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The Fourth Scandal: GOPs Accuse Sebelius of Obamacare 'Shakedown'

WASHINGTON – A handful of congressional committees are looking into Health and Human Services Secretary Kathleen Sebelius’ solicitation of monetary contributions from private companies to help fund an organization that promotes Obamacare.

Sebelius sought donations from various groups after Congress failed to make appropriations to Enroll America, a nonprofit advocacy group dedicated to promoting the Patient Protection and Affordable Care Act and making sure the public is aware of its potential benefits. The group is operated by Anne Filipic, former White House deputy director for public engagement.

An HHS spokesman initially denied that Sebelius was seeking the contributions. But the agency reversed course and later maintained that the secretary was authorized to seek assistance under the Public Health Service Act, which permits the secretary to work in behalf of nonprofit groups that offer health information. Justice Department regulations further permit cabinet members to seek contributions to organizations as a private citizen as long as they don’t use their official title or “solicit funds from a subordinate or from someone who has or seeks business with the Department.”

Sebelius has denied asking for money from any firm regulated by the Department of Health and Human Services.

Regardless, Michael F. Cannon, director of health policy studies at the Cato Institute, a Washington-based, libertarian think tank, maintained that Sebelius is engaged in an “abuse of power” that “strengthened the case for her removal from office.”

Cannon observed that HHS is the federal government’s largest department with a budget of almost $1 trillion per year with most of its funding subsidizing the healthcare sector.

“Those subsidies will increase dramatically when Obamacare takes full effect next year,” he said. “Sebelius has been calling executives from the industry she regulates, including ‘multiple insurance executives,’ and asking them to donate money to Enroll America – a private organization, headed by a former White House official, whose purpose is to help make ObamaCare a success. Sebelius has a history of threatening uncooperative companies with retaliation.”

Even if her activities are not illegal, Cannon said, “they are definitely unethical.”

The revelation struck a nerve with congressional Republicans who unanimously oppose the healthcare law scheduled to take full effect in 2014. The measure requires all Americans to acquire health insurance – with some receiving financial assistance from the government to do so – and expands the Medicaid rolls.

GOP lawmakers, including Sen. Lamar Alexander, of Tennessee, maintain the Sebelius initiative may be more than unethical.

“Secretary Sebelius’s fundraising for and coordinating with private entities helping to implement the new healthcare law may be illegal, should cease immediately and should be fully investigated by Congress,” said Alexander, ranking member on the Senate Health, Education, Labor and Pensions Committee. “Such private fundraising circumvents the constitutional requirement that only Congress may appropriate funds.”

Sen. John Barrasso (R-Wyo.) characterized the secretary’s solicitation as “the Sebelius shakedown” and demanded to know “what is she promising those businesses that she talks to and what is she threatening them with.”

Barrasso accused Sebelius of devising a plan to “cover over and cover up the train wreck that is happening with the President’s healthcare law” by “shaking down companies, executives throughout the country.”

The 11 Republican members of the Senate Finance Committee, led by Sen. Johnny Isakson, of Georgia, the ranking member, sent a letter to Sebelius seeking “details of a fundraising scheme in which she has solicited funds from the health care companies she regulates to help launch Obamacare.”

“Soliciting funds from the very companies or organizations that the Department of Health and Human Services regulates could be a serious conflict of interest,” the letter said. “Companies and organizations should never be pressured for money because it sends the message that contributions are necessary to secure favorable regulatory decisions — creating a ‘pay to play’ environment — or to avoid regulatory reprisals. This is even more pronounced in this instance because the individuals that you were allegedly contacting to solicit donations head up the same entities who may have bid to participate in the marketplace exchanges.”

Two House committees immediately launched investigations into the secretary’s fundraising efforts. Rep. Fred Upton (R-Mich.), chairman of the House Energy and Commerce Committee, and five other panel members dispatched a letter to Sebelius on May 13 notifying her that it is probing reports that she is soliciting donations from private companies.

The letter notes that HHS holds sway over health insurance companies since the department can grant “approval to qualify for the health exchanges established by the Patient Protection and Affordable Care Act so that they may attempt to sell their services to the public when enrollment begins in a few months. Your agency also has the power to review the insurance rates that providers wish to charge.”

Upton also sent a letter to 12 companies with ties to the healthcare industry, including Aetna, Kaiser Permanente, and United Healthcare, to determine if they were solicited by the secretary.

The House Ways and Means Committee also is weighing in, seeking information from Sebelius about her activities and maintaining that she is “scrambling to find funding from sources the law did not authorize.” The lawmakers, led by Rep. Dave Camp (R-Mich.), said there exists a “clear appearance of a conflict of interest.’’

“Your fundraising from groups that may apply to receive federal grants…creates the appearance that giving the money to meet Obamacare’s funding needs will result in more favorable consideration for a grant application,” the letter said.

But House Democratic Leader Nancy Pelosi, of California, stepped up to defend Sebelius, telling reporters on Thursday that “there is a responsibility to do outreach.” The secretary was responding to “hundreds of millions of dollars spent during the debate misrepresenting, mischaracterizing — I don’t like to use this word lying — about what was in or not in the Affordable Care Act.”

“And so, no, I don’t have any problem with her (Sebelius) doing that,” she said.

Meanwhile, Think Progress, a publication of the Center for American Progress, a liberal think tank, maintains that Alexander, one of the most vocal Sebelius critics, raised private donations in support of education reform while serving as education secretary under President George H.W. Bush.

According to the report, Alexander raised the money after Congress refused to fund Bush’s America 2000 initiative, an effort that eventually failed.