US Senate Committee on Health, Education, Labor, & Pensions

Alexander: Sebelius’s Fundraising and Coordinating with Private Entities to Implement Health Care Law “May Be Illegal”

Sees “Strong Legal Analogy” to Iran-Contra Incident

Saturday, May 11, 2013Liz Wolgemuth 202-228-1263

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“If the secretary or others in her department are fundraising and coordinating the activities of Enroll America and soliciting donations to supplement appropriated funds, then those actions may be in violation of the Anti-Deficiency Act” — Lamar Alexander

NASHVILLE, May 11—U.S. Senator Lamar Alexander said today that U.S. Department of Health and Human Services Secretary Kathleen Sebelius’s fundraising and coordinating with private entities to implement the new health care law “may be illegal.”

Alexander, the ranking Republican on the U.S. Senate committee overseeing health policy, compared Sebelius’s activities to the Iran-Contra incident when Reagan administration official Oliver North raised funds and directed their spending through private entities in support of Nicaraguan rebels even though Congress had refused to appropriate funds.

“If the secretary or others in her department are fundraising and coordinating the activities of Enroll America and soliciting donations to supplement appropriated funds, then those actions may be in violation of the Anti-Deficiency Act,” the senator said.

The senator cited a report by the Iran-Contra Congressional Joint Select Committee, which said that “Congress’s exclusive control over the expenditure of funds cannot legally be evaded through the use of gifts or donations to the executive branch. Were it otherwise, a president whose appropriation request were rejected by Congress could raise money through private sources or from other countries for armies, military actions, arms systems or even domestic programs” (Iran Contra Joint Select Committee Report [Sen. Rep No., 100-216] at pages 412-413).

Alexander also said that the secretary’s activities may violate federal laws prohibiting raising private funds from those she regulates.

Friday, the Washington Post reported that Secretary Sebelius “has gone, hat in hand, to health industry executives, asking them to make large financial donations to help with the effort to implement President Obama’s landmark health-care law.”

The article said that the “unusual fundraising push comes after Congress has repeatedly rejected the administration’s requests for additional funds to set up the Affordable Care Act.” The article said many of the secretary’s calls have recruited support for Enroll America, described as “the most prominent nonprofit working on the health care law’s implementation,” whose “president, Anne Filipic, joined the group in January after service as White House deputy director for public engagement.”

Alexander’s complete statement follows:

Secretary Sebelius’s fundraising for and coordinating with private entities helping to implement the new health care law may be illegal, should cease immediately and should be fully investigated by Congress.

Such private fundraising circumvents the constitutional requirement that only Congress may appropriate funds. If the secretary or others in her department are closely coordinating the activities of Enroll America, which is headed by a former White House aide, then those actions may be in violation of the Anti-Deficiency Act.

The limits of the Anti-Deficiency Act were fully explored by Congress during the Iran-Contra incident when Reagan administration official Oliver North raised funds and directed their spending through private entities in support of Nicaraguan rebels even though Congress had refused to appropriate such funds.

The report of the Congressional Iran-Contra Joint Select Committee (Sen. Rep No., 100-216) at page 413 said, “The constitutional plan does not prohibit the President from urging other countries to give money directly to the Contras. But the Constitution does prohibit receipt and collection of such funds by this government absent an appropriation. This prohibition may not be evaded by use of a nominally private entity, if the entity is in reality an arm of the government and the government is able to direct how the money is spent.”

The report also said: “Congress’s exclusive control over the expenditure of funds cannot legally be evaded through the use of gifts or donations to the executive branch. Were it otherwise, a president whose appropriation requests were rejected by Congress could raise money through private sources or from other countries for armies, military actions, arms systems or even domestic programs” (Iran-Contra Joint Select Committee Report at pages 412-413).

Friday, the Washington Post reported that the secretary’s spokesman said that Sebelius is working with private entities on “our mission” of implementing health care law activities, although Congress has refused to appropriate more funds. If the Department of Health and Human Services closely coordinates with Enroll America and with other such entities, then the legal analogy with Iran-Contra is strong.
 
In addition, the secretary’s fundraising activities may violate federal laws prohibiting raising private funds from those she regulates. Federal law permits a narrow band of private fundraising activity but this has always been interpreted very narrowly. For example, it is permissible for the secretary to be the Honorary Co-Chair of the annual Heart Ball; it is not permissible for her to solicit personally a contribution from a hospital company for the ball.

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