washingtonpost.com
Ex-Medicare Chief's Pay Illegal, GAO Says
By Christopher Lee
Washington Post Staff Writer
Wednesday, September 8, 2004; Page A21

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The Department of Health and Human Services should have withheld former Medicare chief Thomas A. Scully's salary last year because Scully wrongly kept a subordinate from giving Congress higher cost estimates on the Medicare prescription drug law, the Government Accountability Office said yesterday.

In a 13-page legal opinion, Anthony H. Gamboa, the GAO's general counsel, said that a 1998 federal law prohibits an agency from paying a federal official who prevents another employee from communicating with Congress.

In writing that law, "Congress intended to advance two goals: to preserve the First Amendment rights of federal employees and to ensure that Congress had access to programmatic information from frontline employees," Gamboa said in the opinion, which was requested by 18 Senate Democrats.

Scully drew harsh criticism from congressional Democrats in March when longtime Medicare actuary Richard S. Foster said publicly that Scully had threatened to fire him last year if Foster told lawmakers that the Medicare bill supported by President Bush would cost at least $100 billion more than the $400 billion the White House said it was willing to spend. The legislation added a prescription drug benefit to the popular Medicare program, which provides health coverage for seniors.

The question of the bill's probable cost was a major issue last fall, when House GOP leaders barely got enough votes to pass the measure. Throughout the debate, legislative backers said the bill would cost $395 billion over 10 years -- a figure the White House did not dispute. After Bush signed the measure into law, however, the administration said the cost would be $534 billion.

Bill Pierce, an HHS spokesman, said agency officials believe that HHS and Scully acted appropriately and within the law. He said both the Bush and Clinton administrations have regarded the law cited by Gamboa as unconstitutional.

"The facts are that the executive branch is responsible for the operation of the federal government," he said. "It's no surprise that the GAO, which is an arm of Congress, would come down with a decision supporting the perspective of the legislative branch in this matter. . . . This is all being pushed by what we think is pure political motivation, mostly by members of Congress who opposed the prescription drug bill."

Sen. Frank Lautenberg (D-N.J.), who signed the request to the GAO, said Scully should pay back his $145,600 annual salary.

"This was a corruption of the process at the highest levels," Lautenberg said in a statement. ". . . What is still unclear is who in the Bush White House ordered Mr. Scully not to reveal this information."

Scully, who now works for a law firm, did not return two calls yesterday by The Washington Post. Asked by the Associated Press whether he would return his salary, Scully said: "I'm not sure that's relevant. It's not up to GAO anyway." He also said that the GAO did not interview him.

An earlier investigation by the inspector general of HHS found that, although administration officials used aggressive methods to keep the higher cost estimates from Congress, they did not violate the law. The nonpartisan Congressional Research Service said in May that the official threats against Foster probably broke the law, a finding the Justice Department disputed.

Sen. Edward M. Kennedy (D-Mass.) said in a statement that the GAO report "affirmed what should have been obvious all along. The Bush administration illegally withheld information about the true cost of the Medicare bill from the Congress for political purposes."