/20/90.'' (Ex. 16, WGC2-03992). 
According to Mr. Gingrich this probably meant he had seen the 
letter (12/9/96 Gingrich Tr. 36-37); however, he did not recall 
the content of this letter during an interview with Mr. Cole. 
(12/9/96 Gingrich Tr. 35).
    An unsigned letter, apparently prepared for Mr. Callaway's 
signature,<SUP>6 dated March 7, 1990, states:
---------------------------------------------------------------------------
    \6\ According to Mr. Callaway this letter may have been sent out, 
but he did not have a specific recollection of it. (12/7/96 Callaway 
Tr. 49).

    Our May 19th American Opportunities Workshop is the single 
most exciting project I've ever undertaken. I consider this 
program critical to our efforts to become a Republican 
majority.
          * * * * * * *
    In order to encourage Americans to vote--and vote 
Republican--so that we may enact our policies of opportunity, 
we must reach them with our vision of hope.
    It is time for our message and program, now proven among 
those in the trenches, to be shared with the Americans who are 
not motivated by our current government to go to the polls or 
get involved.
          * * * * * * *
    The American Opportunities Workshop is GOPAC's answer to 
teaching and empowering the American people. We hope that the 
citizen movement launched by this project will be the key to a 
future of Republican governance.

(Ex. 17, 425-426).

    A March 16, 1990 GOPAC letter over Mr. Gingrich's name 
discusses the purpose behind AOW.

    Through the use of satellite hook-ups, not only can we 
reach new groups of voters not traditionally associated with 
our Party, but we'll be able to give them our message straight, 
without it being filtered and misinterpreted by liberal 
elements in the media.
          * * * * * * *
    Because I believe it has such great potential for helping 
President Bush, our candidates and our Party, I told Bo to move 
ahead with planning the workshop.
          * * * * * * *
    I truly believe that our Party and our President stand on 
the verge of a tremendous success this year, and that this 
workshop can be a great election year boost to us.

(Ex. 18, 2782-2783). Mr. Gingrich did not recall this document. 
When asked whether AOW was intended to be an election year 
boost, he said that it may have been, but he also thought it 
was idea oriented. (12/9/96 Gingrich Tr. 39-40).
    In an unsigned letter addressed to Mr. Thorton Stearns, 
apparently written for Mr.Callaway's signature,<SUP>7 the AOW 
project and its purpose were described as follows:

    \7\ According to Mr. Callaway this letter may have been sent out, 
but he again did not have a specific recollection of it. (12/7/96 
Callaway Tr. 58).

          With more than 600 workshop sites across the country, 
        30,000 participants, and extensive media coverage, AOW 
        was a significant success on its own terms. However, 
        the real reason GOPAC took on AOW was to explore an 
        innovative new mechanism for creating and motivating 
        the new Republican majority of the 1990s.

(Ex. 19, GOPAC3 467).

    In a letter over Mr. Gingrich's name dated June 21, 1990, 
AOW and ACTV are explicitly tied together in an effort to 
achieve the same goal of building the Republican Party and 
trying to have an impact on political campaigns. The letter 
states:

          These are exciting times at GOPAC and we have been 
        quite busy lately. I am excited about [the] progress of 
        the ``American Citizens' Television'' project, which 
        will carry the torch of citizen activism begun by our 
        American Opportunities Workshop on May 19th. We 
        mobilized thousands of people across the nation at the 
        grass roots level who as a result of AOW, are now 
        dedicated GOPAC activists. We are making great strides 
        in continuing to recruit activists all across America 
        to become involved with the Republican party. Our 
        efforts are literally snowballing into the activist 
        movement we need to win in '92.

(Ex. 20, GOPAC3 224). Mr. Gingrich said that the signature on 
the letter was not his. (12/9/96 Gingrich Tr. 40). Mr. Gingrich 
said that the above statement did not reflect the purpose of 
AOW or ACTV. (12/9/96 Gingrich Tr. 41).
    Finally, an August 27, 1990 memorandum from Mr. Callaway to 
Mr. Gingrich and Jim Tilton <SUP>8 gives insight to the goals 
of the AOW/ACTV projects. (Ex. 21, Eisenach 3950-3959). The 
memorandum discusses a meeting the three men had five days 
earlier. Based on the memorandum, the main topic focused on how 
GOPAC should proceed in the future. The problems addressed in 
the meeting concerned the fact that AOW/ACTV had diverted too 
much money and attention from traditional GOPAC efforts. This 
caused erosion in support from GOPAC members. The three men 
decided to try one more ACTV program on September 29, 1990. If 
additional funding was not available beyond that point, the 
project would not be continued. They decided that it needed to 
be ``a very strong program that is controversial enough to stir 
up our Charter members and other constituents.'' (Ex. 21, 
Eisenach 3951). The show that was chosen was on educational 
choice, which was a specific GOPAC project.
---------------------------------------------------------------------------
    \8\ Jim Tilton was an unpaid senior advisor to GOPAC. He was an 
attorney and a close friend of Mr. Gingrich. (12/10/96 Gingrich Tr. 10, 
11, 56, 57).
---------------------------------------------------------------------------
    The memorandum recounted that Mr. Gingrich had reviewed all 
the options set forth and concluded the following:

          Newt then stated firmly that he feels we need to go 
        back to basics for now through 1992. That the only 
        special projects for 1992 should be 1992 election 
        oriented projects. Newt has now concluded that you 
        can't really affect 1992 elections indirectly--we must 
        do it directly through political programs.

(Ex. 21, Eisenach 3950).<SUP>9 Mr. Callaway said that this 
paragraph could have been referring to ACTV, but he did not 
have a clear recollection. (12/5/96 Callaway Tr. 62).
---------------------------------------------------------------------------
    \9\ A GOPAC statement of ``Revenue and Expenses'' attached to this 
memorandum shows a single line item for ``AOW/ACTV.'' (Ex. 21, Eisenach 
3957).
---------------------------------------------------------------------------

          4. AOW/ACTV in Mr. Gingrich's Congressional District

    While AOW/ACTV was supposed to be non-partisan, two 
memoranda indicate that there was some effort to ensure that 
workshops were set up in Mr. Gingrich's congressional district. 
In a memorandum to Mr. Callaway, dated February 8, 1990, Mr. 
Eisenach wrote:

          An area for immediate attention is ``targets of 
        opportunity''--e.g. Georgia's 6th District, Colorado, 
        and the D.C. area. We need to identify resources to 
        ensure that we maximize our returns in these three 
        areas, and other specific target areas we might add 
        later. In particular, we need to put very high on our 
        agenda the task of identifying a 6th District 
        Coordinator.

(Ex. 22, Eisenach 3811). Similarly, in a March 30, 1990 
memorandum from Mr. Gingrich to Joe Gaylord and Mary Brown, the 
following is written:

          The GOPAC print-out shows only one very tentative 
        (Clay Davis) site in my district. Time is getting short 
        for finding sites and GOPAC needs to have the hosts 
        identified as soon as possible to get materials to them 
        to make the workshops a success.
          Please make this a high priority.

(Ex. 23, GOPAC3 460). Mr. Gingrich did not recall this 
memorandum and said that there was an effort to target the 6th 
District--his congressional district--``only in the sense that 
we hosted [AOW] from there.'' (12/9/96 Gingrich Tr. 19).

