ON THE AFTERNOON THAT MEDIA BARON RUPERT MURDOCH paid his visit to the Speaker-to-be, Newt Gingrich's one-room Capitol office was in chaos. Extra telephone lines were being installed, and aides were camping out on a floor littered with phone messages. Gingrich, arriving late, waved his hand at the mess and invited Murdoch and two of his lobbyists to an ornate reception room down the hall. There, as caterers set up for a Democratic dinner, the two sat on a bench and talked for 10 to 15 minutes. Their chat was mostly about the election that had swept the Republicans into power three weeks earlier, their aides told TIME, but drifted into the subject of the TV business.
"It was the most insignificant meeting in the history of the world," says Murdoch lobbyist Preston Padden, who had arranged the Nov. 28 chat. Indeed it might have been, except that a few weeks later, Murdoch's publishing house HarperCollins agreed to give Gingrich a $4.5 million advance to write two books. In the ensuing controversy, Gingrich decided to give up all but $1 of the advance and collect only royalties. However, the disclosure last week that Murdoch and Gingrich had met in person reignited criticism of the Speaker's book deal, for which he could still earn millions of dollars while in office.
For his part, Murdoch has vital interests at stake in Washington -- not the $ least of which is a spat with NBC, a rival of the mogul's Fox network. NBC has complained to government regulators that Murdoch's control of Fox, which is owned by his Australia-based company, violates rules on foreign ownership of TV stations. Padden told TIME he was the one who raised the issue with Gingrich: "Right at the end, I interjected that NBC was trashing us all over Capitol Hill, and it was just sour grapes because we were hurting them in the marketplace."
When the New York Daily News reported the meeting last week, Democrats seized the moment. "Mr. Gingrich seems to have an addiction to secrecy and back-room deals," said Michigan's David Bonior, who now plays Gingrich's old role as Torquemada to the majority. Bonior resumed his call for a special counsel to look into the book deal.
Democrats weren't the only ones complaining last week. Rival publishers said the price for the book, which was sold by Gingrich's agent in a telephone auction on Dec. 20, rose breathtakingly fast, keeping it out of their reach. "There was no time to do anything," said Stephen Rubin, president of Doubleday. However, publishing executives attribute the high price to HarperCollins' zeal, rather than any rigging of the auction process.
All sides of the deal insist there was no impropriety. When Gingrich and Murdoch met, their aides say, the Speaker was unaware that Murdoch owned HarperCollins, and Murdoch had no idea that his company was negotiating for Gingrich's books. Yet even Republicans are worried by the lingering suggestion that the Speaker is looking to make a profit on his new fame. Thomas Mann, a scholar of Congress at Washington's Brookings Institution, predicts that continuing controversy over the deal will force Gingrich to give up the book project entirely or donate all its proceeds to charity.