Contributions to House speaker to be reviewed

January 30, 1995|By Patrick J. Sloyan | Patrick J. Sloyan,Newsday

WASHINGTON -- Last August, Rep. Newt Gingrich learned that a subsidiary of Johnson & Johnson faced a federal roadblock to sales of a new product worth an estimated $300 million a year.

The Food and Drug Administration had yet to approve marketing of a home AIDS test kit. The kit would permit Americans to make a private determination that a blood sample contained the virus that leads to the fatal immune deficiency disease.

Direct Access Diagnostics, a Rahway, N.J., subsidiary of Johnson & Johnson, was the lead applicant for FDA marketing approval. The firm's Washington consultant, Steve Hoffman, explained the situation to Mr. Gingrich during a meeting in August, according to the Georgia Republican's aides. Mr. Hoffman said he merely supplied details to Mr. Gingrich.

Four days later, on Sept. 2, Mr. Gingrich threw the weight of his Republican leadership into the issue, complaining in a fiery letter to President Clinton's chief of staff, Leon E. Panetta, about "stonewalling and needless delay" by the FDA.

A week later, sources said, Elliott Millenson, president of Direct Access, made a personal contribution to Mr. Gingrich of almost $5,000. In December, after it was certain that Mr. Gingrich would become speaker of the House of Representatives, Direct Access made a contribution that sources with the company said was about $25,000.

But the money did not go directly to Mr. Gingrich or his political campaign. Instead, the estimated $30,000 went to a tax-exempt organization in Washington, the Progress and Freedom Foundation, run by a Gingrich associate. The donation entitled Direct Access and its president to a tax deduction.

In the past two years, the Progress and Freedom Foundation and its president, Jeffrey Eisenach, have funneled $432,500 into Mr. Gingrich's weekly college lecture series broadcast nationwide. Gingrich insists that the lectures are educational, not political.

But Democratic critics contend that the lecture series is a taxpayer-subsidized partisan program that violates federal tax and campaign laws with largely secret contributions from corporations and individuals.

Although he has termed such charges "nonsense," Mr. Gingrich has agreed to a review of such allegations by a special House ethics committee. Five Republicans and five Democrats led by Rep. Nancy Johnson, a Connecticut Republican, will decide whether a full-fledged investigation is warranted.

The panel will be resuming a review begun last fall of charges brought by Ben Jones, a former Democratic congressman defeated by Mr. Gingrich in November. Mr. Jones amended his original charges against Mr. Gingrich last week to include details of a $4.5 million book advance from HarperCollins and a meeting between Mr. Gingrich and Rupert Murdoch, owner of the publishing house.

Under pressure, Mr. Gingrich decided to forgo the advance but will accept customary royalties.

"Mr. Gingrich seems to have an addiction to secrecy and back room deals," said House Democratic Whip David Bonior of Michigan.

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