                 5. GOPAC's Connection to ALOF and ACTV

    As has been previously discussed, ACTV was a continuation 
of AOW and ALOF used GOPAC's offices and facilities. In his 
interview, Mr. Callaway stated a number of times that GOPAC was 
separate from ALOF. (12/7/96 Callaway Tr. 64, 65-66, 68-69, 
73). A number of documents, however, from 1990 indicate that 
ALOF and ACTV had significant connections to GOPAC.
    In a June 26, 1990 memorandum to Mr. Callaway, Mr. Eisenach 
recounts a discussion the two men had that morning with Mr. 
Gingrich. During that discussion, Mr. Gingrich gave them a 
handout that ``identified three GOPAC/ALOF zones: 1. Local 
Elections, 2. Planning/R&D, 3. Movement.'' (Ex. 24, Eisenach 
4039). The memorandum goes on to discuss how GOPAC and ALOF 
will relate to each other.
    During the Preliminary Inquiry GOPAC produced copies of its 
``Confidential Masterfile Reports'' that were used to keep 
track of contributors. Under the section entitled ``Giving 
History'' the 1990 reports list two entities: GOPAC and ALOF. 
(Ex. 25, GOPAC3 0510). Attached to these reports are copies of 
correspondence from both GOPAC and ALOF to contributors. (Ex. 
25, GOPAC3 0511-0515).
    An August 13, 1990 memorandum from Mr. Callaway to Mr. 
Gingrich lists the three broad things GOPAC does. The third one 
listed is ``Projects such as ACTV, AOW and focus groups.'' (Ex. 
26, Eisenach 4251).<SUP>10
---------------------------------------------------------------------------
    \10\ According to Mr. Callaway, the listing of ACTV was a ``bad 
choice of words.'' (12/7/96 Callaway Tr. 70).
---------------------------------------------------------------------------
    GOPAC's Report to Charter Members dated November 11, 1990, 
includes a section on Community Activism. (Ex. 4, GOPAC3 180-
188). In that section it discusses AOW and ACTV. While it 
states that ACTV is ``legally no longer a GOPAC project,'' it 
goes on to discuss ACTV in terms which indicate that it 
continued to be treated as a GOPAC project. For example it 
states that ``Our mission is to establish ACTV as a new, 
interactive information network.'' (Ex. 4, GOPAC3 181). The 
Charter Member Report is worded in a manner that indicates ACTV 
was considered a GOPAC project. For example, it uses phrases 
like ``Our goal'' with ACTV, ``Our next ACTV program,'' and 
``Our program was hosted by * * *.'' (Ex. 4, GOPAC3 181-182). 
At the end of the report under the heading ``Getting Out the 
Message,'' there is a chart showing the AOW and ACTV programs. 
It then lists how many workshopswere set up for each program 
and what the estimated attendance was for these workshops. (Ex. 4, 
GOPAC3 183).

               6. gopac funding of alof and actv <SUP>11
---------------------------------------------------------------------------

    \11\ There is no evidence that Mr. Gingrich had any significant 
involvement with this level of the financial aspects of the operations 
of ALOF. However, because these facts form part of the basis for a 
recommendation by the Subcommittee that the relevant materials gathered 
during the preliminary inquiry be made available to the Internal 
Revenue Service, the matter is set forth in some detail.
---------------------------------------------------------------------------
    When ALOF began to operate in June 1990 it had less than 
$500 in its bank account. (Ex. 27, CNB 006). It obtained a loan 
for $25,000 from the Central Bank of Denver in late June and 
received some direct contributions. These came from a 
foundation associated with Mr. Callaway, the Family Channel, 
and at least one other GOPAC supporter. (Ex. 28, ALOF 0050). In 
addition, GOPAC loaned ALOF $45,000 in 1990, and $29,500 in 
early 1991 to pay for production expenses. The total of loans 
from GOPAC to ALOF was $74,500. (Ex. 35, ALOF 0030).
    ALOF's last program was broadcast in October 1990. In 1991 
and 1992 it did not engage in any activities. In 1991, Citizens 
Against Government Waste contributed $37,000 to ALOF and Mr. 
Callaway's foundation contributed $10,000. (Ex. 28, ALOF 0090). 
The total, $47,000, was given to GOPAC to be applied to the 
debt. (Ex. 37, CNB 0426, CNB 0428, CNB 0430, CNB 0432). After 
the $47,000 payment, ALOF owed GOPAC $27,500. (Ex. 28, ALOF 
0064).<SUP>12
---------------------------------------------------------------------------
    \12\ The original debt from GOPAC listed on ALOF's tax returns was 
for $45,247. This is not supported by the checks from GOPAC to ALOF 
which only reflect $45,000. This additional $247 continued to be listed 
for the remaining years and was reflected in the ultimate forgiveness 
of a portion of this debt in 1993. It is not clear what the $247 
represents.
---------------------------------------------------------------------------
    In late 1991 and 1992, ALOF received contributions from a 
number of GOPAC supporters totalling $80,000. (Ex. 28, ALOF 
0078). $70,000 of that amount was given to GOPAC. GOPAC's then-
Executive Director, Mr. Eisenach, was involved in soliciting a 
number of these donations.
    On February 27, 1992, Mr. Eisenach wrote to R. Randolph 
Richardson to ask him to become a Charter Member of GOPAC. In 
order to be a Charter Member, a person must contribute at least 
$10,000. In the letter Mr. Eisenach states:

          With respect to foundation funds, it is of course not 
        appropriate for GOPAC to accept 501(c)(3) money. 
        However, Bo Callaway does have a foundation, the 
        Abraham Lincoln Opportunity Foundation (ALOF), which 
        owes GOPAC a substantial sum of money. You might 
        consider a contribution to ALOF, which would enable it 
        to pay down its GOPAC debt, and thus be of enormous 
        help in our efforts to change the Congress in 1992.

(Ex. 29, Eisenach 4652). Mr. Richardson's foundation, the Grace 
Jones Richardson Trust, wrote a $25,000 check to ALOF on April 
14, 1992, and ALOF wrote a $25,000 check to GOPAC on April 23, 
1992. (Ex. 38, CNB 0449, CNB 0445).
    On March 16, 1992, Mr. Eisenach wrote a memorandum to June 
Weiss, GOPAC's Finance Director, concerning Mr. Callaway's 
Charter Member dues. The memorandum states:

          Bo has offered us a choice of (1) $10,000 from him or 
        (2) $20,000 from ALOF. I indicated to him on the phone 
        today I would tend to go for $20,000 over $10,000--in 
        part, frankly, because I think we ought to go ahead and 
        get the ALOF loan repaid and be done with it, as 
        opposed to having it hanging around for another year.

