The Fourth Scandal
While most of the media are fixated on Benghazi, the IRS abuses, and the DOJ’s interest in reporters’ phone calls, the biggest scandal of all may be Kathleen Sebelius’ shakedown of health care companies to pay for activities Congress has refused to fund.
It is illegal for government officials to solicit money from companies they regulate, according to Sarah Kliff from The Washington Post. She writes –
Federal regulations do not allow department officials to fundraise in their professional capacity. They do, however, allow Cabinet members to solicit donations as private citizens “if you do not solicit funds from a subordinate or from someone who has or seeks business with the Department, and you do not use your official title,” according to Justice Department regulations.
That should be a no-brainer. But Ms. Sebelius has violated the law before. Michael Cannon of the Cato Institute reminds us that in 2012 –
…the U.S. Office of Special Counsel concluded that Sebelius violated the Hatch Act by campaigning for President Obama and other political candidates while traveling on official business, an offense for which other federal workers are fired.
Ms. Sebelius apparently suffered no penalty for this transgression. Instead she continued to exercise unprecedented power in handing out waivers for unions and select others to avoid the requirements of ObamaCare, with absolutely no standards or guidance. Obeying the health reform law is mandatory, unless she decides it isn’t.
Industry shakedowns are nothing new for this administration. Before Mr. Obama was elected in 2008, you may remember that the pharmaceutical industry was the Democrats’ favorite whipping boy. Hardly a week went by without one of them demanding price controls or “re-importing” drugs from Canada. The industry was constantly accused of killing sick people by overcharging for medications, and profiteering from government-funded research. PhRMA was terrified of what the new administration was planning.
But in one of the most amazing turnabouts ever in Washington, PhRMA went from full-throated opposition to ObamaCare to full-throated support ― in just a matter of months.
On November 14, 2008, just a week after the election, The Washington Times reported that, “The nation’s largest pharmaceutical lobbying group is preparing a multimillion-dollar public relations campaign to tout the importance of free-market health care and undercut an expected push by the Obama administration for price controls of prescription drugs.” The article went on, “The stakes are especially high for drug makers, which stand to lose as much as $30 billion in revenue if President-elect Barack Obama‘s plan to let the federal government negotiate Medicare drug prices is implemented.”
Just nine months later, in August 2009, the publication Medical Marketing & Media was reporting just the opposite ― “PhRMA will launch a big advertising push for healthcare reform later this week, with T.V. spots airing in key states and on cable channels nationally.” The story continues, “News outlets including The New York Times and the Associated Press put spending on the ads in the range of $150 million ― a figure that PhRMA SVP Ken Johnson called speculative.”
What happened? The story quotes PhRMA president Bill Tauzin, “We were assured (by the White House): ‘We need somebody to come in first. If you come in first, you will have a rock-solid deal.'”
Apparently, PhRMA agreed to $80 billion in cuts aimed at filling the Medicare drug program’s “donut hole” and to spend $150 million in advertising to support Obama in exchange for a pledge that the White House would oppose price controls and re-importing drugs. And we haven’t heard a word of criticism of the pharmaceutical industry since then.
This time around it is the insurance industry that is being asked for favors ― to donate to Secretary Sibelius’ favorite “charity.” This is the very industry she directly or indirectly regulates.
The Ways and Means Committee is pretty concerned about this latest scam. It wrote a letter to the secretary which reminds her of the federal Anti-Deficiency Act, which reads in part –
From 5 CFR 2635.101 ― Basic obligation of public service.
(4) An employee shall not, except as permitted by subpart B of this part, solicit or accept any gift or other item of monetary value from any person or entity seeking official action from, doing business with, or conducting activities regulated by the employee’s agency, or whose interests may be substantially affected by the performance or nonperformance of the employee’s duties.
(14) Employees shall endeavor to avoid any actions creating the appearance that they are violating the law of the ethical standards set forth in this part. Whether particular circumstances create an appearance that the law or these standards have been violated shall be determined from the perspective of a reasonable person with knowledge of the relevant facts.
The letter goes on to demand answers to a series of questions about who exactly was solicited, by whom, and for what.
Looks bad for the secretary. Can she issue herself a waiver?
It does seem rather odd to have the Secretary of Health and Human Services calling CEOs of larger health care companies and asking for money. This amounts to the head of the bureaucracy that regulates them calling to ask for money. It’s hard to imagine the firms not feeling as though they cannot refuse. Worse yet, many firms may see this as an opportunity to curry favor.
It is a weird week in Washington when the HHS secretary shakes down CEOs for cash, but it registers as the #4 scandal!
I think she’s guilty. But Obama will probably pardon her.
