The juggernaut campaign to make Obamacare a reality has financially benefited Democratic consulting firms that are closely connected to President Barack Obama and two top advisers, according to a report by the Associated Press.
A media consulting firm with ties to White House senior strategist David Axelrod was retained to produce a multi-million dollar ad campaign touting healthcare reform.
AKPD Message and Media, which was founded by Axelrod, and another media firm GMMB were paid $24 million by Health Economy Now and Americans for Stable Quality Care -- a consortium that includes Pharmaceutical Research & Manufacturers of America ( PhRMA) -- to produce ads touting Obamacare.
The firms received over $300 million to run advertising for Obama's presidential campaign.
Earlier this summer, Obama hailed an agreement with PhRMA to target $80 billion in savings as part of his reform agenda. In early August, a coalition of interest groups, including PhRMA, pledged $150 million to help develop Obamacare.
When Axelrod left AKPD Message and Media in 2008, he was owed a $2 million severance. Some Republican critics have queried whether the firm was hired help fund this severance deal.
Meanwhile, according to the AP report, the plot thickens as it was learned that Axelrod's son Michael and Obama's campaign manager David Plouffe work for AKPD Message and Media.
The ads being churned out in the mega-campaign press for changes in healthcare policy.
Healthy Economy Now has adopted as its mantra Obama’s long-time credo that health care costs are delaying the country's economic recovery and that changes are needed if the economy is to rebound.
Despite appearances, the AP reported that there is no evidence that Axelrod directly profited from the group's ads. Indeed, Axelrod reportedly took pains to separate himself from AKPD when he joined Obama's White House.
Some now suggest that Obama’s crusade to win the public over on healthcare and make good his promise to change business-as-usual in Washington may suffer from the latest revelations.
Sheila Krumholz, executive director of the Center for Responsive Politics, told the AP: "Even if these are obvious bedfellows and kind of standard PR maneuvers, it still stands to undercut Obama's credibility. The potential take-away from the public is 'friends in cahoots to engineer a grass roots result.'"
In a quick damage-control move, White House spokesman Ben LaBolt said that Axelrod has had no communications with Healthy Economy Now or with Americans for Stable Quality Care, and his severance payments aren't impacted by the ad contracts.
Furthermore, LaBolt noted that Axelrod's son, David, the salaried AKPD employee, doesn't work with either coalition "or stand to benefit from that work. David Axelrod has fully complied with the toughest-ever ethics rules for administration officials, including divesting from AKPD before the administration began."
Ken Johnson, a PhRMA senior vice president, conceded that GMMB and AKPD were the only two firms working on the $24 million in ads.
"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," 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."
"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 Obama's presidential campaign.
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