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Tuesday, March 16, 2004 - Page updated at 12:00 A.M.

Medicare video subject of investigation

By Los Angeles Times and The Washington Post

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WASHINGTON — It was with great fanfare that the Bush administration unveiled 30-second television commercials and a two-page flier that would be mailed to 41 million seniors and disabled people, touting the newly enacted Medicare prescription-drug benefit.

Missing from the publicity was any mention of "video news releases" that feature "interviews" with government officials and voice-overs by production-company employees posing as Washington reporters, for use in local TV news shows.

Yesterday, less than a week after it concluded that the administration's Medicare commercials and fliers were technically legal but contained "notable omissions and errors," the General Accounting Office (GAO) said it would conduct another investigation to determine whether the video news releases constituted illegal "covert propaganda."

Several Democratic lawmakers, meanwhile, sent a letter to executives of the five major television networks urging them to "immediately warn stations not to use these materials" because they contain no statement indicating that they were produced by the government.

Democratic lawmakers also demanded an investigation into claims that the Bush administration withheld cost estimates of the prescription-drug benefit and that an administration official threatened to fire Medicare's chief actuary if he showed Congress his cost projections.

The question of the Medicare bill's likely cost was a major issue last fall, when House GOP leaders barely got enough votes to enact the Bush-backed measure. Throughout the long debate, congressional leaders said the bill would cost $395 billion over 10 years, a figure the White House did not publicly dispute. But soon after Bush signed it into law, the White House said the cost would be about $534 billion.

Last week, Medicare's chief cost analyst, Richard Foster, said he had reached the higher estimate long before Congress took its final votes and had wanted to share his estimates with lawmakers requesting such projections. He said Thomas Scully, then head of the agency overseeing Medicare, repeatedly told him he would be fired if he did so. Scully has said he never threatened to fire Foster except in jest.

Bill Pierce, spokesman for the Department of Health and Human Services, said the administration welcomed the new probe by the GAO, Congress' investigative arm. "If there's any ethical issues involved," he said, "it's whether (local TV stations) use it or not" as a news story.

Although nothing in the video material indicates that the government paid for its production, "We did identify ourselves when we pitched it" to news shows, Pierce said. "We make no effort whatsoever to hide anything."

As of Feb. 12, all or parts of the mock news story had aired 53 times on 40 stations in 33 media markets, Pierce said.

In their letter to TV network executives, six Democratic senators said the mock news story showed the administration had resorted to "deceptive tactics."


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