(Ex. 30, Eisenach 3725). On March 23, 1992, Mr. Callaway's 
foundation donated $20,000 to ALOF. (Ex. 39, CNB 0443). On the 
same day, ALOF wrote a check to GOPAC for $20,000. (Ex. 39, CNB 
0447). A letter was sent to Mr. Callaway on ALOF stationery 
thanking him for the contribution. It was signed by numerous 
members of GOPAC's staff. (Ex. 31, GOPAC2 0012).
    Two other GOPAC Charter Members made contributions to ALOF 
which were immediately turned over to GOPAC. (Ex. 40, CNB 0217, 
CNB 0439, CNB 0441, CNB 0459). Handwritten notes relating to 
one of them indicates that a tax-deductible option for his 
contribution to GOPAC was discussed before the contribution to 
ALOF was made. (Ex. 32, GOPAC2 2424-2426).
    As of 1993 ALOF had relocated its offices to Colorado. Its 
Colorado accountant was preparing the tax return for 1992 and 
saw the payments to GOPAC. In November she wrote to Kay Riddle, 
ALOF's Secretary, and asked for invoices from GOPAC to ALOF to 
support these payments. (Ex. 33, Newbill 0119). In December, 
Ms. Riddle wrote to GOPAC's accountant asking for those 
invoices. (Ex. 34, ALOF 0028). Several days later the 
accountant provided Ms. Riddle with a summary memorandum and a 
number of invoices. (Ex. 35, ALOF 0029-0030, ALOF 0027-0028, 
GOPAC3 0811). Some were undated. Some were dated in 1991. All 
concerned activities which were stated to have taken place in 
1990 and there is no evidence that the invoices were written 
contemporaneously with the events for which they billed.<SUP>13
---------------------------------------------------------------------------
    \13\ Because of her assertion of a Constitutional privilege, the 
Subcommittee was unable to interview the accountant for GOPAC and ALOF.
---------------------------------------------------------------------------
    The invoices, along with the previously mentioned loans, 
totaled $160,537.70. This consisted of rent ($12,718.08), 
postage and office supplies ($8,455.08), services of staff and 
consultants ($64,864.54), and the loans ($74,500).<SUP>14 (Ex. 
35, ALOF 0029, ALOF 0027, ALOF 0026, GOPAC3 0811). The time for 
the staff was apportioned to reflect the percentage of their 
work spent on ALOF business. Some of the consultants listed, 
however, did not keep any records reflecting the percentage of 
time they spent on specific projects and did not recall doing 
any work for ALOF. (12/2/96 Hanser Tr. 25; 12/5/96 Mahe Tr. 
31). Records of one consultant did record the time he spent on 
ALOF business, but it was substantially less than the time 
listed in the invoice. (Ex. 35, ALOF 0029; Ex. 36, WGC2-01378-
01379, Eisenach 4276-4277, Eisenach 4302-4303). According to 
Ms. Riddle, she did not attempt to apportion time based on the 
actual hours spent by these people on ALOF business. Instead, 
she said she determined the percentages before any of the 
people had done any work based on her best guess of the time 
they would spend. (12/9/96 Riddle Tr. 69-70).
---------------------------------------------------------------------------
    \14\ In the tax return for ALOF for 1990, Part VII asks, among 
other things, whether ALOF had any transactions with a political action 
committee involving loans, shared facilities, equipment, or paid 
employees. Even though GOPAC was a political action committee the 
return answers ``no'' to all those questions. (Ex. 28, ALOF 0056). The 
accountant for ALOF, who was also the accountant for GOPAC, said that 
she had answered those questions in the negative based on her belief 
that these questions specifically excluded any transactions with 
political action committees. (10/31/96 Gilbert Tr. 18-20). She did not 
discuss this reading of the tax return with anyone at ALOF, but she did 
fill the form out in this way and they signed it without any questions. 
(10/31/96 Gilbert Tr. 21). This same error occurred in the tax return 
for 1991. (Ex. 28, ALOF 0069).
---------------------------------------------------------------------------
    Of the total amount listed on the invoices of $160,537.70, 
ALOF paid GOPAC $117,000 between 1991 and 1992. (Ex. 35, ALOF 
0029). This left a balance of $43,537.70, which, according to 
ALOF's 1993 tax return, was forgiven by GOPAC. (Ex. 28, ALOF 
0089).<SUP>15
---------------------------------------------------------------------------
    \15\ The amount listed on the Return was $43,785. As referred to 
earlier, it is unclear what the $247 difference represents.
---------------------------------------------------------------------------
    According to Kathleen Taylor, a current employee of the 
Speaker's Office and the former Political Services Director for 
GOPAC, the lessons learned from AOW and ACTV were used for the 
Renewing American Civilization course discussed below. (6/28/96 
Taylor Tr. 45). Those lessons were ``[h]ow to get workshops 
sites, how to disseminate information, [and] mass-marketing the 
ideas.'' (6/28/96 Taylor Tr. 45). In the same vein, a letter 
from Mr. Eisenach to Mr. Mescon containing the terms and 
conditions under which WPG would manage the Renewing American 
Civilization course states:

          Among our most significant project management 
        undertakings was the 1990 ``American Opportunities 
        Workshop'' and its successor, American Citizens' 
        Television. Both of these projects bear significant 
        similarities to the project you have asked us to get 
        involved with, ``Renewing American Civilization.'' 
        Thus, we enter this undertaking with both enthusiasm 
        and a full understanding of the enormity and complexity 
        of the undertaking.

(Ex. 41, Mescon 0651).

 III. Summary of Facts Pertaining to ``Renewing American Civilization''

  A. Genesis of the Renewing American Civilization Movement and Course

    In his interview with the Special Counsel, Mr. Gingrich 
said the idea for the course was first developed while he was 
meeting with Owen Roberts, a GOPAC Charter Member and advisor, 
for two days in December 1992. (7/17/96 Gingrich Tr. 11-12, 23-
24; 7/15/96 Gaylord Tr. 23-24; Ex. 42, GOPAC2 2492). Mr. 
Gingrich wrote out notes at this meeting and they were 
distributed to some of his advisors. (Ex. 42, HAN 02103-02125; 
6/26/96 Hanser Tr. 28; 7/15/96 Gaylord Tr. 24-25; 7/12/96 
Eisenach Tr. 108-109).<SUP>16 A review of those notes indicates 
that the topic of discussion at this meeting centered mostly on 
a political movement. The notes contain limited references to a 
course and those are in the context of a means to communicate 
the message of the movement.
---------------------------------------------------------------------------
    \16\ Among the people who received copies of the notes were Mr. 
Hanser, Mr. Gaylord and Mr. Eisenach. In a subsequent memorandum to Gay 
Gaines and Lisa Nelson, as Ms. Gaines and Ms. Nelson were about to take 
over the management of GOPAC in October 1993, Mr. Gingrich described 
the roles each of the three men played in his life as follows:
---------------------------------------------------------------------------

          1. Joe Gaylord is empowered to supervise my activities, set 
        my schedule, advise me on all aspects of my life and career. He 
        is my chief counselor and one of my closest friends. * * *
          2. Steven Hanser is my chief ideas adviser, close personal 
        friend of twenty years, and chief language thinker. * * *
          * * * * * * *

          4. Jeff Eisenach is our senior intellectual leader and an 
        entrepreneur with great talent and determination. * * *
---------------------------------------------------------------------------
    Ex. 43, GDC 11551, 11553).
---------------------------------------------------------------------------
    The movement was to develop a message and then disseminate 
and teach that message. (Ex. 42, HAN 02109). One of the 
important aspects of the movement was the creation of 
``disseminating groups and [a] system of communication and 
education.'' (Ex. 42, HAN 02109). It also sought to 
``professionalize'' the House Republicans by using the 
``message to attract voters, resources and candidates'' and 
develop a ``mechanism for winning seats.'' (Ex. 42, HAN 02110). 
The ultimate goal of the movement was to replace the welfare 
state with an opportunity society, and all efforts had to be 
exclusively directed to that goal. (Ex. 42, HAN 02119). 
Ultimately, it was envisioned that ``a Republican majority 
[would be] the heart of the American Movement * * *''. (Ex. 42, 
HAN 02117).<SUP>17 Mr. Gingrich's role in this movement was to 
be the ``advocate of civilization,'' the ``definer of 
civilization,'' the ``teacher of the rules of civilization,'' 
the ``arouser of those who form civilization,'' the ``organizer 
of the pro-civilization activists,'' and the ``leader 
(possibly) of the civilizing forces.'' (Ex. 42, HAN 02104). In 
doing this, he intended to ``retain a primary focus on elected 
political power as the central arena and fulcrum by which a 
free people debate their future and govern themselves.'' (Ex. 
42, HAN 02104). The support systems for this movement included 
GOPAC, some Republican international organizations, and 
possibly a foundation. (Ex. 42, HAN 02121). There was 
substantial discussion of how to disseminate the message of the 
movement. (Ex. 42, HAN 02109, 02110, 02111). Some of the 
methods discussed for this dissemination included, ``Possibly a 
series of courses with audio and videotape followons''/
``Possibly a text-book (plus audio, video, computer) series''/
``Campus (intellectual) appearances on `the histories' Gingrich 
the Historian applying the lessons of history to public life.'' 
(Ex. 2, HAN 02118). One of the tasks listed for 1993 is 
``Design vision and its communication and communicate it with 
modification after feedback.'' (Ex. 2, HAN 02120). According to 
Mr. Gingrich, the course was to be a subset of the movement and 
was to be a primary and essential means for developing and 
disseminating the message of the movement. (7/17/96 Gingrich 
Tr. 42, 58; 11/13/96 Gingrich Tr. 126-127).
---------------------------------------------------------------------------
    \17\ Mr. Gingrich said that he intended the movement to be 
international in scope. Until some point in 1995, however, its scope 
was only national. (7/17/96 Gingrich Tr. 33).
---------------------------------------------------------------------------
    Another description of the Renewing American Civilization 
movement is found in notes of a speech Mr. Gingrich gave on 
January 23, 1993, to the National Review Institute. (Ex. 44, 
PFF 14473-14477, PFF 38279-38288).<SUP>18 In those notes, Mr. 
Gingrich wrote that ``our generation's rendezvous with history 
is to launch a movement to renew American civilization.'' (Ex. 
44, PFF 14474). He noted that a majority of Americans favor 
renewing American civilization and that ``[w]e are ready to 
launch a 21st century conservatism that will renew American 
civilization, transform America from a welfare state into an 
opportunity society and create a conservative governing 
majority.'' (Ex. 44, PFF 14475). Mr. Gingrich then goes on to 
describe the five pillars of American civilization and the 
three areas where the movement needs to offer solutions.<SUP>19 
He then wrote that if they develop solutions for those three 
areas they ``will decisively trump the left. At that point 
either Clinton will adopt our solutions or the country will 
fire the president who subsidizes decay and blocks progress.'' 
(Ex. 44, PFF 14476). The notes end with the following:

