[Swiftwater Gazette] Most Ethical Ever!

[Brad Haslett]

None of this will come as any surprise to anyone who studied Obama and
the Chicago Way prior to the election. Here's what we know to date;
the Obama administration met with Big Pharma in secret meetings and
they signed on to contribute $124 million to an ad campaign supporting
Obamacare.  Contracts were signed with David Axlerod's old firm which
he sold to join the administration.  But, that company owes Axlerod $2
million and his son still works there. Now in Chicago, most political
types would shrug and go, "so what?', what's the point of being in
politics in Chicago if you can't "spread the wealth" to your cronies?

The New York Times should be calling for a special prosecutor any
minute now, right?

Brad

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 Axelrod's ties targeted in health fight
By: Kenneth P. Vogel
August 19, 2009 04:45 AM EST

Critics of President Obama’s health-care overhaul are zeroing in on
his senior adviser David Axelrod, whose former partners at a
Chicago-based firm are the beneficiaries of huge ad buys—now at $24
million and counting—by White House allies in the reform fight.

The unwelcome scrutiny, largely from Republicans, comes at an
inopportune time as Obama seeks to shore up support for health care
reform. It revolves around two separate $12 million ad campaigns
advocating Obama’s health care plan that were produced and placed
partly by AKPD Message and Media, a firm founded by Axelrod that
employs his son and still owes Axelrod $2 million.

A separate firm, GMMB, is also handling the campaigns. Both AKPD and
GMMB did millions of dollars of work on Obama’s presidential campaign,
continue to tout their connections to the campaign and still maintain
close ties to his inner circle.

The two firms were hired to make the health-care ads by a pair of
linked coalitions supporting Obama’s health-care overhaul
proposal—Healthy Economy Now and a newer offshoot unveiled last week
called Americans for Stable Quality Care.

The Associated Press reported this month that Healthy Economy Now paid
AKPD and GMMB to produce a $12 million national ad campaign echoing
White House talking points supporting the health care overhaul.

And a spokesman for Americans for Stable Quality Care, which
essentially supplanted the now-defunct Healthy Economy Now, confirmed
that it is using the two Obama-linked firms to produce and air a
separate $12 million ad campaign launched Thursday designed to shore
up support among the conservative House Blue Dog Democrats and to
target swing senators. The ad, which is airing in a dozen states, is
the opening salvo in a campaign planned for this fall that will cost
tens of millions of dollars more.

The coalitions are a strange-bedfellows mix of business, labor and
health care groups including the Pharmaceutical Research and
Manufacturers of America (better known as PhRMA), the American Medical
Association, the Service Employees International Union and the liberal
group FamiliesUSA.

Neither coalition would reveal how much AKPD or GMMB was paid for its
work on the ads. The firms will likely net only a fraction of the $24
million total campaign price tag, but—unlike with election campaign
spending—there are no mandatory reporting requirements for such
so-called issue advocacy.

Some of the Healthy Economy Now ads began airing in June, around the
time PhRMA was negotiating with the Senate Finance Committee on an
eventual agreement to win the drug lobby’s support for a health care
overhaul by capping the costs the drug industry would absorb to $80
billion over 10 years.

The deal, which was blessed by the White House, has angered some
progressive activists and liberal House Democrats, who until recently
counted Big Pharma as both an impediment to health care reform efforts
and a Republican-aligned lobby.

Republicans are aggressively seeking to capitalize on the AKPD
connection, and the House Republican Conference distributed a one-page
talking points memo Tuesday asserting the White House-PhRMA deal
raises “serious questions as to whether the drug lobby is helping to
bankroll a multimillion dollar severance package for one of the
President’s senior advisers.”

The memo points out that the drug industry will profit handsomely from
the deal and asks whether Axelrod “recused himself from the PhRMA
‘deal,’ or will he work to defend an agreement with an industry that
is directly funding his son’s work, and indirectly funding his own $2
million severance package?”

PhRMA vice president Ken Johnson said his group wasn’t involved in
selecting AKPD or GMMB, and that, in fact, he had no idea the
coalitions had picked the former Axelrod firm until he was asked about
it by a reporter from Bloomberg.

“We’re very involved in reviewing ad copy and determining targeted
districts and states, but not in determining which consultants are
hired to carry out the campaign. That’s left to the people who you
hire to manage it,” he said, adding that PhRMA had not hired either
firm for ad buys the group aired on its own, which will likely dwarf
the buys it helped fund as part of the coalition.

