Newt’s new gigs, following the Sandy money, and hedge-fund matchmakers

By Steven Brill
January 29, 2013

1.     Newt’s new gigs:

One of my favorite side stories of last year’s presidential campaign had to do with the details that emerged about all the money Newt Gingrich had been making in recent years from speeches, books and lobbying (which he insisted was merely consulting or “advocacy”). As I wrote at the time , Gingrich’s release of his tax returns (when he was taunting Mitt Romney to do the same) was so intriguing because most of his $3.1 million in 2011 income was derived from something called Gingrich Holdings Inc. This was the clearinghouse for his various activities, and it presented him ample opportunity to get tax breaks by routing all kinds of personal expenses through his private corporation. It was an only-in-Washington success story.

With his losing campaign having diminished whatever luster Gingrich might have had, it would be interesting to see whether and how he and his wife, Calista, have revived Newt Inc. Washington seems to be a place where even the politicians pushed furthest to the sidelines can make a good living off of who they once were, who they know and, in the case of books and speeches, their true believers. Gingrich post-2012 puts that theory to a new and interesting test.

What kind of gigs has the former speaker lined up? Where has he been making the rounds trying to land “consulting” retainers? Who’s turned him down and who’s signed him up?

And while we’re contemplating the fate of pols pushed offstage, can’t someone get the scoop on what Mitt Romney is up to?

2. Watching the Sandy money:

With the Senate following the House of Representatives this week in passing a $50 billion aid package aimed at repairing the damage done by hurricane Sandy, it’s time for the New York and New Jersey press to gear up and follow all that money. It’s the kind of story the New York Post is usually good at, but everyone should be on the case.

The lowest-hanging fruit for scoops on waste and even fraud is likely to come from watching the money that goes to the Port Authority of New York and New Jersey, which, as I’ve written before, would perpetually get first prize as the country’s most bureaucratic, slothful and generally incompetent government agency.

3. Did the 1994 assault weapons ban work?

In the renewed debate over gun control, we’ve seen both sides argue about the impact of the 1994 law banning most assault weapons and large-capacity ammunition magazines. News stories have quoted gun control advocates as saying the law, which was allowed to “sunset” in 2004, worked and opponents as saying it didn’t. But so far, I’ve only seen stories that present vague arguments from either side.

Although California Senator Diane Feinstein’s proposal to revive the ban, announced last week, purports to plug many of the old law’s loopholes, it no doubt has some new loopholes of its own and, as with the old law, will not be able to do much about all the assault weapons and magazines already out there. So someone ought to dig in and find the best objective research to tell us whether the old law worked and, therefore, whether we’re engaged in a debate over a new ban whose outcome will matter.

4. Hedge fund matchmakers

At the center of the investigation into alleged insider trading by hedge funds, such as Steven Cohen’s SAC Capital, is a special breed of consultant who operates “expert networks” that link stock-pickers like Cohen and his team with industry experts. The most prominent of these networks  is run by Gerson Lehrman Group. The firm has not been accused of any wrongdoing in the SAC investigation, but it did introduce SAC to an expert medical doctor who has admitted to selling an SAC analyst inside information about the status of a new drug going through a testing and approval process.

At the time of the SAC analyst’s arrest last November on charges that he paid[r5]  the doctor, the New York Times  reported that “the transfer of information was made possible by Gerson Lehrman, which had played matchmaker. If this expert network did not exist, it is not clear that Mr. Martoma and Dr. Gilman would ever have found each other.”

Gerson Lehrman’s website says it provides “access to primary research for a wide range of companies: financial and investment institutions, life science companies, the Fortune 1000 and entrepreneurs around the globe.” That seems innocent enough. And to underscore the firm’s commitment to what it calls “best practices,” the website features a section on “Standards” that outlines a set of rules designed to make sure the paid members of its expert network, called “Council Members,” do not provide information on “subject matter that a Council Member cannot discuss.”

Still, the same Times article opined that “the expert network business model is inherently perilous,” citing the case of another expert network that closed its doors after being caught up in a different insider trading case.

So, I’m wondering whether amid the publicity swirling around the SAC allegations, Gerson Lerhman and its competitors have done anything to change how they operate, and whether business is down because their hedge fund clients have gotten spooked.

PHOTO: Former U.S. House Speaker Newt Gingrich and wife Callista Gingrich arrive for the presidential inauguration on the West Front of the U.S. Capitol in Washington January 21, 2013.   REUTERS/Win McNamee/Pool

2 comments

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Your comment re the Port Authority is so correct. Along with that throw in the MTA and most of the super agencies in NY/NJ area that are now more for patronage and political favors. Interesting is that the original charter of the Port Authority was to build a freight rail tunnel between NJ and Long Island since in the 1930s the ship traffic was insufficient to haul the train cargo.

Then came the truck and everyone forgot about port congestion only to soon find the roads of Manhattan, Staten Island and the Bronx becoming one big semi trailer parking lot. for years politicians talk up the idea of a freight tunnel – but nothing is done except hire more consultants to evaluate the “feasibility”.

Maybe we will soon see the Port Authority and MTA hiring Newt Inc. to evaluate the efficiency of Sandy Billions expenditure. That’s worth a couple of million to Newt….

Posted by Acetracy | Report as abusive

I live in NJ, and I’m incredibly curious to see where that $50 billion ends up. While I’m happy they’re finally getting aid, I’m also happy it took a while – only because part of the reason it took so long was because of the ridiculous way it was going to be divided. I hope, in the name of all that is good, they figure out how to help the PEOPLE who are still homeless before anything else…

Posted by DonaCollins | Report as abusive