IG report finds Trump health official broke rules with communications contracts

A federal inspector general report finds that the Centers for Medicare and Medicaid Services (CMS) and its chief, Seema Verma, violated rules around the management of contracts with GOP-aligned communications consultants.

The Department of Health and Human Services (HHS) Inspector General, in a report issued on Thursday, found that CMS improperly "allowed a subcontractor individual to perform inherently governmental functions, such as making managerial decisions and directing CMS employees," as part of $6.4 million in strategic communications contracts. 

The report finds that the communications consultants, from firms including Porter Novelli and Nahigian Strategies, performed some tasks that the government already had employees in the Office of Communications to perform, including "writing social media" and "National media pitching for Administrator."

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"These tasks are similar in nature to the types of services that CMS’s Office of Communications employees perform," the report said, noting the risk that the move "circumvents civil service laws."

"Another risk is the loss of Government control over and accountability for mission-related policy and program decisions, which may increase vulnerability to waste, fraud, or abuse," the report found.

The Department of Health and Human Services concurred with the recommendations and said it would review its contracts, in a response included in the report.

Verma, though, pushed back on the findings in a response included in the report, pointing to "unsubstantiated assumptions and incomplete analyses."

"CMS contractor employees never had ultimate 'direction or control' of any government employees; instead, they were part of a collaborative effort to effectively communicate policy announcements, develop and propose recommendations for messaging, and craft cross-cutting agency communications strategies," she wrote.

Michael Caputo, an HHS spokesman, also noted the report did not find Verma improperly tried to use the contracts to boost her reputation, a concern that congressional Democrats had raised.

"Despite attempts by some in the media and highly-partisan members of Congress to make a mountain out of molehill, the Office of the Inspector General found no fault with how strategic communications contracts were awarded -- nor does the report mention specious accusations surrounding boosting one’s personal brand," Caputo said in a statement. "Its findings are based on arcane contracting rules that remain the subject of longstanding confusion and debate across the entire federal government."

--Updated at 10:44 a.m.