GAO: Former CMS administrator Scully broke the law

Sunday, September 12, 2004

September 13, 2004

WASHINGTON - The Bush administration illegally withheld information from Congress on the cost of the new Medicare law, and as a penalty, the former head of Medicare, Tom Scully, should repay seven months of his salary to the government, federal investigators said last week.
GAO investigators said Scully had threatened to fire the chief Medicare actuary, in violation of an explicit provision of federal appropriations law. Accordingly, they said, federal money could not be used to pay Scully's salary after he began making the threats to the actuary in May 2003, according to the New York Times.
President Bush signed the Medicare law on Dec. 8 2003. Less than two months later, the White House said the law would cost much more than Congress had assumed - $534 billion over 10 years, not $400 billion.
Lawmakers of both parties said the law would not have passed in its current form if Congress had known of the higher cost estimates, prepared by the chief actuary, Richard S. Foster, a career civil servant who has worked for the government since 1973 and received an award for outstanding service in 2001.
Scully's salary in 2003 was $145,600. He would owe the government $84,933 under the legal opinion issued on Tuesday.
The White House had no immediate comment. William A. Pierce, a spokesman for the Department of Health and Human Services, said the department would not try to recover the money because Scully had "acted within his legal authority.''
Scully  now works for a law firm and a private investment firm and is a registered lobbyist for Abbott Laboratories, Aventis Pharmaceuticals, Caremark Rx and other health care companies. He said his actions in government were motivated solely by a desire to help Medicare beneficiaries and taxpayers.