White House's Medicare Videos Are Ruled Illegal

The consequences of the ruling were not immediately clear. The accounting office does not have law enforcement powers, but its decisions on federal spending are usually considered authoritative and are taken seriously by officials in the executive branch of the government.

The decision fuels a raging political debate over the new Medicare law. President Bush and many Republicans in Congress say the law will provide immense assistance to millions of elderly and disabled people. But Democrats say the law will do little for the elderly and is so seriously flawed that the government had to resort to an illegal public relations campaign to sell it to voters.

The General Accounting Office said that a specific part of the videos, a made-for-television "story package," violated the prohibition on using taxpayer money for propaganda.

People seeing the videos in a newscast would "believe that the information came from a nongovernment source or neutral party," it said.

William A. Pierce, a spokesman for the Department of Health and Human Services, who helped develop the videos, said: "We disagree. It's not covert. TV stations knew the videos came from us and could have identified the government as the source if they had wanted to."

The accounting office dismissed that argument. The intended audience, it said, was not news directors, but viewers, and "the video news releases did not alert viewers that the Centers for Medicare and Medicaid Services was the source."

Moreover, it said, "some news organizations indicated that they misread the label or they mistook the story package as an independent journalist news story."

Two videos end with the voice of a woman who says, "In Washington, I'm Karen Ryan reporting." A third video is narrated, in Spanish, by a man who identifies himself as "Alberto Garcia reporting." The scripts were prepared by the Bush administration at the Centers for Medicare and Medicaid Services, a unit of the Department of Health and Human Services.

The accounting office said the videos were "not strictly factual news stories" and were flawed by "notable omissions and weaknesses" in their explanation of the Medicare law. But the main problem, it said, is that they were "misleading as to source."

The government, it said, served up a "purported news story" using "alleged reporters" to read scripts prepared by the government, but "nothing in the story packages permits the viewer to know that Karen Ryan and Alberto Garcia were paid with federal funds."

Federal law prohibits the use of federal money for "publicity or propaganda purposes" not authorized by Congress. The accounting office has found that federal agencies violated this restriction when they disseminated editorials and newspaper articles written by the government without identifying the source.

The accounting office said the administration's misuse of federal money "also constitutes a violation of the Antideficiency Act," which prohibits spending in excess of appropriations. Under the law, the secretary of health and human services, Tommy G. Thompson, must report the violation to Congress and the president, with "a statement of actions taken" to prevent a recurrence.

The Antideficiency Act, derived from a law passed in 1870, is one of the major statutes by which Congress exercises its constitutional control of the purse.

Medicare officials are unlikely to face any penalties. David M. Walker, the comptroller general of the United States, who is head of the General Accounting Office, said, "We do not have reason to believe that this violation was knowing and willful, and we are not in the enforcement business."

Senator Frank R. Lautenberg, Democrat of New Jersey, said he was drafting legislation that would require the Bush campaign to reimburse the Medicare trust fund for the cost of the videos. The administration put the cost at $42,750, but refused to provide any documentation.

Senator John Kerry, the likely Democratic presidential nominee, said it confirmed his view that the administration had improperly tapped the Medicare trust fund to pay for political advertisements.

Under the Medicare law, the government is encouraging the use of drug discount cards for the next 18 months. In 2006, Medicare will provide insurance coverage for certain outpatient drug costs.

The Bush administration hired Ketchum Inc. to disseminate information about the Medicare law, and Ketchum hired another company, Home Front Communications, to create the videos. The materials were distributed to television stations by satellite, mail and a syndicated news service, CNN Newsource, the ruling said.