Mock News on Medicare Called Illegal
The General Accounting Office says viewers of the segments played
by 40 TV stations weren't told they were produced for a government agency.
By Vicki Kemper Los Angeles Times May 20, 2004
WASHINGTON — Mock news reports produced and distributed to local television
stations by the Bush administration to promote the Medicare prescription drug
program violated a provision of federal law that prohibits the use of taxpayer
funds for "covert propaganda," the General Accounting Office determined
Wednesday.
The GAO, the investigative arm of Congress, noted that the administration had
labeled its entire "video news release" package so that the 126 television
stations receiving it would know that it came from the Centers for Medicare and
Medicaid Services and its parent agency, the Department of Health and Human Services.
But that fact was not apparent to the 41 million senior and disabled Medicare
beneficiaries who were the target audience of the "purported news story,"
which included the voices of off-camera production company employees identifying
themselves as Washington reporters, the GAO said in a decision signed by General
Counsel Anthony H. Gamboa.
"Nothing in the story packages permit the viewer to know that Karen Ryan
and Alberto Garcia were paid with federal funds through a contractor to report
the message in the story package," the agency said. "The entire story
package was developed with appropriated funds but appears to be an independent
news story."
Ryan was the "reporter" for the English-language stories and Garcia
for the Spanish-language version.
The GAO also found that the department had violated a second law, the Antideficiency
Act, against using federal money for unauthorized purposes. Since "covert
propaganda" is illegal, the GAO said, there were no funds authorized to produce
it. The packages cost $43,000 to make.
According to the GAO, that law requires agencies that violate it to report their
actions to the president and Congress. But Bill Pierce, spokesman for the Department
of Health and Human Services, indicated that although top department officials
were still reading the 16-page decision, it was unlikely the administration would
comply.
"GAO opinions are not binding on the executive branch," he said. "This
is the opinion of the GAO. We disagree with that opinion."
He also said it was the responsibility of the television stations' editors and
producers to inform viewers of the source of the material.
"This was in no way covert, as they claim," Pierce said. "This
was overt, in every way…. We provided them with every technological ability
to tell the audience who it was from," he said.
Asked if he could understand that a viewer might be angry about not being informed
of the source of the mock news story, Pierce said, "If I'm a viewer, I'd
be angry at my television station."
Forty television stations in 33 media markets, including Santa Barbara and Fresno,
aired all or part of the Medicare video package at least 53 times in January and
February, said Health and Human Services Department officials.
The GAO decision was awkward for the administration, which has been promoting
the new Medicare discount drug card in the face of complaints from seniors and
consumer advocates that the program is confusing and offers only limited savings.
Minutes before the GAO released to the media its decision on the Medicare video
package, the Centers for Medicare and Medicaid Services issued a report that low-income
Medicare beneficiaries could save between 29% and 77% on brand-name prescription
drugs. The agency later announced that it had taken action to improve access to
its toll-free information line and its website.
The GAO finding also gave Democrats another opening to critique how the administration
shaped and promoted the Medicare reform law, which Republicans had believed would
help them gain support among older voters in this fall's elections.
In January, the administration revealed that its final cost estimate for the law
was $534 billion over 10 years, one-third more than the $400-billion maximum it
told Congress to provide.
Medicare's top financial analyst said later that the then-Medicare administrator
had threatened to fire him if he shared his cost estimates with Democratic lawmakers.
The Congressional Research Service said recently that the administration's withholding
of the cost estimates probably violated federal law. The administration refuses
to release its complete cost analysis to Democratic lawmakers, and this week 19
House Democrats filed suit to force the disclosure.
"The new GAO opinion is yet another indictment of the deception and dishonesty
that has become business as usual for the Bush administration," said Sen.
Edward M. Kennedy (D-Mass.). "It was bad enough to conceal the cost of the
Medicare drug bill from the Congress and the American people. It is worse to use
Medicare funds for illegal propaganda to try to turn this lemon of a bill into
lemonade for the Bush campaign."
This year, several Democratic senators asked the GAO to investigate whether the
administration's commercials and fliers promoting Medicare constituted illegal
propaganda. The GAO concluded that although those materials contained "notable
omissions and errors," they were technically legal. It was in that investigation
that GAO officials discovered the administration's "video news releases,"
which had not previously been disclosed.
The head of the GAO, Comptroller General David M. Walker, then made the decision
to determine whether the Medicare video packages were legal.
"We evaluated all of the reasons that [administration officials] thought
it wasn't covert, but what we saw was something that was running that the viewer
had no idea was put together by [the Centers for Medicare and Medicaid Services].
That's the reason it was covert," said Susan Poling, a managing associate
general counsel at the GAO.If you want other stories on this topic, search the
Archives at latimes.com/archives.
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Copyright 2004 Los Angeles Times
Complaints were filed three months earlier:
Medicare Ads Draw Fire
Consumer Affairs.Com February
6, 2004
The Alliance for Retired Americans today called on the Republican National Committee
to reimburse American taxpayers the more than $12 million of public money used
by the Bush administration to finance a media campaign that promotes the new
Medicare prescription drug law, charging the advertisements are blatantly political
and don't provide a public service. The print and broadcast campaign was launched
by the White House in response to growing criticism about the politically volatile
Medicare drug benefit.
HHS Secretary Tommy G. Thompson said the campaign is intended to inform seniors
when some of the prescription drug benefits will be available, and to "reassure"
seniors that they can choose to keep their existing Medicare coverage if they
prefer. The ad encourages seniors to learn more by calling 1-800-Medicare, the
toll-free helpline for Medicare beneficiaries and their families.
"The president and Karl Rove know they created a prescription drug law
that seniors simply don't accept," said Alliance Executive Director Ed
Coyle, whose organization says it represents more than 3 million seniors. The
group campaigned fiercely against passage of the Medicare bill.
"This misinformation campaign amounts to nothing more than an in-kind political
contribution by the Department of Health and Human Services to the Committee
to re-elect President Bush and should be paid for with campaign money and not
with hard-earned taxpayer dollars. This campaign is a public disservice and
shouldn't be construed as helping educate seniors.
Thompson said the campaign was meant to be educational.
"We're going to provide seniors with straight answers about the new benefits
being offered to them," Secretary Thompson said. "We're going to let
them know what benefits are coming and when. Our toll-free helpline and website
will be places seniors can turn for the facts and for more information about
how the new benefits might help them."
"We're reaching out to make beneficiaries aware of new opportunities so
they can take advantage of them if they choose," said Dennis Smith, acting
administrator of the Centers for Medicare & Medicaid Services. "We
know there are some who are uncertain about what this new legislation means
for them. This campaign will help answer their questions and show them where
to go for more information."
Coyle said fatal flaws in the new Medicare law, coupled with political repercussions
associated with a growing senior backlash, pressured the Bush administration
into refuting criticism of a law that's not even scheduled to go into effect
until 2006. The money the administration used to finance the ad campaign and
expensive media buys was supposed to be used to implement the new law,"
he added.
"This administration has an obsession with unfairly cutting taxes, but
it doesn't hesitate to spend public money on political commercials masquerading
as public service ads," Coyle said. "Seniors deserve more and they
know it all too well."