Money and Democracy

Published — August 26, 2011 Updated — May 19, 2014 at 12:19 pm ET

527 group waned after Gingrich campaign imploded in June

Introduction

The Newt Gingrich money machine that raised $52 million in just four years to promote his ideas and image, American Solutions for Winning the Future, has quietly gone belly up.

Gingrich set up the 527 group in 2007, but it began to lose fundraising steam almost as soon as the former House Speaker launched his presidential bid in May, Joe Gaylord, the group’s chairman told iWatch News. It closed its doors early last month, an apparent casualty of Gingrich’s beleaguered presidential drive.

To make his bid for the GOP nomination, Gingrich had to sever his ties with the 527, as federal election law requires for candidates, and that proved to be a big blow to its growth and ongoing operations, Gaylord said.

According to a filing with the IRS on August 18, the 527 spent $2.9 million in the first six months of the year, but only raised $2.4 million in the same period.

A close political confidant to Gingrich since 1989, Gaylord said that the group shuttered its spacious K Street offices on July 7, when the last six staffers were laid off. At one point, the group employed more than three times that number.

Paige Bray, a fundraiser for the 527, notified Gingrich of the decision to close the operation, said Gaylord. Gingrich had no role in the matter, he added.

In the two-year 2010 election cycle, American Solutions posted receipts of $28.2 million and spent $28.4 million, according to the Center for Responsive Politics. Last year it was the biggest such committee in the country.

Gingrich used the once high-flying 527 to boost his political profile and to travel for speeches which helped lay the groundwork for his campaign this year. The 527 could accept unlimited corporate and individual checks, and was a magnet for conservative donors and corporate interests whose causes Gingrich often embraced.

Las Vegas casino mogul Sheldon Adelson was the group’s most generous donor, pouring $7 million into its coffers. The 527 also received hefty donations from coal and other energy interests. Last year, Peabody Energy, the nation’s largest coal company, donated $550,000 to the group, according to CRP.

The group was well known in conservative policy circles for promoting a “Drill Here, Drill Now,” drive to increase the use of domestic energy resources and was invariably a sharp critic of government regulations. This year, the group created a website called noMoreObamaCare.com to spur GOP lawmakers to repeal the sweeping health care reforms that the administration signed into law in 2010.

One election-law expert wasn’t surprised by the group’s quick demise. “Some political organizations are like one man shows on Broadway,” quipped lawyer Larry Noble of Skadden Arps Slate Meagher & Flom in an interview with iWatch News. “Once the stars leave, the shows often fold.”

The group also had a PAC called American Solutions that formally terminated on August 8. The PAC began the year with $64,716 dollars in its coffers and raised another $57,736. By the end of June, it had spent $122,453 leaving the PAC’s cupboards bare, according to Federal Election Commission records.

When Gingrich cut his ties with the group in May, Gaylord took on added tasks and vowed in an interview with Politico to continue. Gaylord told the publication that the group’s “work goes on—with or without Gingrich…I think we are going to be a force for change and transformation in America.”

Some GOP strategists and lobbyists familiar with the group say that the Gingrich “brand” was tarnished by his lackluster presidential drive, an effort that didn’t seem to help his 527’s fortunes. Gingrich’s bid was battered in June by the departures of top staff who complained about the campaign’s lack of direction and Gingrich’s lack of focus. Among those who exited were campaign manager Rob Johnson, his long-time spokesman Rick Tyler, and a few fundraisers.

And the campaign received a big blow when Politico reported that several years ago Gingrich carried as much as $500,000 in debt to Tiffany’s, the tony jewelry store, where he bought expensive items for his wife, Callista.

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