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Government auditors find Medicare videos illegal

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  1. Newsgathering

    News Media Update         WASHINGTON, D.C.         Newsgathering    

Government auditors find Medicare videos illegal

  • The General Accounting Office has ruled that the Department of Health & Human Services illegally used government funds to create and distribute propaganda made to appear like a video news release.

May 25, 2004 — The Department of Health & Human Services illegally used taxpayer money to create three video news releases that amount to “covert” propaganda, the General Accounting Office announced last week.

The Centers for Medicare & Medicaid Services, which operates under HHS, used congressionally appropriated funds to produce and distribute video news releases about the new Medicare Law. In the videos, sent to news stations throughout the country, actors impersonated reporters and did not attribute the funding of their “story” to the government.

Federal law prohibits the use of federal money for “publicity or propaganda purposes” not authorized by Congress. The GAO, which serves as the investigative arm of Congress, said May 19 that the administration’s misuse of federal money “also constitutes a violation of the Antideficiency Act,” which prohibits spending in excess of appropriations.

“They constitute ‘covert’ propaganda because they are misleading as to the source,” the GAO report said of the videos.

William Pierce, a spokesman for HHS who helped create the promotional spots, disagreed with that interpretation.

“It’s not covert. TV stations knew the videos came from us and could have identified the government as the source if they had wanted to,” Pierce told The New York Times .

The GAO rejected that argument.

“The suggested anchor lead-in scripts facilitate the unaltered use of the story package, announcing the package as a news story by Karen Ryan or Alberto Garcia,” the report said. The government, it said, arranged a “purported news story” using “alleged reporters,” but “nothing in the story packages permits the viewer to know that Karen Ryan and Alberto Garcia were paid with federal funds.”

Two videos end with an actress saying, “In Washington, I’m Karen Ryan reporting.” A third video is in Spanish, and similarly ends with an actor saying, “In Washington, Alberto Garcia reporting.” Only one of the videos mentions the administration’s Medicare advertising campaign.

Between Jan. 22, 2004, and Feb. 13, 2004, 40 stations in 33 different markets aired at least some portion of the videos, the report said. When questioned about the videos, “some news organizations indicated that they misread the label or they mistook the story package as an independent journalist news story on CNN Newsource,” according to the report.

Sen. Frank Lautenberg (D-N.J.) wrote a letter to President Bush the day after the report was issued, indicating he was drafting legislation that would require the administration to reimburse the Medicare trust fund for the cost of the videos. HHS reported that the total cost of producing the videos was $42,750, but has refused to provide any documentation.


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© 2004 The Reporters Committee for Freedom of the Press

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