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Spokane, Washington  Est. May 19, 1883

Gingrich Told To Not Write Off $300,000 Ethics Fine

The Washington Post

Rep. Benjamin L. Cardin of Maryland, the top Democrat on the House ethics committee that suggested the $300,000 financial penalty against House Speaker Newt Gingrich, R-Ga., cautioned the speaker Thursday against trying to take a tax deduction for the sum.

“Creative use of the tax code created the problem in the first place,” said Cardin, who has since left the ethics panel. “I just hope he doesn’t put himself in a position once again to cause embarrassment.”

Gingrich admitted breaking House rules by not ensuring that financing projects, including a college course, with charitable contributions would not run afoul of tax law. Gingrich’s attorney is exploring whether the resulting penalty could be deducted from his taxable income as a business expense.

Thursday, the speaker sought to put that in the context of his decision not to use contributions to pay the sum. “I am personally paying $300,000, and I think that is, in and of itself, a fairly remarkable commitment,” he said. “We’re looking at all of the legal and ethical implications from every angle.”

Taxpayers may deduct expenses related to their professions so long as the money is not designated to pay a fine or a penalty. Gingrich has consistently referred to the sum as a reimbursement to the ethics committee for part of the costs of its investigation of him. House Democrats call the payment a fine and even Rep. Nancy L. Johnson, R-Conn., who was chairman of the ethics panel, has called it a fine.

The ethics committee’s report on the speaker’s case offers support to each, calling “a payment reimbursing the House for some of the costs of the investigation in the amount of $300,000” part of “the appropriate sanction.”

Meanwhile, Democrats are trying to use this latest matter to profit - literally. The party’s House campaign committee set up a telephone line where people, for 99 cents a call, may express their views about whether Gingrich should take a tax deduction. Proceeds go to fund Democratic House candidates.