    \18\ This appears to be the earliest example of Mr. Gingrich 
speaking about the Renewing American Civilization movement. A draft of 
this document in Mr. Gingrich's handwriting is attached to the typed 
version of the notes.
    \19\ Although not mentioned in this speech, those five pillars and 
three areas are each separate lectures in what became the course.
---------------------------------------------------------------------------
          We must renew American civilization by studying these 
        principles, networking success stories, applying these 
        success stories to develop programs that will lead to 
        dramatic progress, and then communicating these 
        principles and these opportunities so the American 
        people have a clear choice between progress, renewal, 
        prosperity, safety and freedom within America [sic] 
        civilization versus decay, decline, economic weakness, 
        violent crime and bureaucratic dominance led by a 
        multicultural elite.

          Given that choice, our movement for renewing American 
        civilization will not just win the White House in 1996, 
        we will elect people at all levels dedicated to 
        constructive proposals.

(Ex. 44, PFF 14477). (Emphasis in the original).<SUP>20

    \20\ Two days later Mr. Gingrich delivered a Special Order on the 
House floor concerning Renewing American Civilization. In this speech 
he described a movement to renew American civilization, but did not 
mention the course. He did discuss the five pillars of American 
civilization and the three areas where solutions needed to be 
developed. (Ex. 45, LIP 00036-00045).
---------------------------------------------------------------------------
    In a draft document entitled ``Renewing American 
Civilization Vision Statement,'' written by Mr. Gingrich and 
dated March 19, 1993, he again described the movement in 
partisan terms and emphasized that it needed to communicate the 
vision of renewing American civilization on very large scale. 
(Ex. 46, WGC 00163-00171, WGC 00172-00191). He wrote that 
renewing American civilization will require ``a new party 
system so we can defeat the Democratic machine and transform 
American society into a more productive, responsible, safe 
country by replacing the welfare state with an opportunity 
society.'' (Ex. 46, WGC 00163).

                 B. Role of the Course in the Movement

    Mr. Gingrich was asked about the role of the course in the 
movement. He said that the course was ``the only way actually 
to develop and send * * * out'' the message of the movement. 
(7/17/96 Gingrich Tr. 42). In a later interview, he modified 
this statement to saythat the course was ``clearly the primary 
and dominant method; it was not the only way one could have done it. 
But I think it was essential to do it, to have the course.'' (11/13/96 
Gingrich Tr. 126-127).
    The earliest known documentary reference to the course in 
the context of the movement is in an agenda for a meeting held 
on February 15, 1993, at GOPAC's offices. The meeting had two 
agenda items: ``I. General Planning/Renewing American 
Civilization'' and ``II. Political/GOPAC Issues.'' (Ex. 47, JR-
0000645-0000647). Under the first category, one topic listed is 
``American Civilization Class/Uplink.'' (Ex. 47, JR-0000645). 
Under the second category two of the items listed are ``GOPAC 
Political Plan & Schedule'' and ``Charter Meeting Agenda.'' 
(Ex. 47, JR-0000645). <SUP>21 Attached to the agenda for this 
meeting is a ``Mission Statement'' written by Mr. Gingrich 
which applied to the overall Renewing American Civilization 
movement, including the course. (7/12/96 Eisenach Tr. 248-249; 
7/17/96 Gingrich Tr. 145-146). It states:
---------------------------------------------------------------------------
    \21\ It is not clear whether the meeting was exclusively a GOPAC 
meeting, but at least part of the agenda explicitly concerned GOPAC 
projects. As will be discussed later, GOPAC's political plan for 1993 
centered on Renewing American Civilization. As also discussed below, 
GOPAC's April 1993 Charter Meeting was called ``Renewing American 
Civilization'' and employed breakout sessions for Charter Members to 
critique and improve individual components of the course on Renewing 
American Civilization. (7/17/96 Gingrich Tr. 69-70; 7/12/96 Eisenach 
Tr. 144-146; 7/15/96 Gaylord Tr. 46).

    We will develop a movement to renew American civilization 
using the 5 pillars of 21st Century Freedom so people 
understand freedom and progress is possible and their 
practical, daily lives can be far better.* As people become 
convinced American civilization must and can be renewed and the 
5 pillars will improve their lives we will encourage them and 
help them to network together and independently, autonomously 
initiate improvements wherever they want. However, we will 
focus on economic growth, health, and saving the inner city as 
the first three key areas to improve. Our emphasis will be on 
reshaping law and government to facilitate improvement in all 
of [A]merican society. We will emphasize elections, candidates 
and politics as vehicles for change and the news media as a 
primary vehicle for communications. To the degree Democrats 
agree with our goals we will work with them but our emphasis is 
on the Republican Party as the primary vehicle for renewing 
---------------------------------------------------------------------------
American civilization.

    *Renewing American Civilization must be communicated as an 
intellectual-cultural message with governmental-political consequences. 
(footnote in original)

(Ex. 47, JR-0000646).

    In February 1993, Mr. Gingrich first approached Mr. Mescon 
about teaching the course at KSC. (Ex. 48, Mescon 0278; 6/13/96 
Mescon Tr. 26-27). Mr. Gingrich had talked to Dr. Mescon in 
October or November 1992 about the general subject of teaching, 
but there was no mention of the Renewing American Civilization 
course at that time. (6/13/96 Mescon Tr. 12-14). The early 
discussions with Mr. Mescon included the fact that Mr. Gingrich 
intended to have the Renewing American Civilization course 
disseminated through a satellite uplink system. (Ex. 49, Mescon 
0664; 6/13/96 Mescon Tr. 29-30).
    Shortly before this discussion with Mr. Mescon, in late 
January 1993, Mr. Gingrich met with a group of GOPAC Charter 
Members. In a letter written some months later to GOPAC Charter 
Members, Mr. Gingrich described the meeting as follows:

          During our meeting in January, a number of Charter 
        Members were kind enough to take part in a planning 
        session on ``Renewing American Civilization.'' That 
        session not only affected the substance of what the 
        message was to be, but also how best the new message of 
        positive solutions could be disseminated to this 
        nation's decision makers--elected officials, civic and 
        business leaders, the media and individual voters. In 
        addition to my present avenues of communication I 
        decided to add an avenue close to my heart, that being 
        teaching. I have agreed with Kennesaw State College, * 
        * * to teach ``Renewing American Civilization'' as a 
        for-credit class four times during the next four years.
          Importantly, we made the decision to have the class 
        available as a ``teleseminar'' to students all across 
        the country, reaching college campuses, businesses, 
        civic organizations, and individuals through a live 
        ``uplink,'' video tapes and audio tapes. Our hope is to 
        have at least 50,000 individuals taking the class this 
        fall and to have trained 200,000 knowledgeable citizen 
        activists by 1996 who will support the principles and 
        goals we have set.

