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Medicare administrator won't rule out government-produced video news releases

WASHINGTON—Medicare administrator Mark McClellan on Tuesday wouldn't rule out using government-produced video news releases in the future to inform seniors about the new Medicare prescription drug benefit.

A congressional agency, the Government Accountability Office, has concluded that the made-for-TV releases, which mimic actual news segments, may violate a ban on government propaganda. But a Justice Department opinion found that they don't as long as the information is truthful.

In testimony before the Senate Homeland Security and Governmental Affairs Committee, McClellan said Medicare would "fully comply with the law" regarding government-made video news releases. But he wouldn't pledge to ban their use, which Sen. Frank Lautenberg, D-N.J., and Sen. Carl Levin, D-Mich., pressed him to do.

Federal agencies, including McClellan's, have sometimes sent video news releases, in which actors portray newscasters reporting on government activities, to television stations for public broadcast. Their use has increased over the last decade as TV news budgets shrank and stations scrambled to make more money from their local news shows.

The material is supposed to alert viewers that it's a government communication, but that can be edited out and TV stations and government policy promotion offices know it. Press reports have charged that the Bush administration, and to a lesser extent the Clinton administration, made it easy to edit out the government's role.

In those instances, video news releases constitute covert propaganda and violate federal laws that prohibit the use of public money for such purposes, according to the GAO. In a May 2004 investigation of so-called VNRs touting the new Medicare drug benefit, the GAO held that the videos' failure to name Medicare as their source violated a portion of the federal Anti-Deficiency Act dealing with propaganda. The provision bans spending public funds on "materials that are self-aggrandizing, purely partisan in nature, or covert as to source," the GAO report said.

But McClellan testified Tuesday that the binding interpretation for him was a determination by the Justice Department's Office of Legal Counsel that VNRs are legal as long as the information is accurate. That finding, which was sent to federal department and agency directors, dismayed many journalists and administration critics who were already fuming over instances in which the administration hired several journalists who spoke and wrote favorably about administration policies without disclosing their government contracts.

"This type of covert journalism is just plain wrong. ... The government should be protecting the free press, not trying to buy it," Levin said.

As long as the videos make clear they are government products, the administration is on sound legal and ethical ground, said Barbara Cochran, president of The Radio-Television News Directors Association, a trade organization representing electronic-news media executives. But, she warned in an interview following McClellan's testimony, "don't try to fool your way onto the news."

McClellan testified that the disputed Medicare videos predated his arrival at the agency. He added that no new Medicare videos had since been made. After the hearing, McClellan said he didn't anticipate any such videos being a "main part" of outreach to seniors about the Medicare drug benefit that begins in 2006.

McClellan also told lawmakers that efforts to implement the Medicare drug benefit were going smoothly.

He said that to smooth the transition into the new program, Medicare would work far in advance with seniors and private plans that want early outreach. In addition, McClellan said Medicare:

_ Has hired 345 of 500 planned new employees, many of them to implement the drug benefit.

_ Expects to have at least two drug plans competing in all areas of the country.

_ Expects more than 90 percent of employers to continue providing retiree drug benefits once the Medicare drug benefit is up and running.

_ Has tested its phone operators and found that they provide accurate information to beneficiaries in 90 percent of calls.

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(c) 2005, Knight Ridder/Tribune Information Services.

ARCHIVE PHOTOS on KRT Direct (from KRT Photo Service, 202-383-6099): Mark McClellan

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