Former Bush Adviser Agrees to Pay for Trips

By Amy Goldstein
Washington Post Staff Writer
Tuesday, July 11, 2006

A former senior adviser to President Bush on health-care issues has agreed to pay nearly $10,000 to settle a dispute over whether he improperly billed the government for trips that he took while he was considering jobs in the private sector.

Thomas A. Scully, former administrator of the Department of Health and Human Services' Centers for Medicare and Medicaid Services, took the trips in 2003 when he was one of the administration's lead negotiators as Congress was moving to add prescription drug benefits to Medicare, the insurance program for elderly and disabled Americans.

According to the settlement agreement, the travel represented an inappropriate mingling of Scully's government work and his private job search. Scully, however, said in a statement, "I never did anything inappropriate," adding that he was agreeing to reimburse the government for disputed trips in order to avoid costlier litigation.

The settlement, in which Scully has agreed to pay $9,782, is not the first time that Scully's job search has produced controversy.

A federal law prohibits government officials from working on matters in which they have a direct financial interest. Negotiating a private job is considered one form of financial interest.

A longtime fixture in Washington health policy circles, Scully had said openly in 2003 that he wanted to leave the government, and then-HHS Secretary Tommy G. Thompson asked him to remain until the Medicare overhaul was completed.

In May of that year, Scully obtained a waiver from HHS's associate general counsel for ethics that permitted him to conduct a job search. Scully said he had sought the waiver after receiving unsolicited calls from law firms offering him jobs and that he did not begin direct negotiations with any potential employers until after Congress had passed the Medicare legislation.

He resigned from CMS in December 2003, to build a health practice in the Washington office of the Atlanta-based law firm Alston & Bird LLP and to work part time at Welsh, Carson, Anderson & Stowe, a New York investment firm specializing in telecommunications and health care.

The following month, then-White House Chief of Staff Andrew H. Card Jr. issued a memo that prohibited agencies from granting the kind of waivers Scully had received. Only the White House would be allowed to issue such a waiver, the memo said.

The trips cited in the settlement agreement took place during the six months before Scully left the government. According to the agreement, he sought and received reimbursement of $26.84 for parking and mileage to an appointment with a D.C. law firm that he said was 19 miles from his office, although it actually was two miles away.

In addition, the settlement agreement says Scully improperly billed the government for a trip to Atlanta, where he held what the agreement calls "a perfunctory meeting" with employees of a regional CMS office and met with representatives of Alston & Bird, his future employer. The agreement cites similar trips to Santa Barbara, Calif., and Boston, in which Scully engaged in both government work and discussions about potential private employment.

In his statement, Scully said that during his three years in charge of the Medicare and Medicaid agency he made "numerous trips" to meet regional employees, to give university speeches and to participate in town hall meetings with members of Congress. "The few times I did combine personal meetings with this type of business trip . . . I did so openly, on the understanding that such joint trips were permissible," the statement said.

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