A think tank Republican presidential candidate Newt Gingrich founded has filed for bankruptcy in a stunning turnaround for a group that reportedly collected tens of millions of dollars from major health care interests and others while he was at the helm.
Gingrich called the bankruptcy filing of the Gingrich Group LLC, from which he severed ties before his presidential run, "sad." An aide said the filing would not affect Gingrich's campaign, but observers said Gingrich has long since been diminished as a factor in the race.
The Gingrich Group, doing business as the Center for Health Transformation, filed Wednesday for Chapter 7 liquidation in U.S. Bankruptcy Court in Atlanta, listing $1 million to $10 million in debt, with only up to $100,000 in assets.
Asked about the bankruptcy at a campaign stop in Magnolia, Del., on Thursday, Gingrich bemoaned the fate of his former think tank but also took a swipe at foe Mitt Romney, who once joked that he liked to be able to fire people.
"I'm never happy when someone loses their job," Gingrich said.
Though Gingrich is no longer running the Gingrich Group, it is the latest in a series of setbacks for the former Georgia congressman, who has drifted into also-ran status in the Republican presidential nominating process.
“His presidential campaign for all intents and purposes was already over,” said Kerwin Swint, a political science professor at Kennesaw State University.
The bankruptcy news follows comments in an interview last month by billionaire Sheldon Adelson, whose family has contributed millions to a super PAC backing Gingrich, that the former U.S. House speaker appeared to be at "the end of his line."
The for-profit Center for Health Transformation describes itself on its Facebook page as “a high-impact collaboration of private and public sector leaders committed to creating a 21st century intelligent health system that saves lives and saves money for all Americans.”
The Gingrich Group and health care center are part of an influential empire of for-profit and nonprofit organizations Gingrich created after stepping down as speaker. That empire involves films, books, speaking engagements and consulting.
The Washington Post reported last year the health care think tank brought in “at least $37 million” over an eight-year period from major health care interests and industry players, who were offered access to Gingrich, among other perks.
Gingrich divested his interests in the firm and has not been involved in its operations since May 2011, said Stefan Passantino, who has served as counsel for the Gingrich Group and is a lawyer for the candidate.
Passantino said the bankruptcy filing “has no involvement with [the Gingrich] campaign, and if anything goes to show how important his leadership was [to the think tank’s] flourishing.”
It appears without Gingrich, the Gingrich Group, like his former American Solutions for Winning the Future think tank, could no longer attract enough donors to remain viable. American Solutions folded last year after he departed.
Without Gingrich, said Swint, the Kennesaw State professor, “they had very little to offer.”
Gingrich founded the Center for Health Transformation in 2003. The company touted its ability to bring together business and government, though it said it did not lobby. It once vouched for a form of individual mandate to buy health insurance, which the candidate has since railed against as part of the Obama administration health care overhaul.
The Gingrich Group reportedly earned $1.8 million over several years with Gingrich working as a consultant for mortgage giant Freddie Mac, which became an issue during the campaign. Gingrich and his Republican presidential rivals have called for taxpayer-supported Freddie Mac to be dismantled.
Despite winning primaries in only South Carolina and his former home state of Georgia, Gingrich has pledged to press on until the GOP convention in Tampa this August. The campaign recently announced it had shed staff and that Gingrich was trimming his campaign schedule as he focused on courting un-pledged Republican delegates, whose convention votes are not tied to primary outcomes.
Creditors of the Gingrich Group appear to include Gingrich, his wife, Callista, and their film company Gingrich Productions. Other notable creditors are Aflac, the polling agency Gallup, Merck, UPS and Passantino's firm, McKenna Long & Aldridge.
Among assets listed last July by Gingrich in a campaign financial disclosure was a promissory note from the think tank valued at $5 million to $25 million to Gingrich Productions.
-- Staff writer Daniel Malloy contributed to this article.