Did soon to be Republican presidential nominee Mitt Romney profit from healthcare companies that committed massive Medicare fraud? Absolutely, as the record shows that was the case in at least two instances. What is less clear is whether he was aware of these criminal activities. In this regard the record suggests that it would have been difficult for Romney to miss the fraud, and if he is the master strategist and corporate know it all that he claims to be, he would not have missed it.
The companies are Damon Clinical Laboratories, which in 2004 paid the then-largest healthcare criminal fraud fine -- $35.3 million -- as well as a $83.7 million civil fine, and industry giant Health Care Corporation of America, which in 2002 agreed to a $1.7 billion settlement with the Justice Department because of accusations of wide ranging fraud.
Medicare is much in the news not because of pervasive healthcare industry fraud, but because Romney and Paul Ryan, his vice presidential pick (who reportedly was selected because of a $100 million bribe from one of the Koch brothers), are ceaselessly painting themselves as defenders of Medicare by obfuscating what President Obama intends to do with $700 billion in cuts he has made, which is distribute this money more equitably through the Affordable Care Act.
While their claim is utterly lacking in credibility, a potential bombshell lurks behind it: That in the cases of Damon and HCA, as well as possibly other companies, the eagle-eyed Romney, as CEO of Bain Capital and still a beneficiary of its money-making prowess, saw the fraudulent activities of these companies not as a turn-off but an opportunity to make big bucks because both were adept at milking greater profits even if it was at substantial taxpayer expense.
In 1988, Damon began the systematic practice of Medicare fraud that ended up costing taxpayers $400 million, according to the prosecutors' estimate. In 1990, with Romney at the helm, Bain bought a minority stake in Damon. He took a seat on its board of directors and was on its Strategic Planning Committee. Romney later said he believed Damon CEO Robert Rosen's claim that the company was in compliance with government regulations. In other words, he was uncurious about whether the claim was accurate and whether Bain had bought into a company that might not be operating above board.
Then in 1993, Corning bought Damon with Romney's encouragement, netting Bain between $7.4 million and $12 million, depending upon who is doing the counting. Romney walked away with a paltry $437,000. Corning immediately uncovered the fraud that had been perpetrated under Romney's nose for upwards of four years and went to the feds.
In his unsuccessful 1994 bid to unseat Ted Kennedy, Romney boasted about the role he played in Damon's growth, then in 2002 when running for Massachusetts governor he had the temerity to claim that he helped uncover the fraud, which if nothing else shows that Romney had no inhibitions about lying through his ivories years before his presidential bids.
The key to HCA's success at generating enormous profits from its 163 hospitals during the Bush Recession, a time when many hospitals were going broke, was based on getting more revenue from insurance companies and patients by billing more aggressively, reducing emergency room overcrowding by refusing to treat some uninsured patients, reducing staffing to inadequate levels, providing kickbacks to doctors who referred patients to its hospitals, doing unnecessary surgeries, and of course fraudulent Medicare billing that prosecutors' estimated ran into the billions of dollars.
Rick Scott was HCA's CEO during much of the period when there was fraudulent billing. He resigned but was not charged in the fraud, went on to become a venture capitalist and then Florida's governor. He is as enthusiastic a Romney supporter as former Governor Charlie Christ is a detractor.
When HCA's profits began sagging in 2006 because of fewer patient admissions, in part as a result of its skinflint practices, investment bankers from Merrill Lynch approached Bain and two other private equity firms to discuss a buyout, which took place later that year.
In the years since, HCA's industry-leading profit growth raised the value of its holdings to nearly three and a half times the initial investment of Bain and the two other firms in the $33 billion deal. The firms -- with Romney along for the ride -- took the money and ran. In 2011, HCA once again became a public company and floated a successful stock offering.
* * * * *Most people naively view Medicare as a huge social program, but it is much more.
Medicare is a system of contracts that transfers more than $500 billion in taxpayer funds each year into the private sector. While Medicare has taken the profit out of providing health insurance to seniors, it has left untouched the profit motive in the delivery of healthcare services.
As one commentator put it, "Medicare's billions have played a central role in building the commercial healthcare leviathan it is today."This begins to explain why providers, including individual physicians running Medicare mills, as well as Fortune 500 pharmaceutical and medical device companies, regularly try to bilk the system for more than they are entitled to, but in the forefront are for-profit hospital systems like HCA. At the end of the day, it is these rapacious fraudsters and not poor and indigent seniors who created the Medicare crisis.
* * * * *I feel liked a damned fool for not seeing it coming.
The corporatocracy has become a shadow government that in some respects is more powerful than the federal government. A tiny segment of the population, now commonly referred to as 1 percenters, has virtually all of the wealth as the chasm between the rich and middle class and poor grows apace. The 1 percenters own practically everything else, so why not the White House? Could this Vampire Elite do worse than with Romney, who is one of their own, as president? Unlikely.
Can the money that Bain and Romney made from Damon and HCA and Romney continues to make because of the millions he receives in largely untaxed stock dividends be considered blood money? Absolutely. This is because Romney tries to project a holier-than-thou image and has boasted about all of the great things that Bain did under his tutelage.
Meanwhile, there probably is a smoking gun in the form of someone who worked for Bain or in Bain, Damon or HCA documents that reveal Romney was well aware that taxpayers were being fleeced. My gun is a pea shooter, so concerned voters should hope that The New York Times, which has aggressively investigated HCA's dark side in recent weeks, or some other media outlet with a conscience is looking for that smoking gun as Romney is coronated later this week in Tampa.
When found, that alone would disqualify Mitt Romney to run for president, let alone be president.