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John Cornyn calls for broad probe into Obamacare spending, fundraising

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Politics,White House,Obamacare,Health Care,PennAve,Susan Crabtree,Kathleen Sebelius,John Cornyn,HHS

Sen. John Cornyn, R-Texas, is calling for a broad investigation into spending and fundraising to help promote Obamacare after a report released Monday raised new questions about the White House's involvement in persuading private entities to donate to the effort.

The Government Accountability Office, Congress' investigative arm, released a report Monday on Health and Human Services Secretary Kathleen Sebelius' fundraising on behalf of Enroll America, a nonprofit founded by former Obama campaign and White House staffers, to help boost enrollment in the federal exchanges.

When looking into the fundraising issue, the GAO interviewed a representative from the Robert Wood Johnson Foundation who said a White House aide during a discussion in 2012 sought a “significant contribution” for Enroll America and said other similar enrollment nonprofits would likely need $30 million to finance a national Obamacare promotional effort.

The White House stresses that the aide, identified only as the deputy assistant to the president for health policy, did not ask for a specific dollar donation and denies the mention of the need for $30 million to finance a private national Obamacare public-relations campaign.

Jeanne Lambrew has been serving in that position since March 2011, according to a report in the Washington Post.

“Kathleen Sebelius’ shake-down of the very health companies her department regulates is a gross abuse of government power,” Cornyn told the Washington Examiner in a statement.

“After putting taxpayers on the hook for billions of dollars in Obamacare spending, a full investigation is needed to account for all the money wasted and the need to fundraise from the health industry.”

The White House element is important because for nearly a year Sebelius has said the fundraising was both ethical and legal because the Public Health Services Act allows HHS officials to engage outside groups to publicly promote public health initiatives. The White House, however, is not covered under the act, so their fundraising activity is governed by separate, stricter limits.

One ethics expert familiar with the Public Services Act says the White House aide may have violated executive branch ethics laws and the matter deserves further scrutiny.

“If the White House as opposed to HHS got involved in the fundraising that crosses the line and appears to be a violation of executive branch ethics law,” said Craig Holman, an ethics expert at the watchdog group Public Citizen. “The only exemption in the Public Health Services Act would be for HHS.”

Another ethics expert, Meredith McGehee of the Campaign Legal Center, said the true test of whether ethics laws were broken is whether the private entities Sebelius and potentially others asked for donations are “directly regulated by HHS,” which would be a conflict of interest.

“Exhorting groups that are not directly regulated by HHS to support the government's efforts to enroll people in a program that is the law of the land is within the lines,” she said. “Making direct asks for money or pressuring groups or companies that are regulated crosses the line.”

Before the GAO report on the fundraising, Sebelius was the only public official to come forward and confirm involvement in outside fundraising to promote Obamacare. The White House had said only they were generally aware of the fundraising but did not sign off on it.

In testifying to Congress and speaking publicly about the fundraising, Sebelius has repeatedly stressed the distinctions she made between asking for general support from three private entities that HHS regulates and delivering more specific and direct fundraising pitches to two organizations the department does not regulate.

For instance, she readily acknowledges asking the Robert Wood Johnson Foundation, a nonprofit that supports anti-obesity and other health outreach campaigns, and the tax-advising company H&R Block for direct contributions to Enroll America.

Sebelius has said she made phone calls to the CEOs of three other organizations, Kaiser, Ascension Health and Johnson & Johnson, but only asked for non-financial support such as “technical assistance.”

The GAO report said she sought advice from her legal counsel about the propriety of the fundraising before making the phone calls.

While HHS does not directly regulate the Robert Wood Johnson Foundation, the organization has close ties to Johnson & Johnson, which the agency does regulate. The foundation owns more than $1 billion worth of stock in Johnson & Johnson. The Food and Drug administration, which is part of HHS, regulates Johnson & Johnson's drugs and medical devices.

HHS does not regulate H&R Block, but the company stands to reap a windfall from the implementation of Obamacare by helping clients determine whether they qualify for tax subsidies when enrolling in the insurance exchanges.

The GAO report does not offer a legal opinion about whether the White House aide or Sebelius violated federal law but found no evidence that the outgoing secretary violated the Anti-Deficiency Act, as Republicans charged when the solicitations first became public in May of last year.

The Anti-Deficiency Act prohibits government agencies from accepting voluntary services or donations.

For an Anti-Deficiency Act violation to have occurred, the GAO found that HHS would have to incur a potential future obligation to pay Enroll America for its services.

It said there is likely no such violation since GAO found no informal or contractual agreements between HHS and Enroll America. The agency also found that HHS did not incur any internal expenses, so the department likely did not violate the Anti-Deficiency Act rules against spending without an appropriation.

Republican lawmakers say the report raises new questions about the White House's involvement in the fundraising and shows that the administration is willing to push legal boundaries to support Obama's signature legislative initiative.

"This report on the secretary's fundraising for Obamacare fits into a pattern of abuses of government office to pursue political ends,” said Greg Dolan, a spokesman for Rep. Jack Kingston, R-Ga. “The person in charge of the government takeover of health care should not be asking CEOs to bankroll a partisan marketing campaign, period."

Kingston was one of five lawmakers who requested the GAO probe. The others were Republican Sens. Lamar Alexander of Tennessee and Orrin Hatch of Utah, as well as Reps. Dave Camp and Fred Upton of Michigan. Kingston chairs the appropriations subcommittee that directs health care spending.

"The self-proclaimed 'most transparent administration in history' has been anything but transparent in implementing the president's health care law,” Upton said in a statement to the Washington Examiner.

“Despite every resistance from administration officials, my colleagues and I have always asked the difficult questions and held the administration accountable for the law's many broken promises,” he added. “Our thoughtful oversight continues despite the administration's attempts to keep the public in the dark."

A spokesman for Alexander, said the senator hoped Sebelius' replacement “will not ask the entities she regulates to support the president's allies.”

Hatch echoed that statement, saying the fundraising was “of questionable merit and presented an unnecessary and disconcerting appearance of a conflict of interest.”

“The senator hopes the next HHS Secretary will use this information to make better choices,” he said.

A GOP aide for one Republican involved in asking for the GAO report last year said their request was intentionally limited and narrowly tailored to nine questions because they had hoped by limiting it they would get a quicker response. Because of that, the staffer said the GAO report doesn't necessarily reflect all of the fundraising activity Sebelius or others engaged in over the last two years.

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Susan Crabtree

White House Correspondent
The Washington Examiner