GAO Reveals Questionable Obamacare Fundraising Details
Policy + Politics

GAO Reveals Questionable Obamacare Fundraising Details

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A new report out today from a government watchdog reveals the unusual measures the Obama administration took to finance the rollout of the president’s health care law.

Last year, after Congress refused to give the Department of Health and Human Services additional funds to implement Obamacare, now-outgoing HHS Secretary Kathleen Sebelius began the unconventional approach of requesting donations from private entities for nonprofit groups like Enroll America, which was created to lead the law’s outreach efforts.

Republicans pounced on those solicitations at the time and requested that the Government Accountability Office investigate if the secretary had violated federal ethics rules. The Obama administration, meanwhile, argued that Sebelius’s actions were completely legal, saying that under federal law, the HHS secretary can encourage support from nonprofits that promote public health.

Related: Obamacare Sign Ups Don’t Tell the Whole Story

In its new report, the GAO did not provide a legal opinion on the fund-raising efforts. It instead confirmed that Sebelius “contacted the chief executive officers of five organizations to solicit support for one outside entity, Enroll America.”

The report details that at least $13 million in grants for Obamacare enrollment activities came from the Robert Wood Johnson Foundation, a nonprofit consumer advocacy group that Sebelius had contacted to encourage donations. The report also found that Sebelius asked H&R Block for financial support and requested “nonfinancial support” like tech assistance and advice from Ascension Health, Johnson & Johnson and Kaiser, which the report says consists of the Kaiser Foundation Health Plans and Kaiser Foundation Hospitals—all regulated by HHS.

Republicans charged that the secretary’s outreach was unethical because it pressured private companies to support the president’s health care law.

“To solicit funds from health care executives to help pay for the implementation of the president’s $2.6 trillion health spending law is absurd,” Sen. Orrin G. Hatch (R-UT) said in a statement.

Related: Did Sebelius Lie to Congress About Obamacare Pay-Ups?

Several experts, including a former White House chief ethics counsel under President George W. Bush, believe the secretary’s solicitation efforts violated federal ethics rules. Richard Painter called the Robert Wood Johnson Foundation a “prohibited source,” because it invests heavily in many of the companies HHS regulates.

“[The Robert Wood Johnson Foundation] might as well be Johnson & Johnson so far as the ethics rules on solicitation are concerned,” Painter told the The Washington Free Beacon last summer. “The HHS secretary can’t ask them for money.” Many current and former RWJF board members were previously Johnson & Johnson executives or work in the health care industry, The Free Beacon noted.

Under federal ethics rules, government employees cannot solicit money from a source that “does business or seeks to do business with the employee’s agency, or “conducts activities regulated by the employee’s agency.”

Administration officials, however, point to a section in the Public Health Service Act that allows the HHS secretary to support and encourage others to support nonprofit groups working to provide health information and conduct other public health activities.

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