Obama nominates ex-drug lobbyist as top HHS lawyer

White House/Pete Souza

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  • Obama administration nominates ex-drug lobbyist as top @HHSGov lawyer

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  • Appointing a drug lobbyist as the top lawyer at HHS clashes with Obama's rhetoric about battling special interests

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  • "Nominating a drug lobbyist to help implement and defend Obamacare is only fitting." @TPCarney

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The Obama administration has nominated a former lobbyist for drug companies and hospitals to be the top lawyer at the Department of Health and Human Services.

William Schultz's nomination as general counsel of HHS once again demonstrates that Obama's lobbyist restrictions were toothless, and that Obamacare made the revolving door spin faster. The Senate Finance Committee is scheduled to consider Schultz's nomination Thursday.

Schultz, whose wife is Washington Post investigative reporter Sari Horwitz, spent 13 years as an attorney for Ralph Nader's crusading "consumer advocacy" group Public Citizen. In 1989, Schultz went to Capitol Hill as counsel for the health and environment subcommittee of the House Energy and Commerce Committee. He then spent seven years in the Clinton administration, mostly as deputy commissioner of the Food and Drug Administration.

At the end of Clinton's term, Schultz cashed out, becoming a lobbyist at the K Street firm Zuckerman Spaeder. National Journal reported at the time, "As a partner at the Washington-based national law firm, Schultz expects to capitalize on his work for nonprofits, as well as his experience in food and drug law."

He did. Over eight years, Schultz lobbied on behalf of seven different drug companies, plus the American Hospital Association, according to lobbying disclosure filings. The firm brought in $2.98 million from Schultz's lobbying, according to the filings.

Nearly half of that money -- $1.46 million -- came from Schultz's biggest client, Barr Laboratories, maker of the morning-after contraception pill known as Plan B. HHS Secretary Kathleen Sebelius in 2011 issued a rule requiring nearly all employer-based health plans to cover 100 percent of the cost of Plan B along with other contraceptives.

A handful of lawsuits have challenged this mandate. As general counsel for HHS, Schultz would presumably be the point man on defending the mandate. Has he been recusing himself? Schultz's office dodged my question on the subject.

Plenty of other litigation facing Schultz directly affects his former clients. Oklahoma, for instance, is challenging HHS's authority to subsidize federally established insurance exchanges. The drug companies and hospitals Schultz represented take the administration's side, lobbying for more federal subsidies of health insurance.

Appointing a drug and hospital lobbyist as the top lawyer at HHS clashes with Obama's rhetoric about battling the special interests and keeping lobbyists out of the administration. But Schultz is apparently not covered by Obama's anti-lobbyist rules.

Obama's "lobbyist ban" applies only to lobbyists who have registered as such within two years of their appointment. Zuckerman Spaeder terminated all its lobbying filings on Sept. 30, 2008. Schultz's personal financial disclosures show that he kept at least some lobbying clients -- including drug companies -- as legal clients.

Two weeks after deregistering as a lobbyist in 2008, Schultz contributed the maximum $2,300 to Obama's campaign, thus not running afoul of the Obama campaign's trumpeted rejection of lobbyist contributions. Obama appointed Schultz as HHS deputy general counsel two and a half years later, and he now serves as acting general counsel.
"Nominating a drug lobbyist to help implement and defend Obamacare is only fitting."
Obama on his first day issued an executive order barring all appointees -- not merely lobbyists -- from participating in "any particular matter involving specific parties that is directly and substantially related to my former employer or former clients." Nearly every disputed aspect of Obamacare greatly affects Schultz's former drug and hospital clients, but the legal definition of "substantially related to" is pretty narrow.

I called HHS to ask in what specific matters Schultz recused himself. HHS spokesman Tait Sye wrote back with this answer: "Bill Schultz assiduously complies with the stringent standards set by the President's Executive Order on Ethics, including recusal matters. Bill has not been a registered lobbyist since the fall of 2008, which is more than 2 years prior to his appointment at HHS."

Schultz is hardly the first revolving-door lobbyist to work on Obamacare within the Obama administration. To help implement the bill after it passed, HHS hired insurance lobbyist-turned-Senate staffer Liz Fowler as policy director. After Obama's re-election, she cashed out again to take over the lobbying operation of pharmaceutical giant Johnson & Johnson.

Increasing government's role in the economy fuels the revolving door by creating more demand for lobbyists with connections to government. Obamacare was extraordinary in this regard. Nominating a drug lobbyist to help implement and defend Obamacare is only fitting.

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Timothy P.
  • Timothy P. Carney helps direct AEI’s Culture of Competition Project, which examines barriers to competition in all areas of American life, from the economy to the world of ideas. Carney has over a decade of experience as a journalist covering the intersection of politics and economics. His work at AEI focuses on how to reinvigorate a competitive culture in America in which all can reap the benefits of a fair economy.


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  • Email: timothy.carney@aei.org

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