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  •   A Medicare Gimmick That Hasn't Paid Off

    Former RNC Chairman Haley Barbour
    The Million Dollar Medicare Challenge by former Republican National Committee chairman Haley Barbour is tangled up in legal battles. (File photo)
    By Peter Slevin
    Washington Post Staff Writer
    Saturday, May 2, 1998; Page A1

    It started in 1995 as a tart political gimmick, an effort by then-Republican National Committee Chairman Haley Barbour to broadcast his claim that the GOP-sponsored budget would increase Medicare by more than 50 percent.

    Wearing a big smile and striking a pitchman's pose in newspaper ads, Barbour promised $1 million to any American who could prove him wrong. "Bold, attention-getting," was how one aide described the Million Dollar Medicare Challenge in an RNC memo at the time.

    For months, Democrats had been pounding into the nation's consciousness the idea that Republicans cared little for old folks and their federal medical insurance.

    Now here was Barbour, like Ed McMahon, hefting an oversize check in the ads – the Republican Party chief distilling political discourse into a simple clip-and-mail sweepstakes.

    Nearly three years later, simple is not the word.

    At least 80 Americans – the contest entry said they had to be Americans – answered his dare with semantics, statistics and statutes. They sent handwritten notes and laser-printed letters from far beyond the Beltway, from Schuyler Falls, N.Y., and Waco, Neb.; from Talihina, Okla., and Kootenai County, Idaho.

    The challenge, which yielded no winners by the RNC's reckoning, begat a lawsuit, which begat another lawsuit, which begat a third. Now the dispute between Barbour and his opponents is building to a contentious climax in U.S. District Court in Washington.

    Twenty people – among them two members of Congress, a Navy cook and a convicted burglar – are standing at the bar of justice, waving their versions of truth about Medicare. The pleadings fill five courthouse volumes.

    The contestants are asking a federal judge to declare that Barbour's 50 percent claim was hollow, thus solving a budgetary riddle and writing the final act of a political ad campaign that has taken on an expensive and absurd life of its own.

    "That circus," said Washington lawyer Jack Blum, a former participant in the case. "This is turning into a real five-star brawl. What I would really like to know is what the RNC has had to pay in legal fees. They must be spending a fortune."

    Lately, the litigants are buzzing about the RNC's agreement to settle the claim of a White House staffer, Robert Shireman, who started the whole courthouse parade and waged a spirited battle for the prize.

    It was Shireman, then an aide to a Democratic senator, who first sued Barbour and the RNC in D.C. Superior Court in 1996. A GOP spokesman at the time called Shireman's lawsuit frivolous, a "partisan publicity stunt." But the RNC quietly paid to make Shireman go away.

    Shireman, 36, a member of the National Economic Council, collected no money, nor did his primary attorney, David Halperin, now a White House speechwriter. But a source familiar with the deal says RNC money – no one will say exactly how much – went to a Mississippi lawyer on Shireman's legal team.

    With the arrangement, the Republicans eliminated a determined contender for the $1 million, while Shireman limited his legal costs and moved on. Sworn to secrecy as part of the agreement, none of the parties would talk on the record. Barbour did not return telephone calls seeking comment.

    Shireman's departure leaves others still scrabbling for the prize. A contestant from San Diego, Ralph Valle, taunted in a note to Barbour, "Courts will decide."

    The case began at the treacherous – some would say mythical – intersection of politics and fact.

    "Heard the one about Republicans 'cutting' Medicare?" trumpeted the December 1995 ads featuring Barbour in USA Today and the Capitol Hill newspaper Roll Call. "The fact is Republicans are increasing Medicare spending more than half. I'm Haley Barbour, and I'm so sure of that fact, I'm willing to give you this check for a million dollars if you can prove me wrong."

    Barbour's assertion was this: "In November 1995, the U.S. House and Senate passed a balanced budget bill. It increases total federal spending on Medicare by more than 50 percent from 1995 to 2002."

    Barbour aides saw the Million Dollar Medicare Challenge as a sure hit, according to memos made public in the case. One staffer, Ed Gillespie, said the challenge could "cut through the Democrats' rhetoric." He predicted it would be persuasive, "especially to seniors [witness the constant stream of 'You May Have Just Won' mailings they receive]."

    Another staffer, Suzanne DeFrancis, persuaded Barbour to approve the $6,200 advertisement in Roll Call and avoid its competitor newspaper, The Hill: "They're too liberal. They're also more expensive [$11,000]."