We all need to realize that our government is extremely corrupt. The Obama administration isn’t the first and certainly won’t be the last to abuse it’s power. As scary as it is, House of Cards is real.
Unfortunately, half of the country doesn’t care at any given time. As long as they are getting what they want, it doesn’t matter how it gets done. What is the quote from the new Lincoln movie? Something about sometimes you can’t take a direct approach to do the “right thing”. There may be insurmountable obstacles in your way, so a serpentine, deceitful path is justified.
With that logic, what can’t be justified?
Just another example of the end justifying the means. No regard for ethical behavior at all. What kind of example are we setting for our kids when it is better to lie and nothing happen to you then to tell the truth and deal with the consequences. I will use the line the dems love. Do it for the children……
You’re assuming that she’ll actually be brought up on charges.
The NCPA had a publication on health IT a few weeks ago that found the VA in violation of The Clinger-Cohen Act of 1996 (PL 104–106) and VA Programs Enhancement Act of 2001 (PL 107-135). There was another a few months ago that found them in violation of federal sourcing laws.
Federal policies are regularly gross violations of Fair Accounting Practices.
Holder and Napolitano broke the law and actually got federal agents killed.
There’s a real “do as I say not as I do,” thing going on.
Hey, when I break the law next — do you think some nice legislator is going to send me a letter reminding me of statute rather than just indicting me?
No?.. was worth a shot.
“It is illegal for government officials to solicit money from companies they regulate”
– This is probably one of the most distorted laws. The government determines who they will invest money with (example: Environment friendly fuels), what companies they will “save” (GM, Big Banks), and what business will get lucrative govt contracts (GE). The relationship between govt and business is pretty convoluted and complicated.
Looks bad for the secretary. Can she issue herself a waiver?
– She’ll do the typical thing and lay low for a little while. The Obama admin will just avoid all questions regarding any mis-doing.
Don’t miss the fact that Sebelius is trying to gin up ACA marketing money because Congress refused to let her transfer funds from another ACA purpose to pay for it.
She’s trying to end-run that refusal by extorting (by my definition, at least) money from interested parties that she regulates.
If that’s not arm-twisting by the heavy hand of the federal government, I don’t know what is.
Yes, this is an example of campaign finance at it worst. But I’d like to point out that all senators and representatives do the same thing with their campaign coffers; it is not unique to democrats or the executive branch.
Thanks for posting this piece John. The Obama administration’s foray into the healthcare industry is the quintessential poster child for Crony Capitalism.
IMHO the BUCA have already been co-opted on the ACA at the expense of the public. It’s really disgusting, but it illustrates just how corrupt the Obama government has become. We are not naive enough to presume that this type of activity has never gone on before, but the sheer arrogance of this administration is without precedent. They seem to think they can get away with just about anything by covering it up. Illegal gun running, gross neglect and dereliction of duty in Benghazi, illegal wire tapping, use of the national tax authority to intimidate opposition, and God knows what other tactics we have yet to hear about are commonplace with these gangsters.
From the peanut gallery view it seems to me that it is all made possible by weak leadership in the GOP (that is fearful of the all powerful media), and that compliant media which in large part has essentially “covered up” government misdeeds by not doing their job. If someone had suggested in 1973 (post Watergate) this would be happening to this extent 40 years later I would have laughed in his face.
We will never be able to dog this guy (Obama) out of office, but we should be able to make him irrelevant for the next 3 years by sending half of his gangster apparatchiks to jail for violation of multiple federal laws.
Sorry Greg, I meant to credit you for this piece.
The real travesty of the PhRMA deal is that it took a real opportunity for cost savings (a reduction in prescription drug prices) off the table in favor of a pretend opportunity for cost savings (the fallacy of “lowering” health care costs by spreading them over a larger insured population) for a considerable period of time.
First of all we are not a third world country, not yet anyway, we are on our way though. I never wanted regulated socialized medicine, it never seems to work and it leaves life or death options up to the lowest of the low, like Sebilious who was caught on tape saying we the people dont’ know whats good for us, I couldn’t believe this dope held such a high position, same as Napolitano, another lowlife freak who has no business making up lists of can and can’t do for us, can’t hoard food, why not? can’t save rain water, why the hell not, must consider homecoming vets as terrorists, no can do. when are we going to get people who do not look and act like rejects from Saturday night live and think like Americans? Let us go back to our old health care for Americans, not the new world order, people who want us to pay for world wide health care, the medicaid card was abused by giving it to illegals to use, otherwise it worked for the poor, I used it once myself when I was out of work, it was great, our health care system was wonderful, now it is not, end of story, down with Obama care.
Looks like we’ve got a tough mob today.
CFR 2635.101 & Subpart B (omitted in this article) deals with ‘individuals’ receiving benefit. I don’t think that companies and individuals are prohibited from making donations to non-profit organizations.
