(Photo: Washington Post)
Washington Post on December 15, 2011 released the following:
“By James V. Grimaldi
It is a curious case in the annals of the FBI: The bureau considered a sting operation against then-House Speaker Newt Gingrich after sifting through allegations from a notorious arms dealer that a $10 million bribe might get Congress to lift the Iraqi arms embargo.
The FBI ended up calling off the operation in June 1997. It decided there was no evidence that Gingrich knew anything about the conversations the arms dealer was secretly recording with a man who said he was acting on behalf of Gingrich’s then-wife, Marianne, according to people with knowledge of the investigation.
But details of the case, which became public this week in an article and documents posted online by a nonprofit journalist, show how a series of second- and third-hand conversations alleging that the top man in Congress might be for sale caught the attention of federal investigators.
“There are so many falsehoods,” Marianne Gingrich said Thursday. “The FBI, they should have been protecting me, not going after me. This is scary stuff.”
Her lawyer, Victoria Toensing, said: “There was no basis whatsoever for an investigation. These were people puffing, which means they were making up access to a high-level goverment person.”
Gingrich’s presidential campaign did not provide immediate comment when asked for response Thursday.
The investigation began after the arms dealer, Sarkis Soghanalian, told federal prosecutors and FBI agents in Miami that Marianne Gingrich said during a meeting in Paris in 1995 that she could provide legislative favors through her husband. The case progressed to the point that it was deemed a major investigation requiring approval in Washington.
Soghanalian, a convicted felon who is now dead, said he wanted the speaker’s help in getting the arms embargo lifted so he could collect an $80 million debt from Iraqi leader Saddam Hussein, according to an FBI document filed to obtain continuing wiretap authorization for the case. The facts in the document were “developed through a cooperating witness,” whom The Washington Post has confirmed was Soghanalian.
Soghanalian said Marianne Gingrich assured him “she would be able to do anything [Soghanalian] requested of her ‘as long as they had an understanding,’ ” the document states.
Several months after the meeting in Paris, a man who had been on the trip with Gingrich and Soghanalian told the arms dealer that the embargo could be lifted for the right price. In conversations recorded by Soghanalian, the man, a Miami car salesman named Morty Bennett, stated that Marianne “wanted 10 million dollars to get the job done, five million of which would go directly to Marianne Gingrich,” the document states.
Bennett said in an interview Thursday, “I knew somebody and introduced them to somebody and that was it. Thank you for calling, and don’t call me back.”
The document and the existence of the aborted sting was first revealed this week in a 6,400-word story by Joseph Trento, who operates a Web site called DC Bureau (www.dcbureau.org). Trento interviewed Soghanalian several times before his death in October at 82.
The investigation foundered because there was no evidence against Newt Gingrich to establish “predication” — a basis to believe the target was engaging in or about to engage in criminal activity — according to people familiar with the investigation who spoke on the condition of anonymity because of the sensitivity of the case. FBI policy requires predication before significant undercover operations are initiated.
“There wasn’t any direct evidence that he knew anything,” said a source who spoke on the condition of anonymity. “The rules are you just can’t go in there and do an integrity check on someone.”
Bruce Udolph, the former chief federal corruption prosecutor in Miami, said he could not confirm the existence of the investigation but added, “With respect to Speaker Gingrich, I am not aware of any direct, credible evidence linking him to any conspiracy to receive a bribe from anyone.”
The Justice Department referred calls to the FBI, which declined to comment on the case.
The Armenian-born Soghanalian was a high-volume arms dealer nicknamed “the Merchant of Death” who was indicted by federal authorities in South Florida for conspiring to sell U.S. helicopters to Iraq in violation of a U.S. ban. His 61 / 2-year sentence was reduced to two years in 1993 because of his cooperation with federal authorities.
He was already a federal informant when he met with Marianne Gingrich in Paris in July 1995. Also in attendance at those meetings were Bennett and Howard Ash, who had earlier worked with Marianne Gingrich at the Israel Export Development Corp., a company that advocated for a free-trade zone in the Gaza Strip.
Marianne Gingrich, who had left her position as vice president of marketing at IEDC, said she went to Paris at the request of her former boss to help get an investment from Soghanalian in IEDC.
The FBI document states that Soghanalian, Marianne Gingrich, Ash and Bennett spent several days together in Paris. Gingrich said “her relationship with her husband was purely a relationship of convenience,” the document states. “She told [Soghanalian] that she needed her husband for economic reasons, and that he needed to keep her close because she knew of all his ‘skeletons.’ ”
“She also told [Soghanalian], ‘It’s time for me to make money using my husband, and after we get started doing this, it will be easy,” the document says.
In January 1996, the document states, Soghanalian said he received a call from Bennett, who said he was acting on behalf of Marianne Gingrich and asked for $10 million to get the embargo lifted. Bennett wanted more than $1 million in advance, $300,000 in cash. The rest of the money was to be wired into Bennett’s bank account so that it could be transferred to the Institute for Advanced Strategic and Political Studies, an Israeli-based think tank with offices in Washington where Ash was a fundraiser, according to the document.
“Bennett stated that the way they had the deal structured nobody would ever be able to prove it was anything illegal,” the document states. “Bennett stated that it would be handled like a campaign payment and ensured the source that [Marianne] Gingrich knew what she was doing. Bennett stated that the money was for Gingrich and her husband and that they needed buffers to protect them.”
Marianne Gingrich said Thursday, “All that’s hogwash.”
Soghanalian asked for a telephone call with Marianne. Bennett said that “would spook Gingrich” but that he would try to arrange it “for small talk about their Paris trip,” the document states.
But Bennett never produced Marianne Gingrich. He reestablished contact with Soghanalian in February 1997, and the FBI asked for approval from headquarters to keep recording the conversations “to develop evidence of possible Hobbs Act, Conspiracy, and Bribery violations by Bennett, Ash, Marianne Gingrich, and as yet unidentified federal officials,” the document states. Ash did not return calls seeking comment.
In June 1997, Soghanalian was planning to meet Gingrich and his wife at a fundraiser in Miami arranged by Ben Waldman, a Reagan administration official who later was lobbyist Jack Abramoff’s business partner in the controversial purchase of a casino cruise line in Florida. Waldman did not return calls for comment.
FBI agents began preparing to bug the meeting, but Neil Gallagher, then deputy chief of the FBI’s criminal division, ordered the investigation closed prior to the fundraiser, people familar with the case said. They said local agents were upset by Gallagher’s move.
“I’d have to refer any comment back to the FBI,” Gallagher said Thursday.
The FBI special agent in charge in Miami at the time, Paul Philip, who signed the document, said he could not recall the case. After reviewing the document, he said he could understand why the case did not progress.
“When you’re dealing with elected officials, you have to be real careful,” he said. “Not that they can do anything to us. But their reputations are so fragile, if you don’t really, truly try to do the right thing, you could really shaft somebody.””
To find additional federal criminal news, please read Federal Crimes Watch Daily.
Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.
The author of this blog is Douglas McNabb. Please feel free to contact him directly at email@example.com or at one of the offices listed above.