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Gingrich faces new threat of legal scrutiny

His popularity tumbling and his judgement increasingly questioned even within his own Republican party, Newt Gingrich is facing a new threat: the likely appointment of an independent counsel to investigate alleged ethical irregularities by the House Speaker.

After months of stonewalling, Republicans on the House Ethics Committee have reluctantly agreed to the principle of an outside investigator to look into what has been called "Newt Inc," a skein of political and personal ventures by Mr Gingrich, some involving the political action committee Gopac, which the Speaker headed until early this year.

Until now the committee of five Republicans and five Democrats has been deadlocked. But the dam burst last week with charges by the Federal Election Commission (FEC) that Gopac spent huge sums helping Mr Gingrich win a hairbreadth re-election victory in 1990. It also produced documents showing that big Gopac contributors asked for help with their problems with government, creating what the FEC calls "the appearance of corruption".

Mr Gingrich has dismissed the allegations as "phoney, totally phoney". Even so, this new controversy was clearly a factor in his decision last week to keep out of the spotlight in the negotiations over the 1996 budget, where his outbursts have handed the White House a massive public-relations boost in its battle with Congress.

The argument now is over how wide the counsel's powers should be, with Republicans insisting they be kept as narrow as possible, but Democrats adamant that no Gingrich controversy should be off-limits.

Thus does history repeat itself on Capitol Hill. Seven years ago, a fiery young minority whip named Newt Gingrich led the campaign for a powerful counsel to probe alleged misdemeanours by the then Democratic Speaker, Jim Wright. Mr Wright was forced to resign.

No one is yet predicting a similar fate for Mr Gingrich. But a counsel with broad powers will have much material to work with. According to a transcript released by the FEC, one speaker at an internal Gopac meeting in August 1990 estimated "Newt support" at $250,000 a year. Separate allegations centre on possible Gopac funding for a college course taught by Mr Gingrich, in breach of tax laws.

The biggest headlines however were generated in autumn 1994 by the Speaker's infamous - and shortly thereafter cancelled - contract for a $4.5m book advance from Rupert Murdoch's HarperCollins publishing company, just when Mr Murdoch had pressing business with Congress and federal broadcasting authorities.

Meanwhile, President Bill Clinton yesterday vetoed the Republican bill for balancing the budget by 2002. But the White House is promising its own proposal by the end of the week, raising hopes of a compromise to avert another federal shutdown when the current stopgap government funding expires on 15 December.