Politico

Price investigation continues to roil HHS

Written by Lisa

Tom Price left his job as Health and Human Services secretary in September, but the investigation into his use of private jets for official travel now threatens to enmesh others in the department.

The department’s inspector-general’s probe will review who approved — or should have been approving — Price’s use of private jets on at least 26 trips from May to September, some of them quick jaunts on routes heavily traveled by commercial aircraft, according to three people with knowledge of the probe.

The investigation, along with escalating demands from Congress for information on how Price obtained permission to use at least $400,000 of taxpayer money for the private jets, adds an extra dose of uncertainty to a department that’s already roiled by questions of who will replace Price, and internal feuds over who may have leaked information about Price’s travels, according to current and former HHS officials.

Price’s use of corporate jets appears to run afoul of federal regulations stating that private travel should be approved only when commercial flights aren’t feasible, and the inspector-general probe is likely to put a spotlight on HHS Assistant Secretary for Administration John Bardis, the official designated in department rules as overseeing the travel approval process along with the HHS general counsel’s office.

Bardis is, in some ways, a unique appointee — a Georgia-based entrepreneur who was named by Price to the job in March. His medical-supply business MedAssets, which he founded and led until early 2015, is headquartered in Price’s former congressional district. The company was sold for $2.7 billion about two years ago, and Bardis’ resulting wealth from the sale — and generosity around the office — has led some in HHS to nickname him “the billionaire.”

Before joining the federal government, Bardis used his own corporate jets to fly executives, sometimes for charity missions, which may have made him more indulgent of Price’s requests for one, according to one individual who’s worked with him.

Federal contract records show that Price’s private charter flights were booked through Bardis’ office. But while Price resigned, Bardis remained at work on several HHS projects, including helping to draw up a cost-savings plan that is expected to result in significant personnel cuts across the agency. The plan has caused significant discomfort throughout the agency, which has only been compounded by the uncertainty surrounding the investigation into Price’s travel.

HHS declined to make Bardis available for an interview or answer questions about Bardis’ role in approving Price’s travel, or whether he or others raised any objections to the two dozen-plus charter flights Price took during his brief tenure.

“The Trump administration will work to ensure all officials follow appropriate rules and regulations when traveling, including seeking commercial options at all times appropriate and feasible, to ensure the efficient use of government resources,” an HHS spokesperson said in a statement.

In early November, Rep. Elijah Cummings of Maryland, ranking member on the House Oversight Committee, urged the committee to subpoena the White House and HHS to force comprehensive information about the flights, including cost and who was on them, after the department sent heavily redacted documents with few details. Oversight Committee Chairman Trey Gowdy (R-S.C.) and Cummings are overseeing the bipartisan probe.

The HHS documents, released by Cummings, identified three HHS aides who joined Price on private jets in April and May. White House counselor Kellyanne Conway also traveled with Price on several trips that focused on the opioid epidemic, and Cummings is demanding that the White House provide further information on her trips.

Price’s traveling companions aren’t responsible for the secretary’s decision to use private jets, but their presence on the trips could raise questions about whether they questioned his use of department resources for travel on private jets.

Meanwhile, current and former HHS officials also say speculation is rife about who will replace Price as the head of HHS, as well as the future of various aides with close ties to Price. POLITICO first reported in October that Alex Azar, a former drug company executive who worked in HHS during the George W. Bush administration, is the front-runner for the job.

Departures among political staffers have been limited, according to departmental sources, but that is expected to change after the next secretary is brought in. Although the two acting secretaries — Don Wright and Eric Hargan — have brought some stability, several staffers said the department is still grappling with uncertainty after Price’s abrupt resignation.

“Many Price allies know they’re vulnerable,” said one individual who works with the administration’s political appointees. “And the White House liaison [Tim Clark] brought in a lot of people … with little to no federal experience who aren’t quite sure how these transitions of power go.”

Low-grade feuding between different factions of HHS political appointees has also festered. Multiple officials say that they’ve been accused — sometimes by the same person — of leaking details of Price’s trips, leading to a series of POLITICO stories about his travel before the HHS secretary ultimately resigned on Sept. 29.

“It was bad before,” said one official, speaking on the condition of anonymity. The official noted that many appointees have different allegiances and didn’t know each other before joining HHS this year. “We had Trump people, Pence people, Price people … nobody trusts each other.”

Price’s immediate predecessors under former President Barack Obama rarely used private aircraft to travel. Kathleen Sebelius, who served as HHS secretary for more than five years, almost always flew on commercial planes domestically, and her successor Sylvia Mathews Burwell shirked private planes in the U.S., according to her former aides.