(Ex. 50, Kohler 137-138). <SUP>22 During an interview with the 
Special Counsel, Mr. Gingrich said he doubted that he had 
written this letter and said that the remark in the letter that 
the Charter Members' comments played a large role in developing 
the course ``exaggerates the role of GOPAC.'' The letter was 
written to ``flatter'' the Charter Members. (11/13/96 Gingrich 
Tr. 129-130).
---------------------------------------------------------------------------
    \22\ The letter goes on to state that: [L]et me emphasize very 
strongly that the ``Renewing American Civilization'' project is not 
being carried out under the auspices of GOPAC, but rather by Kennesaw 
State College and the Kennesaw State College Foundation. We will not be 
relying on GOPAC staff to support the class, and I am not asking you 
for financial support.
    (Ex. 50, Kohler 138) (emphasis in the original).
---------------------------------------------------------------------------
    In a March 29, 1993 memorandum, Mr. Gingrich specifically 
connects the course with the political goals of the movement. 
The memorandum is entitled ``Renewing American Civilization as 
a defining concept'' and is directed to ``Various Gingrich 
Staffs.'' <SUP>23 The original draft of the memorandum is in 
Mr. Gingrich's handwriting. (Ex. 51, GDC 08891-08892, GDC 
10236-10238). In the memorandum, Mr. Gingrich wrote:
---------------------------------------------------------------------------
    \23\ At the top of this memorandum is a handwritten notation (not 
Mr. Gingrich's) stating: ``Tuesday 4 p.m. GOPAC Mtg.'' (Ex. 51, GDC 
08891).

          I believe the vision of renewing American 
        civilization will allow us to orient and focus our 
        activities for a long time to come.
          At every level from the national focus of the Whip 
        office to the 6th district of Georgia focus of the 
        Congressional office to the national political 
        education efforts of GOPAC and the re-election efforts 
        of FONG <SUP>24 we should be able to use the ideas, 
        language and concepts of renewing American 
        civilization.
---------------------------------------------------------------------------
    \24\ ``FONG'' stands for Mr. Gingrich's campaign organization, 
``Friends of Newt Gingrich.''
---------------------------------------------------------------------------

(Ex. 51, GDC 08891).

    In the memorandum, he describes a process for the 
dissemination of the message of Renewing American Civilization 
to virtually every person he talks to. This dissemination 
includes a copy of the Special Order speech and a one-page 
outline of the course. He then goes on to describe the role of 
the course in this process:

          The course is only one in a series of strategies 
        designed to implement a strategy of renewing American 
        civilization.

(Ex. 51, GDC 08891). Another strategy involving the course is:

          Getting Republican activists committed to renewing 
        American civilization, to setting up workshops built 
        around the course, and to opening the party up to every 
        citizen who wants to renew American civilization.

(Ex. 51, GDC 08892). <SUP>25 Jana Rogers, the Site Host 
Coordinator for the course in 1993, was shown a copy of this 
memorandum and said she had seen it in the course of her work 
at GOPAC. (7/3/96 Rogers Tr. 64). She said that this 
represented what she was doing in her job with the course. (7/
3/96 Rogers Tr. 67-69). Steve Hanser, a paid GOPAC consultant 
and someone who worked on the course, also said that the 
contents of the memorandum were consistent with the strategy 
related to the movement. (6/28/96 Hanser Tr. 42-45).
---------------------------------------------------------------------------
    \25\ The ``party'' referred to in the quote is the Republican 
Party. (11/13/96 Gingrich Tr. 80).
---------------------------------------------------------------------------
    The most direct description of the role of the course in 
relation to the movement to renew American civilization is set 
out in a document which Mr. Gingrich indicates he wrote. (7/17/
96 Gingrich Tr. 162-163). The document has a fax stamp date of 
May 13, 1993 and indicates it is from the Republican Whip's 
Office. (Ex. 52, GDC 10639-10649). The document has three parts 
to it. The first is entitled ``Renewing America Vision'' (Ex. 
52, GDC 10639-10643); the second is entitled ``Renewing America 
Strategies'' (Ex. 52, GDC 10644-10646); and the third is 
entitled ``Renewing American Civilization Our Goal.'' (Ex. 52, 
GDC 10647-10649). Mr. Gingrich said that the third part was 
actually a separate document. (7/17/96 Gingrich Tr. 162-164). 
While all three parts are labeled ``draft,'' the document was 
distributed to a number of Mr. Gingrich's staff members and 
associates, including Mr. Hanser, Ms. Prochnow, Ms. Rogers, Mr. 
Gaylord, Mr. Eisenach, and Allan Lipsett (a press secretary). 
Each of the recipients of the document have described it as an 
accurate description of the Renewing American Civilization 
movement. (6/28/96 Hanser Tr. 48, 53; 7/10/96 Prochnow Tr. 70-
71; 7/3/96 Rogers Tr. 71-75; 7/15/96 Gaylord Tr. 66-67; 7/12/96 
Eisenach Tr. 148-149, 272-275; Lipsett Tr. 30-31). <SUP>26 In 
the first section, Mr. Gingrich wrote:
---------------------------------------------------------------------------
    \26\ Mr. Eisenach apparently sent a copy of this to a GOPAC 
supporter in preparation for a meeting in May of 1993. (7/12/96 
Eisenach Tr. 146-149). In the accompanying letter, Mr. Eisenach said: 
``The enclosed materials provide some background for our discussions, 
which I expect will begin with a review of the Vision, Strategies and 
Goals of our efforts to Renew American Civilization. The class Newt is 
teaching at Kennesaw State College this Fall is central to that effort, 
and GOPAC and the newly created Progress & Freedom Foundation both play 
important roles as well. (Ex. 13, GOPAC2 2337).''

          The challenge to us is to be positive, to be 
        specific, to be intellectually serious, and to be able 
        to communicate in clear language a clear vision of the 
        American people and why it is possible to create that 
        America in our generation.
          Once the American people understand what they can 
        have they will insist that their politicians abolish 
        the welfare state which is crippling them, their 
        children, and their country and that they replace it 
        with an opportunity society based on historically 
        proven principles that we see working all around us.

(Ex. 52, GDC 10643).

    In the second portion of the document, Mr. Gingrich 
describes how the vision of renewing America will be 
accomplished. He lists thirteen separate efforts that fall into 
categories of communication of the ideas in clear language, 
educating people in the principles of replacing the welfare 
state with an opportunity society, and recruiting public 
officials and activists to implement the doctrines of renewing 
American civilization. (Ex. 52, GDC 10644-10646).
    In the third section, Mr. Gingrich explicitly connects the 
course to the movement. First he starts out with three 
propositions that form the core of the course: (1) a refrain he 
refers to as the ``four can'ts;'' <SUP>27 (2) the welfare state 
has failed; and (3) the welfare state must be replaced because 
it cannot be repaired. (Ex. 52, GDC 10647; see also Ex. 54, PFF 
18361, 18365-18367). He then described the goal of the 
movement:
---------------------------------------------------------------------------
    \27\ This refrain goes as follows: ``You cannot maintain a 
civilization with twelve-year-olds having babies, fifteen-year-olds 
shooting each other, seventeen-year-olds dying of AIDS, and eighteen-
year-olds getting diplomas they can't read.''

    Our overall goal is to develop a blueprint for renewing 
America by replacing the welfare state, recruit, discover, 
arouse and network together 200,000 activists including 
candidates for elected office at all levels, and arouse enough 
volunteers and contributors to win a sweeping victory in 1996 
and then actually implement our victory in the first three 
months of 1997.
    Our specific goals are to:
          1. By April 1996 have a thorough, practical blueprint 
        for replacing the welfare state that can be understood 
        and supported by voters and activists.
          We will teach a course on Renewing American 
        civilization on ten Saturday mornings this fall and 
        make it available by satellite, by audio and video tape 
        and by computer to interested activists across the 
        country. A month will then be spent redesigning the 
        course based on feedback and better ideas. Then the 
        course will be retaught in Winter Quarter 1994. It will 
        then be rethought and redesigned for nine months of 
        critical re-evaluation based on active working groups 
        actually applying ideas across the country the course 
        will be taught for one final time in Winter Quarter 
        1996.
          2. Have created a movement and momentum which require 
        the national press corps to actually study the material 
        in order to report the phenomenon thus infecting them 
        with new ideas, new language and new perspectives.
          3. Have a cadre of at least 200,000 people committed 
        to the general ideas so they are creating an echo 
        effect on talk radio and in letters to the editor and 
        most of our candidates and campaigns reflect the 
        concepts of renewing America.
          Replacing the welfare state will require about 
        200,000 activists (willing to learn now [sic] to 
        replace the welfare state, to run for office and to 
        actually replace the welfare state once in office) and 
        about six million supporters (willing to write checks, 
        put up yard signs, or do a half day's volunteer work).

