Sept. 14 2006 11:15 AM

A Big Story--Almost

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By Hanna Rosin

       WASHINGTON, D.C. (Nov. 31)--The fringe press is forever spitting out scandal fodder for their mainstream counterparts to digest and disseminate. Sometimes the scandals check out and sometimes they don't, and it's up to the more responsible members of the press to make those distinctions. One recent example of a scandal that wasn't was the Arlington National Cemetery fiasco. The right-wing Insight magazine reported that President Clinton granted special permission to sell cemetery plots to big Democratic donors. More responsible journalists then figured out that Clinton had good reason to grant them permission. Case closed.

       Sometimes, however, the press doesn't weed out the phony scandals. What follows is a cautionary example of how not to report the news.

       On Thanksgiving weekend, a left-wing weekly called Class War published a shaky story revealing financial shenanigans by House Speaker Newt Gingrich. The magazine claimed a nonprofit group founded by Gingrich, Reading for Dollars Foundation, which pays underprivileged children $2 for every book they read, was funneling some of its money into political causes, and even into Gingrich's pockets. The group, the article claimed, also planned to pay children a $10 bonus for every Gingrich-authored book, including such timely children's classics as The Contract With America. The article even implied a cover-up. The foundation's 990 Form, required by all tax-exempt organizations, was suspiciously missing, they reported.

       The Class War article had outlandish quotes from a "deep throat" source, who said things like: "We lived high off the hog on [the money]. ... Caviar and champagne at Friday lunches." The story included an intriguing unrelated sidebar claiming the famous dinosaur bone in Gingrich's office was not found by him in Montana, but illegally bought. And the significance of the bones had something to do with the Rev. Sun Myung Moon, the article intimated.

       Excited by having something other than turkey dinners to write about, news organizations sent their reporters to dig through tax files and chase down Gingrich, who was on a dinosaur dig in South Africa. But because it was Thanksgiving, many of the reporters were on vacation. Jane Meyer, The New Yorker's investigative reporter, was away at the Hamptons, so they sent Malcolm Gladwell, famed more for his scientific dispatches than his political ones. Gladwell called back to confirm that, indeed, the 990 Form was missing. As we now know, it turns out the IRS had misfiled the document one file over.

       The New York Times' domestic staff were all on vacation, so the paper assigned the story to its correspondent in Moscow, Michael Specter, who repeated the more plausible allegations prefaced by the word "allegedly." (The word shows up 20 times in a 750 word story.) Even the British press picked up the story. Geoffrey Wheatcroft reported many of Class War's allegations in the London Guardian, adding a historical analogue of a tax scam involving the sardonic British prime minister of the 1830s, Lord Melbourne.

       The story seemed perfectly plausible. After all, Gingrich has been investigated by the House ethics panel as well as the IRS for years for diverting funds from his tax-exempt groups for political purpose. The story in fact sounded uncannily like the case in which Gingrich transferred money from his Abraham Lincoln Opportunity Foundation, a scholarship fund for underprivileged children, to GOPAC, his political organization, to pay for his cable show. The Reading for Dollars scandal seemed to have many of the same corroborating details: a board stocked with political donors, shared directors and auditors, and checking accounts in the same bank.

       Only after the New York Times, the Wall Street Journal, and The New Yorker reported the allegations was the truth discovered. A day later, the recovered tax form exonerated the organization. Just as its annual report for 1996 showed, Reading for Dollars used 70 percent of its budget to pay children, and the rest for overhead. The group's auditor also worked on Gingrich's re-election campaign, but he was well known for his charity work, and kept books for Reading for Dollars for no pay. The caviar and champagne were paid for by William McConnor of McConnor Buick in Tampa.

       Reading for Dollars failed, but because of Gingrich's lack of imagination, not his sleaziness. It turns out the children had no interest in reading The Contract With America, or Creating a New Civilization. Now the group will hire authors to write more suitable books. Titles in progress include Harriet the Spy Uncovers the Tax Scam and Visions of a Teenage Entrepreneur.

       As for the dinosaur bone, it turns out it was planted on the roadside by Republican donors in Montana who felt sorry for Gingrich and wanted him to realize his archaeological fantasy. The bone is also a phony.

Hanna Rosin is a senior editor at the New Republic.