There were many during former Speaker of the House Newt Gingrich (R-GA)’s ill-starred run for the presidential nomination who speculated that the candidate was never serious about running, but was rather using the platform to sell books and make money. If that was actually the case, then that plan was as spectacularly unsuccessful as his presidential run, because, according to Reuters, the Georgia politician’s private ventures are rapidly going bankrupt.
Bankruptcy hearings in Atlanta on May 9 showed that not only is the erstwhile candidate in personal debt to the tune of $4.8 million, the health care consulting company he part-owned is now mired in debt to a private plane company, its landlord and other creditors. His political nonprofit group American Solutions for Winning the Future went bankrupt in July, 2011, mired in debt and unable to attract clients.
In what Reuters called a “remarkable reversal of fortune of the half-dozen organizations associated with Gingrich,” the decline began shortly after the former Speaker announced his candidacy for the Republican nomination. As far back as 2010, Center for Health Transformation head Nancy Desmond said, corporate clients, some of whom paid as much as $200,000 per year in dues to belong to the organization, began to pull away for fear of being perceived as political.
“There were a lot of stories that began to appear in the paper,” she said, “and (members) didn’t necessarily want to be mentioned in a political story because they weren’t political people. They were business people.”
Last year, Politico noted that as of March, Gingrich had yet to disengage himself from the snarl of interwoven money-making schemes in which he was involved. “Untangling the web of business and political groups Gingrich is involved in has proven complicated,” wrote Politico‘s Alexander Burns, “and he’s not in a position just yet to take a more formal step toward running.”
Part of that process involved having his three partners at the health consulting firm buy him out of his share of the company for $6.4 million. Gingrich was able to convince Desmond, longtime political adviser Joe Gaylord and retired professor and longtime friend Steve Hanser that in spite of the fact that clients were leaving and revenues plunging, the firm would somehow recoup and become financially solvent again.
Such was not the case. In spite of pulling in some $59 million since it opened in 2003, by March of this year the company was no longer able to pay the rent on its Atlanta facility and was forced to close its doors.
“In April it declared bankruptcy, leaving almost $600,000 in debts to outside vendors,” Reuters reports, “The company also owes the $6.4 million to Gingrich and his wife, Callista, neither of whom could be reached for comment.”
Among its debts, the center owes $84,000 to creditor McKenna Long, $31,000 to private airline Moby Dick Airways, Ltd. (Gingrich personally owes Moby Dick $6.5 million), $894 to the state of Missouri in income taxes, $283,000 to boutique political lender Chain Bridge Bank and nearly $55,000 to Atlanta luxury hotels the St. Regis and the Ritz Carlton.
The May 9 hearing was the first step in a reorganization and repayment process to determine which creditors will be repaid and how much. The Center for Health Transformation’s combined assets, including office supplies and thousands of unsold books and films, come to an estimated $78,000.
(Screen-grab of Newt Gingrich via CNN video)