NEWT'S CASH MACHINE

By Richard Lacayo

LAST WEDNESDAY WAS A BIG night for House Speaker Newt Gingrich. About 75 supporters were gathered at the Washington mansion of auto dealer Mandell Ourisman and his wife Mary, a former official of GOPAC, the political-action committee Gingrich headed until last May. The occasion was a fund raiser for his newest PAC, called Monday Morning. For a couple of pleasant hours the guests picked at their beef tenderloin, admired the Ourismans' baby grand piano and chatted up the most powerful man in Congress. At $1,000 a couple, the posh event yielded more than $30,000 in campaign money for G.O.P. congressional candidates.

It was a big night for one other reason. Earlier Gingrich had got word that the House ethics committee had made a crucial decision. After months of wrangling on a list of complaints brought against him by Democrats, the 10-member panel, which is evenly divided between the two parties, had settled on a good news/bad news outcome. By a unanimous vote, it cleared Gingrich of three charges and slapped his wrist on three others. And of the $4.5 million advance for his recent book that he accepted, then declined, from the publishing company owned by Rupert Murdoch, a media magnate with magnate-style business before Congress, the committee declared it unseemly but within the rules.

What mattered, however, was the committee's decision to appoint an outside counsel to investigate whether Gingrich improperly used tax-deductible donations to fund the videotaped college course Renewing American Civilization, that he taught until earlier this year. The crowd at the Wednesday fund raiser applauded loudly when Gingrich told them the six charges had finally been resolved. As for the seventh, he said, it was a "technical'' matter. That line was echoed the next day by other members of the G.O.P. leadership. House Republican Conference chairman John Boehner of Ohio faxed around a 1994 letter by a former irs commissioner who stated that in his view, there was no problem.

Democrats prefer to remember the 1988 investigation of House Speaker Jim Wright, whose chief accuser was Gingrich. Then too the ethics committee dismissed nearly all complaints against Wright but asked for a special counsel to investigate the remaining one. Eventually the counsel requested and was granted the authority to look wherever he felt he needed to. More harmful disclosures ensued. Wright resigned. Calculating the prospects for Gingrich, House minority whip David Bonior of Michigan assumed his most sepulchral tones: "As time passes, the gravity of the situation will set in."

The ethics committee decision came a week after the Federal Election Commission released thousands of pages of documents in a civil lawsuit charging, among other things, that GOPAC spent $250,000 to fund Gingrich's re-election at a time when it was barred by law from involvement in federal races. House Democrats plan to use the documents as a basis for at least one new complaint before the ethics committee, including one that GOPAC donors got return favors from Gingrich. None of this will help stay the collapse of the Speaker's general popularity. In a Time/cnn poll conducted last week by Yankelovich Partners, only 24% of those questioned said they had a favorable impression of Gingrich, vs. 56% unfavorable.

But even if the special counsel absolves him of wrongdoing, what may be more harmful to Gingrich and his party is the fully lawful success he has had in refining the G.O.P. fund-raising machine, a triumph that has every potential to offend reform-minded voters. By drawing tens of millions of dollars to the Republican campaign chests, Gingrich and the G.O.P. congressional leadership have kept Washington awestruck for months. Republicans came to town promising to decontaminate the political process, to rid it of the corrupting pursuit of "special-interest" money, a chase in which Democrats were the undisputed frontrunners. But in the year since Republicans have taken power in Congress, they appear to have become ... Democrats, and then some.

A case in point: on the same day recently that a House committee removed provisions from a bill that would cut dairy subsidies, the head of the National Milk Producers Federation scheduled a $1,000-a-head fund raiser for Representative Gerald Solomon, the New York Republican largely responsible for the revisions they had been seeking. All sides say they did nothing wrong. Democrats say it still amounts to business as usual. "Newt Gingrich has done a booming business in special-interest quid pro quos," says Don Fowler, co-chairman of the Democratic National Committee.

Sour grapes, say Republicans, the griping of Democrats who used to go yum-yum at the same trough where they now go tsk-tsk. In 1994, before the G.O.P. takeover of Congress, Democrats reaped two-thirds of the money donated by the top 400 political-action committees. During the first six months of this year, it was House Republicans who got nearly 60% of campaign contributions from the same sources. In that same period the National Republican Congressional Committee raised $18.7 million, four times the amount that went to its Democratic counterpart.

Given the probusiness disposition of the G.O.P. agenda--weakening environmental laws or workplace safety regulations, for instance, or making it harder to take manufacturers to court--corporate money probably would have found its way to their side even if the Republicans had done nothing more than leave a night-deposit box on the Capitol steps. But under Gingrich they have been much more aggressive. One of his chief enforcers is majority whip Tom DeLay of Texas, the third-ranking Republican in the House. DeLay is famous around Washington these days for "the book" he keeps in his office. It lists how much each of the 400 largest pacs gave to Republicans over the past two years and how much to Democrats. "Unfriendly'' donors--that's how they are named--are earnestly invited to reform. As DeLay was recently quoted in the Washington Post, "If you want to play in our revolution, you have to live by our rules."

One important part of the cash-suction operation is the multitude of Contract with America "coalitions,'' which are groups of lobbyists who raise funds to press members of the House for passage of elements of the Contract. "You have coalition creep,'' says Mark Isakowitz, a leader of the Coalition for America's Future, which pushes tax cuts. "You could spend most of your time going from one coalition meeting to another." These are coordinated for Gingrich by Representative John Boehner. His Thursday Group, a round table of representatives from the various coalitions, meets every week at 11 a.m. in a room within Gingrich's suite of offices in the Capitol. Unconstrained by rules of public disclosure, they have spent hundreds of thousands of dollars on lobbying efforts, most of it raised from large corporations.

The Coalition for a Balanced Budget, for instance, raised roughly $80,000 for pro-G.O.P. radio spots and $250,000 for a "patch-through" phone campaign. Just before crucial House votes, people were called at home and asked whether they agreed with the G.O.P. position. Those who did could be connected directly to the office of their representative in Congress to urge a vote for the bill.

Supportive research for the G.O.P. revolution is provided by the Progress and Freedom Foundation, the think tank through which the Speaker's college course was funded. Though Gingrich is no longer connected formally with the foundation, his sympathetic attention to what it produces is enough to bring it support from people who see it as an indirect route to the Speaker's ear. "Of all the think tanks, that's one whose reports are not just going to sit on the shelf,'' says lobbyist Jim Tozzi, whose firm has helped tobacco and chemical firms fight government regulations. "If I give somebody money, I want to make sure the report will be read. If I give to that group, I know it will be."

Democrats are hoping the special counsel that the ethics committee plans to hire will poke around in the Gingrich money machine until the investigator hits something foul. If the ethics committee balks at any request by the counsel to expand the probe, the Democrats can be counted on to recall the words of a celebrated House firebrand. To place limits on the work of the special counsel, he declared, would be seen as "an attempt by the ethics committee to control the scope and direction of the investigation.'' Who said that? Gingrich did, seven years ago, when he was pushing to widen the investigation of Jim Wright.

--Reported by Jeffrey H. Birnbaum and Nina Burleigh/Washington

With reporting by JEFFREY H. BIRNBAUM AND NINA BURRLEIGH/WASHINGTON