(Ex. 52, GDC 10647-10649). The ``sweeping victory'' referred to 
above is by Republicans. (11/13/96 Gingrich Tr. 86). The 
reference to ``our candidates'' above is to Republican 
candidates. (11/13/96 Gingrich Tr. 90). According to Mr. 
Gingrich, Mr. Gaylord, and Mr. Eisenach, the three goals set 
forth above were to be accomplished by the course. (7/17/96 
Gingrich Tr. 174-179; 7/15/96 Gaylord Tr. 66-67; 7/12/96 
Eisenach Tr. 225; Ex. 55, GOPAC2 2419; Ex. 56, GOPAC2 2172-
2173; Ex. 57, Mescon 0626).
    In various descriptions of the course, Mr. Gingrich stated 
that his intention was to teach it over a four-year period. 
After each teaching of the course he intended to have it 
reviewed and improved. The ultimate goal was to have a final 
product developed by April of 1996. (7/17/96 Gingrich Tr. 109; 
Ex. 56, GOPAC2 2170). An explanation of this goal is found in a 
three-page document, in Mr. Gingrich's handwriting, entitled 
``End State April 1996.'' (Ex. 58, PFF 20107-20109). Mr. 
Gingrich said he wrote this document early in the process of 
developing the movement and described it as a statement of 
where he hoped to be by April 1996 in regard to the movement 
and the course. (7/17/96 Gingrich Tr. 108-115). On the first 
page he wrote that the 200,000 plus activists will have a 
common language and general vision of renewing America, and a 
commitment to replacing the welfare state. In addition, 
``[v]irtually all Republican incumbents and candidates [will] 
have the common language and goals.'' (Ex. 58, PFF 20107). On 
the second page he wrote that the ``Republican platform will 
clearly be shaped by the vision, language, goals and analysis 
of renewing America.'' (Ex. 58, PFF 20108). In addition, 
virtually all Republican Presidential candidates will broadly 
agree on that vision, language, goals and analysis. (Ex. 58, 
PFF 20108). The Clinton administration and the Democratic Party 
will be measured by the vision, principles and goals of 
renewing America and there will be virtual agreement that the 
welfare state has failed. (Ex. 58, PFF 20108). On the last page 
Mr. Gingrich wrote a timeline for the course running from 
September of 1993 through March of 1996. At the point on the 
timeline where November 1994 appears, he wrote the word 
``Election.'' (Ex. 58, PFF 20109). When Mr. Hanser was asked 
about this document he said that the vision, language, and 
concepts of the Renewing American Civilization movement 
discussed in the document were being developed in the course. 
(6/28/96 Hanser Tr. 53). He went on to say that ``End State'' 
was ``an application of those ideas to a specific political 
end,which is one of the purposes, remember, for the course.'' 
(6/28/96 Hanser Tr. 54). There was an appreciation that this would be 
primarily a Republican endeavor. (6/28/96 Hanser Tr. 30).

              C. GOPAC and Renewing American Civilization

    As discussed above, GOPAC was a political action committee 
dedicated to, among other things, achieving Republican control 
of the United States House of Representatives. (11/13/96 
Gingrich Tr. 169; 7/3/96 Rogers Tr. 38-40). One of the methods 
it used was the creation of a political message and the 
dissemination of that message. (7/12/96 Eisenach Tr. 18-19; 6/
28/96 Hanser Tr. 13-14; 7/3/96 Rogers Tr. 36). The tool 
principally used by GOPAC to disseminate its message was 
audiotapes and videotapes. These were sent to Republican 
activists, elected officials, potential candidates, and the 
public. The ultimate purpose of this effort was to help 
Republicans win elections. (6/27/96 Nelson Tr. 21-22; 7/15/96 
Gaylord Tr. 37, 39; 7/3/96 Rogers Tr. 35-36).

    1. GOPAC's Adoption of the Renewing American Civilization Theme

    At least as of late January 1993, Mr. Gingrich and Mr. 
Eisenach had decided that GOPAC's political message for 1993 
and 1994 would be ``Renewing American Civilization.'' <SUP>28 
(Ex. 59, PFF 37584-37590; 11/13/96 Gingrich Tr. 157; 7/17/96 
Gingrich Tr. 61-62, 74; 7/15/96 Gaylord Tr. 35-36, 42-43; 7/3/
96 Rogers Tr. 35, 54-56; 6/28/96 Taylor Tr. 26; 6/27/96 Nelson 
Tr. 34, 46). As described in a February 1993 memorandum over 
Mr. Gingrich's name to GOPAC Charter Members:
---------------------------------------------------------------------------
    \28\ As mentioned above, the earliest mention of the Renewing 
American Civilization course was in February 1993. (Ex. 47, JR-
0000646).

          GOPAC's core mission--to provide the ideas and the 
        message for Republicans to win at the grass roots--is 
        now more important than ever, and we have important 
        plans for 1993 and for the 1993-1994 cycle. The final 
        enclosure is a memorandum from Jeff Eisenach outlining 
        our 1993 program which I encourage you to review 
---------------------------------------------------------------------------
        carefully and, again, let me know what you think.

(Ex. 60, PFF 37569). The attached memorandum, dated February 1, 
1993, is from Mr. Eisenach to Mr. Gingrich and references their 
recent discussions concerning GOPAC's political program for 
1993. (Ex. 59, PFF 37584-37590). It then lists five different 
programs. The fourth one states:

          (4) Message Development/''Renewing American 
        Civilization''--focus group project designed to test 
        and improve the ``Renewing American Civilization'' 
        message in preparation for its use in 1993 legislative 
        campaigns and 1994 Congressional races.

(Ex. 59, PFF 37584) (emphasis in original). Of the other four 
programs listed, three relate directly to the use of the 
Renewing American Civilization message. The fourth--the `` 
`Tory (Franchise) Model' R & D''--was not done. (7/12/96 
Eisenach Tr. 188). This same political program was also listed 
in two separate GOPAC documents dated April 26, 1993. One is 
entitled ``1993 GOPAC POLITICAL PROGRAM'' (Ex. 61, PP001187-
00193) and the other is the ``GOPAC Report to Shareholders.'' 
(Ex. 62, Eisenach 2536-2545). The first page of the Report to 
Shareholders states:

          The challenge facing Republicans, however, is an 
        awesome one: We must build a governing majority, 
        founded on basic principles, that is prepared to do 
        what we failed to do during the last 12 years: Replace 
        the Welfare State with an Opportunity Society and 
        demonstrate that our ideas are the key to progress, 
        freedom and the Renewal of American Civilization.

(Ex. 62, Eisenach 2536).

