How HHS Secretary Sebelius Broke Federal Law and Avoided Punishment

We’ve written before about Secretary of Health and Human Services Kathleen Sebelius violating the Hatch Act.  By campaigning for Walter Dalton’s election as Governor of North Carolina and Barack Obama’s reelection as President at a Human Rights Campaign Gala, Sebelius used taxpayer funding for her own partisan priorities.  The precedent for presidentially-appointed and Senate-confirmed federal employees violating the Hatch Act is resignation.  Sebelius is the highest-level federal employee to break this law, but President Obama, the sole administration official with the authority to see that the penalty for this violation was paid, not only declined to ask Sebelius to resign, but opted to keep the Secretary on for his second term.  White House spokesman Eric Schultz contended that this administration holds itself “to the highest ethical standards[,]” but the facts of the Sebelius debacle would suggest otherwise.

Sebelius labeled her speech at the Human Rights Campaign Gala as an “official” event, meaning that not only would her travel and time be paid for by the taxpayer, but the time and travel of her aide, AJ Pearlman, would be covered as well.  The Hatch Act is a federal law which, according to OSC, “prohibits federal employees from using their official authority or influence to affect the outcome of an election.”  For instance, the Secretary of Health and Human Services, under the law, cannot campaign for a political candidate using her official title, because this would be an abuse of government authority; nor can she use taxpayer-funded travel or the work hours of taxpayer-funded employees and aides to support a political event, because this would be an abuse of taxpayer funding, furthering a personal and political end.  However, Secretary Sebelius committed each of these violations at the HRC Gala – then attempted to cover it up.

In the first half-hearted attempt to make up for this abuse, Sebelius quickly reclassified the event as “political” instead of “official.”  This retroactive attempt to erase the fact that she used her standing as a Cabinet member to influence two upcoming elections was insufficient, and OSC nevertheless concluded that Sebelius did in fact violate the Hatch Act.

The second part of the abuse was the taxpayer dollars spent on the event, and accordingly, Sebelius had an HHS assistant request that the Democratic National Committee reimburse the government for her own travel.  Even this first attempt was mishandled, however: in January 2013, we filed an FEC complaint explaining that the DNC failed to properly disclose this reimbursement.  In fact, the reimbursement was almost impossible to connect to Sebelius’ Hatch Act violation at all: the DNC sent a check marked only with the word “travel” – preventing accountability in determining whether Sebelius’ violation of the law was truly “repaired” by reimbursement for her travel.

But the missteps didn’t end there.  Cause of Action found, after sending Freedom of Information Act requests to four separate agencies, that the U.S. Treasury was not, in fact, reimbursed.  Cause of Action’s FOIA request to the U.S. Treasury’s Financial Management Service turned up no responsive records – even though our FOIA production from OSC proved that Sebelius was ordered multiple times to reimburse the U.S. Treasury.  In the production we received from our FOIA request to HHS, Cause of Action found the DNC’s check, sent to reimburse HHS, not the Treasury:


While White House press secretary Jay Carney again assured reporters that “the U.S. Treasury has been reimbursed,” this has clearly not been the case.  OSC did, however, recognize that HHS was reimbursed instead of the U.S. Treasury, but failed to take action on it, as showed by Cause of Action’s FOIA production from OSC:


The improper reimbursement raises the question of whether the cost of the trip was truly reimbursed, or whether HHS was simply free to use the funds as it wished.  Because OSC did not insist on the proper execution of its own requests for reimbursement, taxpayers dollars remain, in effect, unrecovered.

While the reimbursement for Sebelius’ costs was bungled many times over, Sebelius was not the only federal employee affected by her violation.  In her lengthy process of abdicating responsibility for campaigning on the taxpayer dime, Sebelius effectively threw her own aide under the bus.  AJ Pearlman provided background research in preparation for the HRC Gala where Sebelius promoted Democratic candidates, and attended the event to assist.  As Cause of Action showed in an OSC complaint, when Sebelius scrambled to save her own skin by retroactively reclassifying the event as political instead of official, she made Pearlman’s actions illegal as well.  OSC openly acknowledged that Pearlman’s efforts could not legally be funded by the federal government and ordered Sebelius to reimburse the Pearlman’s travel costs as well, as revealed in a letter from OSC to HHS:

sebeliusblog2 sebeliusblog3

As Cause of Action showed in its January 2013 OSC complaint, if Pearlman’s actions, after Sebelius’s campaigning on government time, could not be funded by taxpayer dollars, then Pearlman too would have committed a Hatch Act violation.  As the OSC wrote to HHS: “the Hatch Act would have prohibited” Pearlman’s work on the HRC event – and so the funding had to be reimbursed.  Cause of Action did its part, but OSC has thus far refused to uphold its own rules (read more about Cause of Action’s letter to Congressman Darrell Issa requesting for investigation into OSC’s failure to execute its duties here).

OSC made clear in the excerpts above that had Sebelius classified the event as political from the beginning, Pearlman’s work would have prohibited by the Hatch Act, but it still chose not to take action against Pearlman. Additionally, the President refused to take any action against Sebelius for her violation, claiming that Sebelius’ meeting with “ethics experts” solved the problem.  The White House won’t hold Sebelius accountable, the U.S. Treasury has not been reimbursed, and OSC’s selective enforcement of the Hatch Act hides Sebelius’s victim: the aide who did as requested.

Sebelius broke federal law but the White House chose not to do its job and ask for her resignation – it seems that its “ethical standards” could use some work.

CoA letter to OPM, DOJ, OLC re: Hatch Act Guidelines

2013 4 8 CoA to OPM OSC OLC re Hatch Act

Dan Epstein on Radio America

Check out this short clip from a Radio America interview with COA Executive Director Dan Epstein.

The Hill: Watchdog slams DNC, Sebelius in FEC complaint

Watchdog slams DNC, Sebelius in FEC complaint

By Elise Viebeck – 01/30/13 04:30 PM ET

A government watchdog group is claiming that the Democratic National Committee (DNC) failed to properly disclose its support for a 2011 trip in which Kathleen Sebelius violated the Hatch Act.
The DNC classified its payment to the Health and Human Services (HHS) Department, which Sebelius leads, as an “operating” rather than an “independent” expenditure, Cause of Action said.
The group filed a complaint with the Federal Election Commission (FEC) on Wednesday.

“What has come to light in our investigation is that the reimbursement for [Sebelius’s] campaigning wasn’t properly filed by the DNC,” said Cause of Action Executive Director Dan Epstein. “The FEC has an obligation to investigate and take appropriate measures to enforce their own rules.”

In September, federal investigators found Sebelius guilty of making “extemporaneous partisan remarks” during a speech at a Human Rights Campaign gala last February. The comments amounted to a violation of the Hatch Act, which bans some political activity by government employees, the Office of Special Counsel said.
The White House responded by saying that the U.S. Treasury was repaid and Sebelius “met with ethics experts to ensure this never happens again.”
The incident prompted criticism from Republicans, and Cause of Action slammed President Obama on Wednesday for giving Sebelius “a pass on the most high-profile Hatch Act violation in history.”
The group called on federal investigators to probe the actions of a Sebelius aide, A.J. Pearlman, for whom the DNC also reimbursed some expenses.