Strassel: Axelrod's ObamaCare Dollars

Emails suggest the White House pushed business to the presidential adviser's former firm to sell the health-care law

WSJ: Rewind to 2009. The fight over ObamaCare is raging, and a few news outlets report that something looks ethically rotten in the White House. An outside group funded by industry is paying the former firm of senior presidential adviser David Axelrod to run ads in favor of the bill. That firm, AKPD Message and Media, still owes Mr. Axelrod money and employs his son.

The story quickly died, but emails recently released by the House Energy and Commerce Committee ought to resurrect it. The emails suggest the White House was intimately involved both in creating this lobby and hiring Mr. Axelrod's firm — which is as big an ethical no-no as it gets.

Mr. Axelrod—who left the White House last year—started AKPD in 1985. The firm earned millions helping run Barack Obama's 2008 campaign. Mr. Axelrod moved to the White House in 2009 and agreed to have AKPD buy him out for $2 million. But AKPD chose to pay Mr. Axelrod in annual installments—even as he worked in the West Wing. This agreement somehow passed muster with the Office of Government Ethics, though the situation at the very least should have walled off AKPD from working on White-House priorities.

It didn't. The White House and industry were working hand-in-glove to pass ObamaCare in 2009, and among the vehicles supplying ad support was an outfit named Healthy Economy Now (HEN). News stories at the time described this as a "coalition" that included the Pharmaceutical Research and Manufacturers of America (PhRMA), the American Medical Association, and labor groups—suggesting these entities had started and controlled it.

House emails show HEN was in fact born at an April 15, 2009 meeting arranged by then-White House aide Jim Messina and a chief of staff for Democratic Sen. Max Baucus. The two politicos met at the Democratic Senatorial Campaign Committee (DSCC) and invited representatives of business and labor.

Reuters:  Obama campaign strategist David Axelrod

A Service Employees International Union attendee sent an email to colleagues noting she'd been invited by the Baucus staffer, explaining: "Also present was Jim Messina. . . . They basically want to see adds linking HC reform to the economy. . . . there were not a lot of details, but we were told that we wd be getting a phone call. well that call came today."

The call was from Nick Baldick, a Democratic consultant who had worked on the Obama campaign and for the DSCC. Mr. Baldick started HEN. The only job of PhRMA and others was to fund it.

Meanwhile, Mr. Axelrod's old firm was hired to run the ads promoting ObamaCare. At the time, a HEN spokesman said HEN had done the hiring. But the emails suggest otherwise. In email after email, the contributors to HEN refer to four men as the "White House" team running health care. They included John Del Cecato and Larry Grisolano (partners at AKPD), as well as Andy Grossman (who once ran the DSCC) and Erik Smith, who had been a paid adviser to the Obama presidential campaign.

In one email, PhRMA consultant Steve McMahon calls these four the "WH-designated folks." He explains to colleagues that Messrs. Grossman, Grisolano and Del Cecato "are very close to Axelrod," and that "they have been put in charge of the campaign to pass health reform." Ron Pollack, whose Families USA was part of the HEN coalition, explained to colleagues that "the team that is working with the White House on health-care reform. . . . [Grossman, Smith, Del Cecato, Grisolano] . . . would like to get together with us." This would provide "guidance from the White House about their messaging."

According to White House visitor logs, Mr. Smith had 28 appointments scheduled between May and August—17 made through Mr. Messina or his assistant. Mr. Grossman appears in the logs at least 19 times. Messrs. Del Cecato and Grisolano of AKPD also visited in the spring and summer, at least twice with Mr. Axelrod, who was deep in the health-care fight.

A 2009 PhRMA memo also makes clear that AKPD had been chosen before PhRMA joined HEN. It's also clear that some contributors didn't like the conflict of interest. When, in July 2009, a media outlet prepared to report AKPD's hiring, a PhRMA participant said: "This is a big problem." Mr. Baldick advises: "just say, AKPD is not working for PhRMA." AKPD and another firm, GMMB, would handle $12 million in ad business from HEN and work for a successor 501(c)4.

A basic rule of White House ethics is to avoid even the appearance of self-dealing or nepotism. If Mr. Axelrod or his West Wing chums pushed political business toward Mr. Axelrod's former firm, they contributed to his son's salary as well as to the ability of the firm to pay Mr. Axelrod what it still owed him. Could you imagine the press frenzy if Karl Rove had done the same after he joined the White House?

Messrs. Axelrod and Messina are now in Chicago running Mr. Obama's campaign. Mr. Axelrod, the White House and a partner for AKPD didn't respond to requests for comment on their role in HEN, the tapping of Mr. Baldick, and the redolent hiring of AKPD. Until the White House explains all this, voters can fairly conclude that the President's political team took their Chicago brand of ethics into the White House.

Write to kim@wsj.com

A version of this article appeared June 22, 2012, on page A15 in the U.S. edition of The Wall Street Journal, with the headline: Axelrod's ObamaCare Dollars.

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Congratulations! The headline on Drudge earlier today was 'It's official: no public option.'

Under fire, President Obama shifts strategy

The headline on Drudge earlier today was 'It's official: no public option.'

Congratulations, America! Because you stood up, the President and the government heard you. The spineless wonders probably only caved because they care about their own hides, BUT if you didn't stand up you can bet Universal Health would have been passed. But don't celebrate yet -- there is still work to be done. Think the progressives will give up that easily?

