Marked “privileged, pre-decisional, deliberative,” the eight-page proposal, emailed to Verma’s deputy chief of staff, was part of an unusual campaign carried out by high-paid contractors Verma brought on at a cost to taxpayers of more than $3 million.
This work over 19 months that provided “strategic communication” services by a network of politically connected contractors and subcontractors, first reported by Politico, came as Verma spoke about the importance of fostering individual responsibility and self-reliance among the nation’s needy.
As chief of a $1 trillion Centers for Medicare and Medicaid Services within the Department of Health and Human Services, Verma has forged a far more partisan and outspoken brand than almost any of her predecessors. Typically, CMS administrators are visible on Capitol Hill and elsewhere but focus on the wonkish details of public insurance programs. Verma, in contrast, has emerged as one of the administration’s champions of conservative health policies, decrying the single-payer models of health care advocated by liberal Democratic presidential candidates while embracing some of the right’s favorite ideas, including Medicaid work requirements and shifting more decision-making to states.
Offstage but irksome to some CMS staffers, the strategic communications consultants— at least two dozen of them, documents show — formed an extragovernmental team that helped guide Verma where she wanted to go politically, oversaw some decisions by communication staff and attempted to elevate her profile in ways that go beyond what federal consultants usually are hired to do — and possibly beyond what contracting law permits, according to the documents, individuals familiar with the team’s role and an expert on government ethics.
Verma explained the decision to hire the contractors by saying that when she first arrived in March 2017, “my vision for the comms division was very different from what we had.”
“It was 1 a.m., and I was writing press releases because we did not have that expertise,” she told reporters last week. “I wanted to make sure we were communicating with the patient population and the provider population.”
The author of the March visibility plan was Pam Stevens, a former media affairs director of the House Republican Conference, who held communication roles in the Ronald Reagan and George W. Bush administrations and briefly worked in Trump’s Office of National Drug Control Policy. Charging the government at a rate of $310 an hour for her CMS work, documents show, she has specialized for many years in promoting Republican women. She declined to comment, referring all questions to the CMS.
Another main contractor was Marcus Barlow, a GOP strategist from Indiana with a history in health-care communications, who was Verma’s spokesman while she ran a health-care consulting firm based in Indianapolis. Her firm helped Republican governors, including Vice President Pence, draft state Medicaid plans before she joined the Trump administration. Verma wanted Barlow to become her communications director at the CMS, but the White House blocked his hiring, said people familiar with the discussions, because he wrote in a local business journal during the 2016 campaign: “I am not, nor will I ever be a Donald Trump supporter. I find him to be offensive and ignorant.”
All told, the CMS spent $3.3 million on these and other contractors, according to Ninio Fetalvo, an agency spokesman. The CMS spent $2 million on an initial contract, which divided strategic communications work between the agency and HHS. A second one-year contract for the CMS beginning in September 2018, obtained by The Washington Post, anticipated a total of nearly $2.25 million, of which Barlow himself was to have received about $425,000, the largest single sum.
HHS ordered an end to the contract, and work stopped the evening of April 3, after Politico first disclosed the contours of the arrangement. Afterward, Verma told multiple people that she wanted the contract restarted, according to an individual familiar with events, who like others spoke on the condition of anonymity to discuss private conversations.
The contract ultimately paid out $1.3 million, and Barlow received $150,000, according to Fetalvo and another person familiar with the CMS.
Federal law permits the use of taxpayer funds to pay contractors to share information about government programs, said Virginia Canter, chief ethics officer for Citizens for Ethics and Responsibility, a good-government group in Washington.
But such funds may not be used to pay an outside publicity expert unless Congress designates the money specifically for that purpose, Canter said, citing appropriations law from the 1960s.
The communications contractors’ work “would certainly catch my eye if I were the ethics officials” at HHS, she added.
HHS’s Office of Inspector General has been conducting a review of the contracts and the contractors’ role since June, and an office spokeswoman said it expects to finish early next year.
Fetalvo, the CMS spokesman, said the agency has about 6,000 staffers, “routinely uses tens of thousands of contractors to carry out critical day-to-day operations” and has relied on public relations firms for 15 years “to advance the mission of the agency to serve the American people.”
Verma cited as an example that she wanted to go on a listening tour around the country. “So those are things we did not have the internal capacity to conduct on our own,” she said.
Over time, Verma said, the CMS hired more communications staff. About two dozen of those people now focus on the media.
Dozens of internal documents — receipts, invoices, government payment vouchers, meeting agendas and more — make clear that Verma was relying on politically connected consultants fully two years into her tenure. The documents were obtained from a congressional Democratic staffer, and they span late August 2018 to this March.
Fetalvo said that even at that point, the CMS still lacked enough communications expertise, including a speechwriter.
The main contract was with Porter Novelli, a multinational public relations firm based in Washington. Some of the work was carried out under a subcontract to another firm, Nahigian Strategies, led by two brothers with strong GOP ties that has worked with HHS since the creation of Medicare drug benefits a decade and a half ago. For a time, Ken Nahigian headed the president’s transition team, helping prepare Cabinet nominees for Senate confirmation. Keith Nahigian has worked for a half-dozen presidential campaigns. Both of them billed at $380 an hour, invoices show, under rates established by Porter Novelli.
A monthly activity report from last December says that the Porter Novelli team “participated in [a] weekly communications coordination call with the consultants and CMS staff, as well as a separate weekly call with the administrator to discuss ongoing media and event opportunities.”
The team also worked with a pool of speechwriters, the report said. Barlow was the lead writer for one of Verma’s most important speeches, in which she laid out the idea of work requirements and greater state flexibility, according to one individual who spoke on the condition of anonymity about matters that are not public. Staffers routinely asked him to review blog posts and other writing they drafted for Verma because he knew her so well.
At one point, CMS asked HHS to approve a multimillion-dollar contract for a national bus tour for Verma that was organized by Nahigian Strategies, but then decided not to move forward with it, the individual said.
Still, the Nahigian brothers and their employees continued to work as advance staff for Verma’s out-of-town appearances — a role that does not typically exist for federal officials below the level of Cabinet secretaries but was important to Verma, who likes to convey her message outside the Beltway.
“Our decades-long experience working as a GSA-qualified subcontractor to more than a dozen agencies across the federal government, including HHS and CMS, is nonpartisan and spans across Republican and Democratic administrations,” Keith Nahigian said in a statement.
The CMS’s use of the contractors has drawn rebukes from some congressional Democrats.
“It’s highly inappropriate,” said Rep. Joe Kennedy (D-Mass.) who questioned Verma about it during a recent hearing. “The fact that you’ve got people with a long track record of political campaigns in consulting roles belies any protestations that these were . . . in the interest of pursuing widely held, bipartisan beliefs about health care.”
The proposal that Stevens emailed provides the clearest window onto efforts to raise Verma’s visibility.
The monthly plan said “notable events” Verma should attend included, but were not limited to the Ford’s Theatre Annual Gala, the Alfafa Dinner, Kennedy Center Honors and the Gridiron Dinner. The plan also listed a dozen publications, from ForbesWomen to Reader’s Digest, for profiles of Verma.
And it laid out speaking opportunities every month to “position [the] administrator as the thought-leader she is.”
The CMS’s Fetalvo said that the agency does not act on every idea it receives, noting that invitations are vetted by the agency’s ethics counsel before they are accepted.
He said that Verma has not attended any of the recommended social events. And of the recommended magazines and news outlets, he said, only AARP and Politico wrote articles about her, as far as he knows.
Correction: An earlier version of this story had an incorrect date for Verma’s swearing in. She became administrator in March, 2017.