(Steven Brill is a Reuters columnist but his opinions are his own.)
By Steven Brill
Jan 29 (Reuters) - 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?
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.
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.
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 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.
Steven Brill, the author of Class Warfare: Inside the Fight To Fix America's Schools, has written for magazines including New York, The New Yorker, Time, Harpers, and The New York Times Magazine. He founded and ran Court TV, The American Lawyer Magazine, ten regional legal newspapers, and Brill's Content Magazine. He also teaches journalism at Yale, where he founded the Yale Journalism Initiative. Steven Brill