WSJ, Drudge Invent Obama Administration Health Care Reform Conflict Of Interest


The Wall Street Journal's Kim Strassel invented a conflict of interest to accuse former White House adviser David Axelrod of profiting from health care reform.

In an article highlighted by Matt Drudge, Strassel claimed Axelrod unethically received money from his former firm, AKPD, at the same time that the firm was producing ads on behalf of a coalition of labor and business that supported health care reform. Strassel wrote:

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 fact is that while Axelrod does receive a planned deferred compensation from AKPD, he did not ever receive money as a result of those ads.

According to Politico, Axelrod sold his stake in AKPD in 2008, long before the ads were commissioned. Rather than receive a lump-sum for the sale, he and the company elected for Axelrod to be paid in "preset annual installments." Politico also reported that a source familiar with AKPD's finances said the company did not need the revenue from the ads to pay Axelrod.

From Politico (emphasis added):

AKPD is now owned by a group of consultants who helped steer Obama's campaign, mostly while working at the firm, and ASK is owned Axelrod's former partners there. Both firms will pay his buyouts in preset annual installments starting at the end of this year, terms that were settled on prior to Axelrod's White House service.

Axelrod would have received the same amount of money from AKPD whether or not the ads ran. Or in other words, Strassel's attack is bunk.

Posted In
Government, Ethics
Wall Street Journal, The Drudge Report
Matt Drudge
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