Sebelius has told POLITICO and other outlets that she took charter planes only to travel to remote villages in Alaska. But internal HHS documents, first obtained by Breitbart, show that she requested charter planes on four other occasions domestically and abroad over a period of 2½ years, including trips between Topeka, Kansas, and Omaha, Nebraska, and a journey from La Crosse, Wisconsin, to Mackinac Island in Michigan and then Detroit.

The domestic trips were approved by the HHS general counsel, according to memos from Sebelius’ chiefs of staff to former HHS Assistant Secretary for Administration Ned Holland and other top officials. Sebelius declined further comment.

Holland, who served as ASA for nearly six years under Sebelius, said it would have been within his responsibilities to flag issues with the use of charter jets and potential violations of federal travel regulations, along with HHS’ legal team. Holland knew Sebelius from her time in Kansas, where she was the state’s top insurance regulator and later became governor.

“We were essentially a sign-off,” said Holland, whose roughly 40-year career in the private sector included senior positions at Sprint and Embarq. “Unless there was some obvious or egregious problem, we would have approved it.”

Now, Holland’s shoes are filled by Bardis, who in 1999 founded MedAssets, which eventually grew into one of the largest group purchasing organizations in health care, where providers could shop for medical supplies and other equipment at cheaper prices.

As an industry leader, Bardis was viewed as a well-liked and warm person who was known for giving to charity and helping veterans — and repeatedly offering his own private plane to help in emergencies. Chris Van Gorder, CEO of Scripps Health, described in 2010 how Bardis used his private jet to shuttle health care workers back and forth from Haiti after that island’s devastating earthquake.

“He’s a pretty extraordinary guy,” said one individual who’s had dealings with Bardis.

Bardis abruptly resigned as CEO of MedAssets in February 2015 for “personal reasons,” according to a statement at the time, and the company was sold later that year for $2.7 billion. He began as HHS’ chief administrative officer in March, several weeks before Price, an orthopedic surgeon, began taking charter jets for routine travel in the United States.

Apart from the private jet contracts going through his office, Bardis’ fingerprints can be seen on some of Price’s choice of trips. In early August, Price traveled by charter jet to Colorado Springs to meet with U.S. Olympic officials and athletes at the nation’s Olympic training center. Bardis, a former leader of the U.S. Olympic wrestling team who was inducted into the National Wrestling Hall of Fame in 2013, helped coordinate Price’s visit and joined him at the site.

“John is definitely the first former Olympic coach to be HHS’s top administrative officer!” Price wrote in an HHS blog post touting his visit to the Olympic training center.

Bardis gave $2,500 to Price’s campaign fund in 2011 and another $5,200 in 2013 as the former House member sought reelection to his suburban Atlanta district. Bardis also has given to other Republicans, such as contributing $50,000 in 2015 to the Right to Rise Super PAC created to support Jeb Bush in the 2016 presidential election.

At HHS, Price tapped Bardis to help oversee Reimagine HHS, an initiative launched by Price and designed to revamp the agency’s staffing and structure and to make it more cost-efficient. The project was seen as a top priority, and the agency rushed to craft the plan across the summer; HHS hired Deloitte for a $1 million, two-month contract to support the initiative.

Price sent an agencywide email on Sept. 29 touting the next steps for Reimagine HHS, just minutes before he formally resigned. The email outlined top HHS officials who will be overseeing different parts of the process, including Bardis’ deputy at ASA, Jon Cordova, who is overseeing strategy on “Moving to a 21st Century Workforce.”

Unlike other senior HHS officials who have worked to roll back Obama-era rules on Obamacare insurance markets and contraception, and despite his donations to the GOP, Bardis is seen as largely apolitical in his administrative role. For instance, he spent years speaking favorably about the impact of Obamacare, calling the law a “game-changer” and defending it amid attacks led by Republicans — including Price at the time.

“The intent is to provide coverage for the people today who can’t get it,” Bardis said in October 2013, defending the law as the exchanges got off to a rocky start. “I believe that the spirit of the Affordable Care Act is a good thing.”

But Bardis’ future, like that of other leaders in the department, remains in doubt once the next HHS secretary is brought in. The inspector general also expects to wrap up its probe in the spring, according to two people familiar with the review.

If Bardis were to be cited in the inspector general’s report, he could face scrutiny from Congress or the new secretary.

“Nobody’s safe if you’re a political” appointee, one former HHS official said.

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