    The responses flowed in. One man who answered the ad said he misplaced a plane ticket and delayed a trip to see his children, he was so busy scurrying around Oakland International Airport looking for a photocopy machine. Another entrant turned out to be a jailed burglar in Lake Providence, La.

    Some challengers crunched numbers and parsed Barbour's sentences. Others borrowed from the U.S. Constitution and Economics 101, arguing that no one Congress and no single bill could guarantee results seven years hence.

    Shireman's approach was simple. He looked at what would be spent on Medicare from 1995 to 2002 under the Republican-sponsored budget bill: $1.427 trillion. He then looked at what would have been spent in the same seven years under existing law if the bill hadn't passed: $1.692 trillion.

    The difference: a reduction of $265 billion under the GOP bill, using Congressional Budget Office figures endorsed by the RNC.

    "You owe me one million dollars," Shireman wrote.

    But Barbour and the Republicans were confident of their own reading of CBO numbers, which showed that Medicare spending would indeed increase under the new budget bill, from $178 billion in 1995 to $289 billion in 2002.

    Sure enough, that's a 62 percent rise, although it is a smaller increase than would have occurred under the existing law. To Barbour, that still adds up to the increase he guaranteed. To Shireman, it equals a decrease.

    Shireman did not get his check, although he asked for it more than once. When the $1 million did not arrive and no other winner was announced, Shireman sued for breach of contract citing well-established law governing contests.

    The RNC mustered its attorneys and demanded the lawsuit be thrown out, but D.C. Superior Court Judge Russell F. Canan refused. Barbour and the RNC then dashed to Mississippi – where Barbour has a home – and sued Shireman and 79 other contestants in federal court there.

    Barbour's lawsuit, later transferred to Washington against his wishes, asked a judge to rule that no one won the contest. Or, if that argument failed, that at most one contestant of the judge's choosing could pocket the prize. The RNC posted a $1 million surety bond with the court.

    When Barbour and the RNC asked the court to order the contestants to pay the GOP attorneys and court costs, the move loosed a storm of vitriol. More letters rained in, from the same far-flung postmarks, from the same Americans, this time venting righteous American anger.

    "We are not idiots out here in the real world," wrote Leslie Kee, of Lusk, Wyo., who said Barbour and the RNC "should honor the challenge they put forth in such a condescending manner."

    Norton N. Black wrote from Tucson that he would not fight: "I knew that the whole thing was a hoax." Martin G. Minemeir, of Henrietta, N.Y., said the RNC owed him an apology, plus costs.

    John Osbourne, of West Palm Beach, Fla., described his entry as an act of free speech, a right he said he defended in three wars: "Doesn't Haley Barbour have anything better to do than bring stress on a 75-year-old man with a heart condition?"

    To thin the opposition, attorneys for Barbour and the RNC wrote to the contestants, inviting them to surrender their claims. There was nothing overtly intimidating about the message, except perhaps the stationery it was written on – the letterhead of a Mississippi law firm listing its 48 lawyers by name.

    As many as 60 people dropped their claims, leaving 20 contestants in the fight. They continue to file counterclaims against the GOP and cross-claims among themselves, pulling one another down like crabs in a bushel basket.

    "I'm looking forward to 'the Taylor Scholarships' at the University of Southern Mississippi," said Rep. Gene Taylor (D-Miss.), who promised his attorney 40 percent of the take. Sen. Carl M. Levin (D-Mich.) is also still in the game, represented by his wife, a lawyer.

    One discovery in the case suggests that U.S. District Judge John Garrett Penn and a prospective jury may find it difficult to decide who, if anyone, won the contest.

    The RNC admitted, in answers supplied to Shireman, that staffers destroyed the great majority of the contest entries and did not record the dates on which they arrived.

    "Discarding excess paper," GOP lawyers wrote, "is standard operating procedure at the RNC."

    The messy aftermath of Barbour's contest has left a sour taste with some ordinary people who mailed innocent-looking newspaper coupons, only to find themselves sued by the party of Lincoln.

    "So, are you right, Mr. Politician?" Albert Meskunas, of York, Pa., wrote acidly to Barbour. "Of course you are. You are ALWAYS right, regardless of what you say. And, fear not, Diogenes is dead."

    © Copyright 1998 The Washington Post Company

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