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Analysis: Some Republicans see new scandal in Sebelius fundraising

President Barack Obama makes a statement next to Secretary of HHS Kathleen Sebelius about contraceptive care funding in the press room of th
President Barack Obama makes a statement next to Secretary of HHS Kathleen Sebelius about contraceptive care funding in the press room of th

By David Morgan

WASHINGTON (Reuters) - With the White House already reeling from three major controversies, some Republican lawmakers are zeroing in on what they perceive is another possible scandal tied to President Barack Obama's landmark health reform law just as it nears implementation.

On top of the troubles the administration is facing over its handling of the attack on the Benghazi mission, the Internal Revenue Service's targeting of conservative groups, and the Justice Department's seizure of Associated Press phone records, Republicans hope to target Health and Human Services Secretary Kathleen Sebelius.

They are questioning her soliciting of funds on behalf of a non-profit group, called Enroll America, from two private entities, a practice which if not unprecedented is at the very least unusual. Federal law bars officials from soliciting any organization or individual with whom they do business or regulate.

Enroll America is run by the president's former campaign backers to do something Congress refused to fund: sell "Obamacare" to the public.

An HHS statement last week said that since March Sebelius solicited financial donations for Enroll America from H&R Block Inc, the tax preparation company, and the Robert Wood Johnson Foundation, a philanthropic entity devoted to public health issues. Asked Monday for a list of all solicitations before or after March, an HHS spokesman referred Reuters to the department's original statement.

Neither H&R Block nor the Robert Wood Johnson Foundation are regulated by HHS, the department's spokesman said, so there was nothing improper or illegal about soliciting them.

Enroll America is intended to serve as the private sector flagship for a massive public outreach campaign intended to get millions of uninsured Americans to sign up for subsidized insurance coverage through new online marketplaces, or exchanges, that will begin open enrollment on October 1.

NO COMMITMENT

H&R Block said it has made no commitment to Enroll America. "We received a phone call from the Secretary during which the Secretary discussed supporting Enroll America," the company said in a statement. "While we took her suggestion under consideration, we have made no commitment," it said.

The Robert Wood Johnson Foundation said in a statement that it had "recently approved new funding" for Enroll America, bringing its total contributions to the group to nearly $14 million since 2010. It did not say how much of that, if any, came in response to Sebelius' solicitation.

It's the second controversy over the novel method used by the Obama administration to promote its agenda: using campaign-style organizations staffed with loyalists and former campaign or White House aides to mobilize grassroots support for government policies. The first involved Organizing for Action, an independent non-profit group seeking to harness both the energy and personnel from Obama's re-election campaign in support of the president's legislative agenda.

The Enroll America issue is complicated by the fact that Republicans in Congress have succeeded in blocking proposed government spending that otherwise could have been used to achieve the ends pursued by the independent group.

That has given lawmakers, such as Republican U.S. Senator Lamar Alexander, an opening to allege a violation of the federal "anti-deficiency" act, which bars agencies from accepting "voluntary" services except when authorized by law.

In defense of the help the department is getting from Enroll America, an HHS spokesman said it is permitted by a section of the Public Health Service Act that allows the secretary to encourage support for new and innovative health programs.

Some conservative legal experts say finding a clear-cut violation of the law is a long shot. "I would be skeptical of the claim that it's illegal, unless someone made a really compelling case. However, the appearance is such that it at least raises questions," said Jonathan Adler, a law professor at Case Western University who opposes healthcare reform.

But legal issues may be the least of the concerns for supporters of the healthcare law.

They worry that a political storm over Obamacare, with congressional hearings likely, could discourage private donors to Enroll America and jeopardize the administration's ability to find the funds needed to reach a public that is already largely unaware of the healthcare reforms.

One of the biggest concerns is that younger, healthier people will not sign up for health plans on the exchanges, driving the costs up for coverage of the people who do sign up.

"The danger" to the health program, said former Obama healthcare adviser Nancy-Ann DeParle, "is that people don't come and enroll and get insured. That leaves the health plans in the exchanges trying to cover people without any young, healthy people, and it drives the price up."

REPUBLICANS PROMISE PROBES

Republicans certainly see an opportunity.

"Our guys on the Hill think this is the fourth scandal," said Republican strategist Matt Mackowiak. "It fits into that narrative Republicans are building not only about incompetence in the executive branch but also dishonesty."

"This is a good issue for Republicans," Mackowiak added. "We want to maximize it."

The Republican-controlled House Energy and Commerce Committee has launched an investigation into the fundraising to determine whether it involved regulated companies and has asked nearly a dozen healthcare firms including major insurers such as Aetna Inc, a member of Enroll America's advisory council, to say whether they have received solicitations.

Republicans in the House and Senate have also called on the non-partisan Government Accountability Office to investigate.

"People are watching it very closely. We're hearing about it from constituents, people who are incredibly concerned," said Republican Representative Marsha Blackburn.

Enroll America was launched in September 2011 in part by leaders of Families USA, a key backer of the healthcare reform effort as it moved through Congress in 2009 and 2010. It is led by Anne Filipic, who worked on public engagement projects in the Obama White House. It's managing director, Chris Wyant, directed Obama's eastern Ohio field operation during the 2012 election campaign.

It includes on its boards of directors and advisers, executives of Teva Pharmaceuticals USA, Blue Shield of California, Kaiser Permanente, and CVS Caremark as well as officials of major health-related trade associations, such as the American Hospital Association and the National Association of Health Underwriters.

Filipic said she is confident that Enroll America will get the funds it needs for the outreach campaign. "We feel really good that we'll have the resources we need," she said.

(Reporting by David Morgan; Additional reporting by David Ingram and Fred Barbash; Editing by Fred Barbash, Martin Howell and Eric Beech)

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