The Public Health Service Act allows the secretary to support and encourage others to support nonprofit groups working to provide health information and conduct other public-health activities. Enroll America is one of the non-profits engaged in education and enrollment in the exchanges.
Sorry, no laws violated. No scandal. Just a dedicated Cabinet Member doing her duty to the country by seeking the only avenue left to her by the obstructionists in Congress. The fans always cheer for a legal end-around.
Is it just mee or does anyone else wish we had a “Circuit Breaker” for govenment like they have on Wall Street. When things become chaotic with obvious danger ahead if something isn’t done, everything stops. I’m tired of talking about and listening to people who are tired of what’s going on simply complaining. I wonder how people like Nathan Hale and Thomas Paine would behave if they were still alive?
Nothing really surprises me anymore regarding what happens over at the HHS and in Washington in general and how our media portrays it all.
I agree with you, Sam. How this scandal isn’t just as talked about in the media shows how it’s all controlled by special interests.
Hey, Big Al, I’m sure that is the argument her defense counsel will make at trial. Let’s let the jury decide.
Harv, Nate and Tom would probably be out picketing the IRS with the Tea Partiers, encouraging the firearms manufacturers to relocate to Indiana or Texas from New York and Maryland, and supporting Rep. Issa’s committee that’s trying to uncover the truth about F&F, Benghazi, etc.
I don’t think you’ll see armed rebellion, a la 1776, but if we get much more evidence of the Obama crew’s criminality and/or incredible incompetence, all bets are off!
And these are the Mafia style politics that the left is so proud of?
I had a webinar last night with 248 people representing 7,000 employees. Many are laying off, downsizing, and selling/closing locaitons
I’m now never surprised by this administration’s tactics regarding pushing their agenda. As a small business, healthcare provider this is another example of why ACA needs to be repealed and replaced with a consumer driven, portable model. I can provide the best care possible but due to larger health systems contributions may be forced out due to this form of cronyism.
John and Colleagues:
She is a sorry administrator, and a ethics-free Cabinet member. Frank Timmons–you say that this whole thing is “made possible by weak leadership” on the part of Republicans. That’s absurd. The Republicans did not make her do it. What about “made possible by corrupt Democratic leadership?”
And Big Al–You forgot to read the paragraph about “avoiding the appearance…”
Did you not note that she is inviting contributions to Enroll America, which is a part of the PPACA. That is not some pure non profit in the sky–it is a key part of Obamacare, a part that the House deliberately did not fund. This is a repeat of ACORN. The whole thing is corrupt, and citizens are being asked to accept it.
Note that a majority of the public want to go back to healthcare before Obamacare. They are very aware of the price increases for insurance.
This is what you get, liberals, when you vote by romantic excuses a person without practical experience, with a leftist upbringing, with a tendency to repeat the practice of electing someone by the color of their skin as he appoints people, not for competency, but by the color of their skin. This whole sorry soap opera is giving diversity a bad name. Why do we have to give him 3 more years?
And what else is yet to be revealed?
Wanda J. Jones
San Francisco
@Wanda Jones
While I certainly agree with the rest of your post, I should clarify what I mean by “weak GOP leadership”. Were this a Republican administration even half as corrupt as this current administration, I dare say the Democrats would be howling from the treetops and insisting on special prosecutors for each of these scandals. Yet, we can’t even seem to convince the Speaker of the House to insist on a special investigator for the Benghazi affair (outside of congressional committees). It seems to those of us in the Hinterlands that are old enough to remember the hue and cry from Watergate, Iran-Contra, Tom DeLay, etc., etc. are hearing mostly crickets from the GOP leadership (presumably because they don’t want to look Ted Cruz like). Gentlemen and ladies all, most of them seem timid about going for the political throat when the opportunity presents itself. Such courtesy is rarely if ever demonstrated from the other side, and it seems (based upon the last two elections) their tactics work much better.
Another example of weak leadership is the failure to at least be more aggressive in promoting free market healthcare. Precious few like Jim DeMint have stuck their political necks out to promote free market healthcare.
That is what I mean by weak leadership.
Unfortunately a lot of what Frank Timmins says is true. There seems to be 2 things working against the GOP leadership. 1 is that most of the media would ignore and is ignoring most of what the GOP is saying. Another is that the leadership is generally only talking in sound bites and talking points and is not conveying solid solutions. Take the healthcare debate. Most people think there is no real alternatives to ACA but if anyone takes the time to read the research there is numerous ways to make health care much more free market, consumer driven that would decease costs, improve access and improve the overall heath of Americans. Need to have not only the leadership but all of us out there who believe that this needs to be changed shouting from every roof top what the alternatives and the real solutions are.
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