Posted on May 22, 2013
Is the Department of Health and Human Services engaged in a domestic Iran-Contra?
Major news outlets in recent days have reported that U.S. Department of Health and Human Services Secretary Kathleen Sebelius is raising money from the private sector—including from health-care executives—for use by a private entity that is helping to implement ObamaCare. The entity, Enroll America, is run by a former White House aide.
The Washington Post quoted an HHS spokesman last week saying, "We requested additional money [from Congress] . . . but we didn't receive any additional funding for the exchanges. So we had to come up with Plan B."
My immediate thought was: Isn't "Plan B" what got Oliver North in trouble during the 1980s?
While working in the Reagan administration, Col. North was accused of using money raised in an arms-for-hostages swap with Iran to fund and work with private organizations providing military support to rebel armies in Nicaragua. North was found to have done this even though Congress had refused to provide funding and prohibited spending any available funds for such purposes.
A select Joint Committee of Congress investigated what became known as Iran-Contra. The problem was not just where the money came from, but also where and how it was spent. Article I of the U.S. Constitution does not permit government officials to spend money that Congress has refused to authorize or appropriate. Federal laws such as the Anti-Deficiency Act make this behavior unlawful.
There is, of course, a difference between Nicaraguan rebels and health care. With Iran-Contra, Congress had also prohibited support for the rebels, while in the case of health-care funding, Congress has refused to provide the amounts that the administration has asked for. But the principle and the legal prohibitions are the same.
The report of the bipartisan majority of the Iran-Contra Select Committee summarized the law in November 1987: "The Constitution does prohibit receipt and collection of such funds by this government absent an appropriation. This appropriation may not be evaded by use of a nominally private entity if the entity is in reality an arm of the government and the government is able to direct how the money is spent."
The report also said: "Congress's exclusive control over the expenditure of funds cannot legally be evaded though the use of gifts or donations to the executive branch. Were it otherwise, a president whose appropriation requests were rejected by Congress could raise money through private sources or from other countries for armies, military actions, arms systems or even domestic programs." Note: even domestic programs.
In July 1987, President Reagan's Secretary of State, George Shultz, testified before Congress regarding the Iran-Contra affair: "You cannot spend funds the Congress doesn't either authorize you to obtain or appropriate. That is what the Constitution says, and we have to stick to it. Now, I will join everybody in saying that sometimes it gets doggone frustrating with what the Congress does or doesn't do, and I can be critical. However, that's the system, and we have to accept it, and then we have an argument about it and try to persuade you otherwise."
Our country's Founders—at least most of them—did not want a king. So they included in the Constitution a Congress and a Bill of Rights to curb executive power. Congress's exclusive power of the purse is the strongest such curb.
The Obama administration is not the first to chafe under these restraints, but it has been among the most flagrant in ignoring them.
To avoid scrutiny by appropriations committees, the administration seems to have created more czars than the Romanovs. It has propounded far-reaching executive orders—on immigration, for example—and used a simple waiver authority to impose new federal education mandates on states, in effect, turning the U.S. Department of Education into a national school board. To circumvent the Senate's constitutional role to advise and consent on nominations, President Obama has made so-called recess appointments when the Senate wasn't in recess—appointments that two federal appellate courts agreed would be unconstitutional.
Last week, chairmen and ranking Republicans on five congressional committees in both houses of Congress asked the Government Accountability Office to find out the facts. Is Ms. Sebelius raising funds for a private entity and then coordinating with that entity to do something Congress has refused to authorize, or for which it has refused to appropriate funds? And is she raising money from organizations she regulates, in violation of ethics laws?
If the money being raised by Ms. Sebelius is being spent to do an end-run around Congress, then the Obama administration had better brush up on its Iran-Contra history.
Mr. Alexander, a U.S. senator from Tennessee, is the ranking Republican on the Senate committee that oversees health policy.
A version of this article appeared May 23, 2013, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: Kathleen Sebelius, Meet Oliver North.