    In describing the political programs, these documents 
provide status reports that indicate that the Renewing American 
Civilization message is at the center of each project. Under 
``Off-Year State Legislative Races (New Jersey, Virginia)'' the 
project is described as ``Newt speaking at and teaching 
training seminar for candidates at [a June 5, 1993] Virginia 
Republican Convention.'' (Ex. 61, PP001187; Ex. 62, Eisenach 
2540). <SUP>29 As discussed below, that speech and training 
session centered on the Renewing American Civilization message. 
Under ``Ongoing Political Activities'' the first aspect of the 
project is described as sending tapes and establishing a 
training module on Renewing American Civilization and health 
care. (Ex. 61, PP001187; Ex. 62, Eisenach 2540). Under 
``Curriculum Update and Expansion'' the project is described as 
the production of new training tapes based on Mr. Gingrich's 
session at the Virginia Republican Convention. (Ex. 61, 
PP01189; Ex. 62, Eisenach 2541). <SUP>30
---------------------------------------------------------------------------
    \29\ It is not clear whether any work was done in New Jersey 
because that state had a Republican legislature and did not need 
GOPAC's help. (7/15/96 Gaylord Tr. 42).
    \30\ GOPAC later produced two tapes from the session. One was 
called ``Renewing American Civilization'' and was mailed to 8,742 
people. (Ex. 63, JG 000001693). The other was called ``Leading the 
Majority'' and became a major training tool for GOPAC, used at least 
into 1996. (6/27/96 Nelson Tr. 18). Both are based on the Renewing 
American Civilization message and contain the core elements of the 
course. The ``Renewing American Civilization'' tape contains more of 
the RAC philosophy than the ``Leading the Majority'' tape, however, 
both contain the basics of the course that Mr. Gingrich describes as 
the ``central proposition'' or ``heart of the course.'' (Ex. 56, GOPAC2 
2146-2209; Ex. 64, PP000330-000337; Ex. 54, PFF 18361, 18365-18367).
---------------------------------------------------------------------------

  2. GOPAC'S Inability to Fund Its Political Projects in 1992 and 1993

    At the end of 1992, GOPAC was at least $250,000 short of 
its target income (Ex. 65, PFF 38054) and financial problems 
lasted throughout 1993. (7/15/96 Gaylord Tr. 71-72). Because of 
these financial shortfalls, GOPAC had to curtail its political 
projects, particularly the tape program described above. (Ex. 
65, PFF 38054-38060; Ex. 66, WGC 07428; 7/15/96 Gaylord Tr. 71-
72, 76). For example, according to Mr. Gaylord, GOPAC usually 
sent out eight tapes a year; however, in 1993, it only sent out 
two. (7/15/96 Gaylord Tr. 76). One of these was the ``Renewing 
American Civilization'' tape made from Mr. Gingrich's June 1993 
training session at the Virginia Republican Convention (Ex. 63, 
JG 000001693). Accompanying the mailing of this tape was a 
letter from Joe Gaylord in his role as Chairman of GOPAC. That 
letter states:

          Ideas matter, and replacing the welfare state with an 
        Opportunity society is so important that Newt is 
        developing a college course that he'll be teaching this 
        fall on this subject, Renewing American Civilization.
          I wanted you to hear his initial thoughts because it 
        seems to me that we can't answer the question ``What 
        does the Republican Party stand for?'' without 
        considering the issues Newt has raised in this speech.

(Ex. 67, WGC 06215).

    In light of GOPAC's poor financial condition, the 
dissemination of the Renewing American Civilization message 
through the course was beneficial to its political projects. In 
this regard, the following exchange occurred with Mr. Gingrich:

          Mr. Cole: [I]s one of the things GOPAC wanted to have 
        done during 1993 and 1994 was the dissemination of its 
        message; is that correct?
          Mr. Gingrich: Yes.
          Mr. Cole: GOPAC also did not have much money in those 
        years; is that correct?
          Mr. Gingrich: That is correct. Particularly--it gets 
        better in '94, but '93 was very tight.
          Mr. Cole: That curtailed how much it could spend on 
        disseminating its message?
          Mr. Gingrich: Right.
          Mr. Cole: The message that it was trying to 
        disseminate was the Renewing American Civilization 
        message; is that right?
          Mr. Gingrich: Was the theme, yes.

    (11/13/96 Gingrich Tr. 157-158). With respect to whether 
the dissemination of the course benefited GOPAC, the following 
exchange occurred:

          Mr. Cole: Was GOPAC better off in a situation where 
        the message that it had chosen as its political message 
        for those years was being disseminated by the course? 
        Was it better off?
          Mr. Gingrich: The answer is yes.

    (11/13/96 Gingrich Tr. 167).

 3. GOPAC's Involvement in the Development, Funding, and Management of 
               the Renewing American Civilization Course