He declined to comment on the House GOP criticism, except to say,
“Unfortunately, we’re a talking point and I’m not going to talk about
the talking point.”

Spokesmen for Healthy Economy Now and Americans for Stable Quality
Care said their groups paid AKPD and GMMB to produce the ads because
they are considered top ad firms, not because of any connection to
Axelrod or the White House.

Indeed, AKPD is widely recognized as a talented Democratic consulting
firm with significant experience on health care-related issues.

They “are among the best in the business, so it was a no-brainer to
hire them to help out this new effort to explain what health care
reform means for Americans,” said Phil Singer, a spokesman for
Americans for Stable Quality Care.

White House Press Secretary Robert Gibbs on Tuesday dismissed a
reporter’s question about whether Axelrod was profiting from the
health care fight.

“That's ridiculous,” Gibbs said during a Tuesday afternoon briefing.
“David has left his firm to join public service.”

AKPD’s continued payments to Axelrod are based on “an agreement, I
think, that was made because David started and owned the firm. He left
the firm, and if I'm not mistaken, is being paid for the fact that he
created it and sold it, which, I think, is somewhat based on the free
market.”

Financial disclosure records show that Axelrod, while preparing to
take a job in the White House at the end of last year, sold AKPD for
$2 million. And the records show that he sold a separate corporate
public relations firm he founded called ASK Public Strategies for $1
million at the end of 2008.

AKPD is now owned by a group of consultants who helped steer Obama’s
campaign, mostly while working at the firm, and ASK is owned Axelrod’s
former partners there. Both firms will pay his buyouts in preset
annual installments starting at the end of this year, terms that were
settled on prior to Axelrod’s White House service.

AKPD officials declined to speak publicly about the arrangement, but a
source familiar with the firm’s operations and finances said it is not
reliant on the revenue from the Healthy Economy Now and Americans for
Stable Quality Care campaigns to fulfill Axelrod’s annual payments,
which the source described as “a fraction” of AKPD’s operating costs.

Additionally, the source said David Axelrod never discussed the
coalitions’ campaigns with representatives from the firm or the
coalitions themselves. The source added that Axelrod’s son Michael is
a junior-level AKPD employee who has worked there for fewer than five
years and is not involved in the coalitions.

It’s difficult to determine the clientele of ASK or AKPD, since
neither are required to report them. But Axelrod’s disclosure
statement shows that before he left the firms, both represented
clients with business interests that stand to be affected by
administration policy.

AKPD, for instance, represented the AFL-CIO, while ASK has worked for
power concerns including Exelon and Commonwealth Edison Co. that could
be impacted by the administration’s push for a cap-and-trade system to
reduce carbon emissions. The company also has worked for the
non-profit corporation formed to lure the 2016 Olympics to Chicago, an
effort that the Obama administration has thrown its weight behind.
White House officials have said Axelrod was not involved in the
Olympic push.

On his first day in office, Obama unveiled a strict ethics policy
barring officials from working on issues “directly and substantially
related” to their former clients or employers for two years.

The White House vigorously denied that Axelrod violated the spirit of
that policy. And, in fact, Axelrod's buyout agreements were cleared by
the independent Office of Government Ethics, which is headed by a
director appointed in 2006 to a five-year term by former President
George W. Bush.

“David Axelrod has fully complied with the toughest ever ethics rules
for administration officials, including divesting from AKPD before the
administration began,” said Obama spokesman Ben LaBolt. “The notion
that Mr. Axelrod should decline to participate in all health care
policy work because his former firm—from which he has divested
himself—has retained a single client which he has had no contact with
is absurd.”

Nonetheless, the selection of Axelrod’s former firm to push the
president’s top initiative raises appearance questions, particularly
since Axelrod’s son Michael still works there, said Bill Allison of
the Sunlight Foundation, which advocates for stricter government
disclosure and ethics rules.

“The big issue seems to me whether there is a quid pro quo with
PhRMA,” said Allison, adding “there’s no evidence that Axelrod steered
the business to the firm. But the fact that special interests like
PhRMA and the American Medical Association working hand in glove with
the White House picked a firm that is so close to the White House
shows how incestuous Washington can be.”

© 2009 Capitol News Company, LLC