This is a great victory but it is not over… for the Healthcare (Obamacare) fight, the fight against Remaking Our Country, the fight against Cap and Trade, or the fight of building a new Social Infrastructure. It is step one in a victory, but this victory proves that every voice makes a difference!! (For now Obama will lick his wounds and probably accept pretty much anything so he can say he passed a healthcare bill). Time for Common Sense to take over in the healthcare reform debate. Keep up the pressure America for tort reform, fraud reform, and common sense solutions!!!

Axelrod on White House Health Care Strategy

Aides to President Barack Obama are putting the final touches on a new strategy to help Democrats recover from a brutal August recess by specifying what Obama wants to see in a compromise health care deal and directly confronting other trouble spots, West Wing officials tell POLITICO.

Obama is considering detailing his health-care demands in a major speech as soon as next week, when Congress returns from the August recess. And although House leaders have said their members will demand the inclusion of a public insurance option, Obama has no plans to insist on it himself, the officials said.

“We’re entering a new season,” senior adviser David Axelrod said in a telephone interview. “It’s time to synthesize and harmonize these strands and get this done. We’re confident that we can do that. But obviously it is a different phase. We’re going to approach it in a different way. The president is going to be very active.”

Top officials privately concede the past six weeks have taken their toll on Obama's popularity. But the officials also see the new diminished expectations as an opportunity to prove their critics wrong by signing a health care law, showing progress in Afghanistan, and using this month's anniversary of the fall of Lehman Brothers to push for a crackdown on Wall Street.

On health care, Obama’s willingness to forgo the public option is sure to anger his party’s liberal base. But some administration officials welcome a showdown with liberal lawmakers if they argue they would rather have no health care law than an incremental one. The confrontation would allow Obama to show he is willing to stare down his own party to get things done.

“We have been saying all along that the most important part of this debate is not the public option, but rather ensuring choice and competition,” an aide said. “There are lots of different ways to get there.”

The timing, format, venue and content of Obama's presentation are still being debated in the West Wing. Aides have discussed whether to stick to broad principles, or to send specific legislative language to Capitol Hill. Some hybrid is likely, the officials said.

“I’m not going to put a date on any of this,” Axelrod said. “But I think it’s fairly obvious that we’re not in the second inning. We’re not in the fourth inning. We’re in the eighth or ninth inning here, and so there’s not a lot of time to waste.”

Obama's specifics will include many of the principles he has spelled out before, and aides did not want to telegraph make-or-break demands. But Axelrod and others are making plain that Obama will assert himself more aggressively — a clear sign that the president will start dictating terms to Congress.

"His goal is to create the best possible situation for consumers, create competition and choice," Axelrod said. "We want to bring a measure of security to people who have health insurance today. We want to help those who don't have coverage today, because they can't afford it, get insurance they can afford. And we want to do it in a way that reduces the overall cost of the system as a whole."

Also this fall, Obama wants to slap new regulations on Wall Street firms, a goal that is now considered a higher priority than cap-and-trade energy legislation in the West Wing. White House officials think the legislation will show voters, especially wavering independents, that he is serious about making the culprits of the economic crisis pay. It also helps that it doesn't carry a big price tag, like other Obama priorities.

The president also plans to send Congress a report on Afghanistan by Sept. 24 that is designed to build patience after two months in a row of the highest U.S. casualties since the invasion eight years ago. Aides say they recognize they need to show progress over the next 12 to 18 months, or risk losing the support of key Democrats in Congress, who already have balked at funding Obama’s 20,000-troop buildup.

But health care remains front-and-center in Obama’s fall strategy. “I understand the governing wisdom here in town as to where this is right now,” Axelrod said. “I feel good about where it is right now. I understand that there’s been a lot of controversy. I understand that there’s been a lot of politics. But the truth is, we’re a lot closer to achieving something than many thought possible. People look to the president for leadership on this and other issues. He feels passionately about this, and you can look for him to provide that leadership.”

Obama has been criticized for deciding to cede much of the debate to Capitol Hill -- or, as Axelrod put it, “allow Congress to consider the whole range of ideas.”

“History will judge whether this was right or it was wrong,” Axelrod said. “We feel strongly that it was right. As a result of it, we have broad consensus on over 80 percent of this stuff, and a lot of good ideas about how to achieve the other 20. Now, people are looking to the president and the president is eager to help lead that process of harmonizing these different elements and completing this process so that we can solve what is a big problem in the lives of the American people, for our businesses and our economy.”

White House officials say they are looking forward to "a break from the August break" -- a chance to take back control of the debate after a grim month where news coverage of the issue was dominated by vocal, emotional opponents at lawmakers’ town meetings, railing against the cost and complexity of the plans being debated.

So Obama and Democrats will return from vacation wounded, divided and uncertain of the best way to turn things around. Many Democrats, especially in the House, were spooked over break by the rowdy town hall meetings and flurry of polls showing independent voters skeptical of their leadership and spending plans.

The mood swing is hitting some top leaders hard: Senate Majority Leader Harry Reid (D-Nev.), for instance, is trailing little-known GOP contenders in his re-election race now. The news swing has been no less brutal. There has been saturation coverage of the town halls and rising casualties in Afghanistan -- the latter leading to a big drop in support for the war.

All of this makes for a tumultuous -- and wildly unpredictable -- fall for Obama and his party.

Axelrod said he isn’t worried. “Part of it is born of long experience,” he said. “In Washington, every day is Election Day. I’d be lying to you if I told you I don’t look at polls -- I do. But I’ve also learned that you have to keep your eye on the horizon here and not get bogged down. I am not Polyannish, but I am also not given to the hysteria that's endemic to this town.”

By MIKE ALLEN & JIM VANDEHEI

Source: Politico

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