Gingrich Paid $60,000 for Speech Praising Private Equity
Newt Gingrich, the Republican presidential candidate who has criticized rival Mitt Romney for his role in the buyout business, was paid more than $60,000 two years ago to deliver a speech that extolled the private-equity industry, according to the meeting’s organizer.
“This gentleman praised private equity more fulsomely than I could ever do it,” Paul Levy, managing director at JLL Partners Inc., said in an interview on Bloomberg Television’s “InsideTrack” today. “He was great. He gave a great evening. Everybody had fun. He fielded a lot of questions. He gave us a lot of time. Nobody praised private equity, risk-taking capital more fulsomely than Newt Gingrich.”
Gingrich received $60,750 from JLL through a contract with the Washington Speakers Bureau, according to a copy of the agreement obtained by Bloomberg News. The fee included the “cash equivalent” of two first-class plane tickets, meals and lodging at the Mandarin Oriental, a midtown New York hotel that boasts of its “breathtaking Central Park views.”
The contract obligated Gingrich to deliver an hour-long presentation with a question-and-answer period and join the firm for dinner at an upscale steakhouse. He spoke to almost 100 people including firm executives, chief executive officers of JLL’s portfolio companies and other investors who work with the firm.
Roils Primary Race
Levy’s revelation set off a new wave of criticism of the former U.S. House speaker in the primary campaign in South Carolina, where Gingrich is raising questions about front-runner Mitt Romney’s term as chief executive officer of private-equity firm Bain Capital LLC.
The Romney campaign sent a news release highlighting the Bloomberg TV interview with Levy. In a morning conference call with reporters, some of Gingrich’s former House colleagues warned against his nomination, saying he is a “negative force” whose actions and comments would deflect attention from President Barack Obama’s record in the general election.
“When the focus is Newt, the Republican Party loses,” said Susan Molinari, a former New York representative who is backing Romney. “He has not changed and become more disciplined.”
Former Missouri Senator Jim Talent, another Romney supporter who also served in the House, said Gingrich has “attacked Bain Capital in a way that he’s admitted was factually inaccurate” and is “using the language of the left.”
Gingrich said in an interview that there’s no discrepancy between his comments during the campaign and his remarks to the JLL annual meeting in 2009. He said private-equity investors like Levy, who see his critique of Bain as an attack against their industry, are “interpreting it wrong.”
His campaign spokesman, R.C. Hammond, said the former Georgia congressman takes issue with Romney’s work at Bain, not the entire industry.
“Newt isn’t going out and attacking capitalism,” he said. “What we’ve pointed out is the character and leadership that Romney made as the head of a company.”
Gingrich has cast Romney as an executive more interested in maximizing profits than creating or retaining jobs.
“What I’ve done is raised questions about the judgment and values of one person who’s running for president,” Gingrich told reporters in Winnsboro, South Carolina, today. “That should not be confused with critiquing capitalism.”
Speaking to a gathering of business leaders yesterday in Columbia, South Carolina, he characterized the Bain business model as “exploitive” and “not defensible.”
“I’m proud of real capitalists,” he said. “But not particularly proud of people who go in, leverage the game, borrow the money, leave the debt behind and walk off with all the profits.”
In a 28-minute online film released last week, Gingrich supporters described Romney as a financier “more ruthless than Wall Street.” The film highlights stories of people who say they lost their jobs after their companies were acquired by Bain.
A Bloomberg News review of the advertisement, called “When Mitt Romney Came to Town,” found that it at times stretches the truth and takes some reports out of context or selectively edits them. The film was funded by Winning Our Future, a pro-Gingrich political action committee.
Compared to Obama
Romney today compared Gingrich to Obama at a rally in Spartanburg, South Carolina, saying the former House speaker’s attacks on Romney’s record at Bain matched Obama’s hostility toward business.
“I was disappointed over the last couple of weeks seeing one of my opponents attacking free enterprise just like the president was,” Romney said at Wofford College. “That’s not the role of the Republican Party. That makes us sad.”
Gingrich has his own private-equity experience. In 1999, upon leaving the House, Gingrich joined the advisory board of Forstmann, Little & Co., the New York-based buyout firm.
Levy said later in an e-mail to Bloomberg News that Gingrich’s response to his comments have “taken hypocrisy to a new level.”
Buyout firms are trying to avoid a political taint similar to what the oil and gas business encountered during former President George W. Bush’s election campaign in 2000, when his Democratic opponent, Al Gore, highlighted Bush’s relationship with the industry.
As Romney, the former governor of Massachusetts, and Bain continue to come under attack, the private-equity industry plans to counter perceptions that firms profit at the expense of workers, according to a person familiar with the plans.
The Private Equity Growth Capital Council, the industry’s lobbying group in Washington, will start a Web-based campaign at the end of the month with testimonials of people who say private equity has helped their businesses, the person said. Members of the council include Blackstone Group LP (BX), Carlyle Group and KKR & Co.
In the Bloomberg TV interview, Levy, who founded the private-equity firm JLL in 1988, urged more managers in the industry to speak out against the criticism from Gingrich and Romney’s other opponents.
“These people, I think, should step forward and speak to their achievements and say, by the way, not every deal goes well,” he said.
To contact the reporters on this story: Lisa Lerer in Winnsboro, South Carolina at firstname.lastname@example.org; Devin Banerjee in New York at email@example.com; Erik Schatzker in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Christian Baumgaertel at email@example.com