                           a. GOPAC personnel

    Starting at least as early as February 1993, Mr. Eisenach, 
then GOPAC's Executive Director, was involved in developing the 
Renewing American Civilization course. Although Mr. Eisenach 
has stated that Mr. Gaylord was responsible for the development 
of the course until mid-May 1993 (7/12/96 Eisenach Tr. 71-75; 
Ex. 68, Eisenach Testimony Before House Ethics Committee at Tr. 
142; Ex. 69, PFF 1167), Mr. Gaylord stated that he never had 
such a responsibility. (7/15/96 Gaylord Tr. 15-18). 
Additionally, Mr. Gingrich and others involved in the 
development of the course identified Mr. Eisenach as the person 
primarily responsible for the development of the course from 
early on. (7/17/96 Gingrich Tr. 117, 121; 6/13/96 Mescon Tr. 
30-31; 6/28/96 Hanser Tr. 74-75; 7/3/96 Rogers Tr. 17-18, 22). 
<SUP>31 Several documents also establish Mr. Eisenach's role in 
the development of the course starting at an early stage. One 
document written by Mr. Eisenach is dated February 25, 1993, 
and shows him, as well as others, tasked with course 
development and marketing. (Ex. 70, PFF 16628). A memorandum 
from Mr. Gingrich to Mr. Mescon, dated March 1, 1993, describes 
how Mr. Eisenach is involved in contacting a number of 
institutions in regard to funding for the course. (Ex. 71, KSC 
3491).
---------------------------------------------------------------------------
    \31\ The February 15, 1993, agenda for the meeting where the RAC 
course and other GOPAC issues were discussed, lists Mr. Eisenach as an 
attendee, but does not list Mr. Gaylord as being present. (Ex. 47, JR-
0000645).
---------------------------------------------------------------------------
    Aside from Mr. Eisenach, other people affiliated with GOPAC 
were involved in the development of the course. Mr. Gingrich 
was General Chairman of GOPAC and had a substantial role in the 
course. Jana Rogers served as Mr. Eisenach's executive 
assistant at GOPAC during the early part of 1993 and in that 
role worked on the development of the course. (7/3/96 Rogers 
Tr. 16-17). In June 1993, she temporarily left GOPAC at Mr. 
Eisenach's request to become the course's Site Host 
Coordinator. As a condition of her becoming the site host 
coordinator, she received assurances from both Mr. Eisenach and 
Mr. Gaylord that she could return to GOPAC when she had 
finished her assignment with the course. (7/3/96 Rogers Tr. 12-
16). After approximately five months as the course's Site Host 
Coordinator, she returned to GOPAC for a brief time. (7/3/96 
Rogers 24-25). Steve Hanser, a member of the GOPAC Board and a 
paid GOPAC consultant, helped develop the course. (6/28/96 
Hanser Tr. 10, 19-21). Mr. Gaylord was a paid consultant for 
GOPAC and had a role in developing the course. (7/15/96 Gaylord 
Tr. 15).
    Pamla Prochnow was hired as the Finance Director for GOPAC 
in April 1993. <SUP>32 Ms. Prochnow spent a portion of her 
early time at GOPAC raising funds for the course. (7/10/96 
Prochnow Tr. 14-16; 6/13/96 Mescon Tr. 63-67, 82; Ex. 74, 
Documents produced by Prochnow). <SUP>33 A number of the people 
and entities she contacted were GOPAC supporters. In fact, 
according to Mr. Eisenach, approximately half of the first 
year's funding for the course came from GOPAC supporters. (Ex. 
69, PFF 1168-1169). Some of those people also helped fund the 
course in 1994. (See attachments to Ex. 69, PFF 1252-1277) (the 
documents contain Mr. Eisenach's marks of ``G'' next to the 
people, companies, and foundations that were donors or related 
to donors to GOPAC.))
---------------------------------------------------------------------------
    \32\ During her interviewing process, Ms. Prochnow was provided 
with materials to help her understand the goals of GOPAC. (Ex. 72, 
GOPAC2 0529). Although she has no specific recollection as to what 
these materials were, she believes they were materials related to the 
Renewing American Civilization movement. (7/10/96 Prochnow Tr. 18-19; 
Ex. 73, PP000459-000463; PP00778).
    \33\ Mr. Eisenach has stated that he did not ask Ms. Prochnow to do 
this fundraising work, but rather Mr. Gaylord did. (7/12/96 Eisenach 
Tr. 71, 75; Ex. 65, PFF 1168). However, both Mr. Gaylord and Ms. 
Prochnow clearly state that it was Mr. Eisenach, not Mr. Gaylord, who 
directed Ms. Prochnow to perform the fundraising work. (7/15/96 Gaylord 
Tr. 16, 17; 7/10/96 Prochnow Tr. 14, 73-74; Ex. 71, Letter dated July 
25, 1996, from Prochnow's attorney).
---------------------------------------------------------------------------
    When Mr. Eisenach resigned from GOPAC and assumed the title 
of the course's project director, two GOPAC employees joined 
him in his efforts. Kelly Goodsell had been Mr. Eisenach's 
Administrative Assistant at GOPAC since March of 1993 (7/9/96 
Goodsell Tr. 8, 11), and Michael DuGally had been an employee 
at GOPAC since January 1992. (7/19/96 DuGally Tr. 9-10). Both 
went to work on the course as employees of Mr. Eisenach's 
Washington Policy Group (``WPG'').<SUP>34 In the contract 
between WPG and KSCF, it was understood that WPG would devote 
one-half of the time of its employees to working on the course. 
WPG had only one other client at this time--GOPAC. In its 
contract with GOPAC, WPG was to receive the same monthly fee as 
was being paid by KSCF in return for one-half of the time of 
WPG's employees. (Ex. 76, PFF 37450-37451). The contract also 
stated that to the extent that WPG did not devote full time to 
KSCF and GOPAC projects, an adjustment in the fee paid to WPG 
would be made. (Ex. 76, PFF 37450). Neither Ms. Goodsell nor 
Mr. DuGally worked on any GOPAC project after they started 
working on the course in June of 1993. (7/9/96 Goodsell Tr. 8, 
10-11; 7/19/96 DuGally Tr. 14). Mr. Eisenach said that he spent 
at the most one-third of his time during this period on GOPAC 
projects. (7/12/96 Eisenach Tr. 36-37). No adjustment to WPG's 
fee was made by GOPAC. (7/12/96 Eisenach Tr. 44).<SUP>35
---------------------------------------------------------------------------
    \34\ As discussed earlier, WPG was a corporation formed by Mr. 
Eisenach which had a contract with KSCF to run all aspects of the 
course.
    \35\ The only other person who was involved in the early 
development of the course was Nancy Desmond. She did not work for 
GOPAC, but had been a volunteer at Mr. Gingrich's campaign office for 
approximately a year before starting to work on the course. (6/13/96 
Desmond Tr. 15-16). She continued to work as a volunteer for Mr. 
Gingrich's campaign until July of 1993, when she was told to resign 
from the campaign because of the perceived negative image her two roles 
would project. (6/13/96 Desmond Tr. 37-38; Ex. 77, PFF 38289).
---------------------------------------------------------------------------
    The February 15, 1993, agenda discussed above also gives 
some indication of GOPAC's role in the development of the 
Renewing American Civilization course. (Ex. 47, JR-0000645-
0000647). Of the eight attendees at that meeting, five worked 
for or were closely associated with GOPAC (Mr. DuGally, Mr. 
Eisenach and Ms. Rogers were employees, Mr. Hanser was a member 
of the Board and a paid GOPAC consultant, and Mr. Gingrich was 
the General Chairman). Furthermore, the agenda for that meeting 
indicates that GOPAC political issues were to be discussed as 
well as course planning issues. Two of the GOPAC political 
issues apparently related to: (1) the political program 
described in the February 1, 1993,memorandum which lists four 
of GOPAC's five political projects as relating to Renewing American 
Civilization (Ex. 60, PFF 37569-37576), and (2) GOPAC's Charter Meeting 
agenda entitled ``Renewing American Civilization.'' As discussed below, 
this Charter Meeting included breakout sessions to help develop a 
number of the lectures for the course, as well as GOPAC's message for 
the 1993-1994 election cycle. (Ex. 78, PP00448-PP000452). As Mr. 
Gingrich stated in his interview, his intention was to have GOPAC use 
Renewing American Civilization as its message during this time frame. 
(7/17/96 Gingrich Tr. 74; 7/3/96 Rogers Tr. 54-56).
    In 1993 Mr. Eisenach periodically produced a list of GOPAC 
projects. The list is entitled ``Major Projects Underway'' and 
was used for staff meetings. (7/12/96 Eisenach Tr. 213; 7/15/96 
Gaylord Tr. 79-80; 6/28/96 Taylor Tr. 43-44). Items related to 
the Renewing American Civilization course were listed in 
several places on GOPAC's project sheets. For example, from 
April 1993 through at least June 1993, ``Renewing American 
Civilization Support'' is listed under the ``Planning/Other'' 
section of GOPAC's projects sheets. (Ex. 79, JG 000001139, JG 
000001152, JG 000001173, JG 000001270). Another entry which 
appears a number of times under ``Planning/Other'' is ``RAC 
Pert Chart, etc.'' (Ex. 79, JG 000001152, JG 000001173, JG 
000001270). It refers to a time-line Mr. Eisenach wrote while 
he was the Executive Director of GOPAC relating to the 
development of the various components of the course, including 
marketing and site coordination, funding, readings, and the 
course textbook. (Ex. 80, PFF 7529-7533; 7/12/96 Eisenach Tr. 
212-213). Finally, under the heading ``Political'' on the May 
7, 1993, project sheet, is listed the phrase ``CR/RAC Letter.'' 
(Ex. 79, JG 000001152). This refers to a mailing about the 
course sent over Mr. Gingrich's name by GOPAC to approximately 
1,000 College Republicans. (Ex. 81, Mescon 0918, 0915, 0914 and 
Meeks 0038-0040; 7/15/96 Gaylord Tr. 81-82).

        b. Involvement of GOPAC charter members in course design

    As discussed earlier, Mr. Gingrich had a meeting with GOPAC 
Charter Members in January 1993 to discuss the ideas of 
Renewing American Civilization. (11/13/96 Gingrich Tr. 132). 
According to a letter written about that meeting, the idea to 
teach arose from that meeting. In April 1993, GOPAC held its 
semi-annual Charter Meeting. Its theme was ``Renewing American 
Civilization.'' (Ex. 78, PP000448-PP000452). Mr. Gingrich gave 
the keynote address, entitled ``Renewing American 
Civilization,'' and there were five breakout sessions entitled 
``Advancing the Five Pillars of Twenty-first Century 
Democracy.'' (Ex. 78, PP000449). Each of the breakout sessions 
was named for a lecture in the course, and these sessions were 
used to help develop the content of the course (11/13/96 
Gingrich Tr. 164-165; 7/17/96 Gingrich Tr. 69-70; 7/12/96 
Eisenach Tr. 144-146; 7/15/96 Gaylord Tr. 46) as well as 
GOPAC's political message for the 1993 legislative campaigns 
and the 1994 congressional races. (11/13/96 Gingrich Tr. 164-
165; Ex. 62, Eisenach 2540). As stated in a memorandum from Mr. 
Eisenach to GOPAC Charter Members, these breakout sessions were 
intended to ``dramatically improve both our understanding of 
the subject and our ability to communicate it.'' (Ex. 82, 
Roberts 0045-0048).

                        c. Letters sent by GOPAC

    In June of 1993, GOPAC sent a letter over Mr. Gingrich's 
signature stating that ``it is vital for Republicans to now 
DEVELOP and put forward OUR agenda for America.'' (Ex. 83, 
PP000534) (emphasis in original). In discussing an enclosed 
survey the letter states:

          It is the opening step in what I want to be an 
        unprecedented mobilization effort for Republicans to 
        begin the process of replacing America's failed welfare 
        state.
          And the key political component of that effort will 
        be an all-out drive to end the Democrat's 40 year 
        control of the U.S. House or Representatives in 1994!

(Ex. 83, PP000535).<SUP>36 The letter then states that it is 
important to de