That's a rumor I just heard. George is by all accounts a charming fellow, good to his students, a wonderful teacher, and a civil, meticulous, if fanatical participant in the culture wars. But he is also one of the most extreme theocons around:
someone who believes that the government has a legitimate interest in knowing whether citizens masturbate in the privacy of their own homes (he has actually argued that wanking should be illegal in theory), a believer that the Constitution should ban all legal protections for gay couples, a strong supporter of the Schiavo intervention, and someone who believes that all abortion should be illegal in all circumstances. He was also an author of the anti-gay Federal Marriage Amendment which would have removed homosexuals from any recourse to equal treatment under the law. His passionate opposition to the civil equality and freedom of gay people is a core principle of his politics. I review his far-right views at length in The Conservative Soul.
If he were to become head of AEI, it would signal a moment in the evolution of the conservative movement: the end of secular pluralism, federalism and truly limited government as small-c conservative principles and the fusion of religious fundamentalism with foreign policy aggression.