Newt Gingrich's once-lucrative constellation of consulting shops and nonprofits has fallen deeply into debt, Reuters reports.
Gingrich Group LLC (it operated as the Center for Health Transformation), a consulting firm whose previous endorsement of an individual health insurance mandate exposed Gingrich to charges of hypocrisy, filed for bankruptcy in April after reporting between $1 million and $10 million in unpaid debts.
Reuters quotes a former Gingrich Group LLC managing partner, Nancy Desmond, who said the organization began rapidly losing clients after Gingrich began laying the groundwork for a presidential run in 2010. Gingrich is still owed $6.4 million for selling his 63 percent stake, but the Gingrich Group LLC's current owners have been unable to pay him back. Revenue at the company has plummeted, dropping from about $7 million in 2010 to on pace for less than $1.2 million this year.
There were a lot of stories that began to appear in the paper, and [members] didn't necessarily want to be mentioned in a political story because they weren't political people, Desmond told Reuters in describing how Gingrich's decision to run for president -- a process that included disavowing policy stances like the individual mandate -- alienated former clients. They were business people.
Steve Hanser, who was a colleague of Gingrich's when the former Speaker taught history at the University of West Georgia and owns a minority share, told Reuters that the firm suffered when Gingrich distanced himself, depriving clients of a key attraction.
Much of Gingrich's net worth is tied up in the $6.4 million still due to him. Under the terms of Gingrich selling his stake, the Center for Health Transformation was required to pay Gingrich Productions, owned by Newt's wife, Callista, monthly installments of $100,000. So far, the payments have not been forthcoming.
Gingrich's presidential campaign is also $4.7 million in debt, according to the most recent Federal Election Commission filing. Gingrich ended his presidential bid in early May.