- The Washington Times - Tuesday, August 25, 2009

President Obama’s push for a national health care overhaul is providing a financial windfall in the election off-season to Democratic consulting firms that are closely connected to the president and two top advisers.

Coalitions of interest groups running at least $24 million in pro-overhaul ads hired GMMB, which worked for Mr. Obama’s 2008 campaign and whose partners include a top Obama campaign strategist. They also hired AKPD Message and Media, which was founded by David Axelrod, a top adviser to Mr. Obama’s campaign and now to the president.

AKPD did work for Mr. Obama’s campaign, and Mr. Axelrod’s son Michael and Mr. Obama’s former campaign manager David Plouffe work there.

The firms were hired by Americans for Stable Quality Care and its predecessor, Healthy Economy Now. Each was formed by a coalition of interests with big stakes in the health care debate, including the drug-maker lobby PhRMA, the American Medical Association, the Service Employees International Union and Families USA, which calls itself “the voice for health care consumers.”

Their ads press for changes in health care policy. Healthy Economy Now made one of the same arguments that Mr. Obama does: that health care costs are delaying the country’s economic recovery and changes are needed if the economy is to rebound.

There is no evidence that Mr. Axelrod directly profited from the group’s ads. Mr. Axelrod took steps to separate himself from AKPD when he joined the Obama White House. AKPD owes him $2 million from his stock sale and will make preset payments over four years, starting with $350,000 on Dec. 31, according to Mr. Axelrod’s personal financial disclosure report.

A larger issue is a network of relationships and overlapping interests that resembles some seen in past administrations and could prove a problem as Mr. Obama tries to win over the public on health care and fulfill his promise to change the way Washington works, said Sheila Krumholz, executive director of the Center for Responsive Politics, a government watchdog group.

“Even if these are obvious bedfellows and kind of standard PR maneuvers, it still stands to undercut Obama’s credibility,” Ms. Krumholz said. “The potential take-away from the public is ‘friends in cahoots to engineer a grass-roots result.’”

White House spokesman Ben LaBolt said Mr. Axelrod has had no communications with Healthy Economy Now or Americans for Stable Quality Care, and his payments aren’t affected by the ad contracts. Mr. Axelrod’s son, a salaried AKPD employee, doesn’t work with either coalition “or stand to benefit from that work,” Mr. LaBolt said.

“David Axelrod has fully complied with the toughest-ever ethics rules for administration officials, including divesting from AKPD before the administration began,” Mr. LaBolt said.

Ken Johnson, a PhRMA senior vice president, said GMMB and AKPD were the only two firms working on the $24 million in ads. He declined to reveal how much each was paid beyond saying that each received a small percentage of the total. The coalition’s campaign team decided to hire the two firms, he said.

“In a perfect world, it’s a distraction we don’t need right now, but these are very gifted consultants who have done very good work,” Mr. Johnson said. “And it’s also important to remember that at the end of the day, the coalition partners determine the message.”

Healthy Economy Now spokesman Jeremy Van Ess said the two firms were hired because “they are the best at what they do. Period.” The coalition didn’t seek approval or direction on any of its activities from the White House, said Mr. Van Ess, a partner in a consulting firm that has worked on Democratic Senate election activities and a former speechwriter for Senate Majority Leader Harry Reid, Nevada Democrat.

AKPD and GMMB both proudly proclaim their connections to Mr. Obama on their Web sites.

AKPD has a full page on Mr. Axelrod that includes pictures of Mr. Obama. In one photo, Mr. Obama hugs Mr. Plouffe on election night last November.

“We are deeply honored to have been part of Barack Obama’s historic campaign to change America and the world,” GMMB says on its Web site. GMMB’s partners include Jim Margolis, a senior strategist for Mr. Obama’s presidential campaign.

Both GMMB and AKPD also have worked for Democrats this year.

The Democratic National Committee paid AKPD at least $106,000 for polling, media production, communications consulting and travel costs from February through April. The Democratic Congressional Campaign Committee paid GMMB roughly $75,000 from February through June for ads. GMMB also took in at least $9,000 this year from Mr. Reid’s political action committee for communications consulting.

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