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Jeb Bush Lobbied On Behalf Of Infamous Medicare Swindler, Says Former HHS Secretary

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WASHINGTON -- Jeb Bush personally lobbied the secretary of health and human services while his father was vice president on behalf of a hospital executive who would later be accused of defrauding the government of hundreds of millions of Medicare dollars, The Huffington Post has confirmed.

Miguel Recarey, head of International Medical Centers (IMC), also paid Bush $75,000 in the mid-1980s, money that Bush acknowledges receiving but says was tendered for real estate consultation.

With the GOP presidential campaign now focused on Tuesday's Florida primary, attention has turned to Jeb Bush, the popular former Florida governor, as observers analyze his every move for signs of a possible endorsement -- or wonder whether Bush himself will wind up the nominee after a brokered political convention.

In 1992, as his father, President George H.W. Bush, ran for reelection, Jeb Bush denied having reached out to HHS Secretary Margaret Heckler on Recarey's behalf, a denial he maintains through a spokeswoman to this day. Bush said that he only spoke to a lower-level HHS official to ask that Recarey be given a "fair hearing" with regard to his application to renew a waiver that allowed IMC to receive more than 50 percent of its revenue from Medicare. (The waiver had been granted as part of an HMO pilot project that was set to expire. The renewal was ultimately not granted.)

But now former Secretary Heckler herself, in an interview with HuffPost, has confirmed that Jeb Bush lobbied her, that she was in favor of renewing the waiver (although she left office before doing so) and that his input played a major role in her thinking.

She said she took his call, and took it seriously. "Jeb was one that I and friends of the Bushes always thought would be president," Heckler said.

"He knew the people well," said Heckler, referring to the South Florida Cuban community. "He was involved, and I know that his compassion and my sense of conscience and his, I thought, matched, and therefore I was positive, acting upon this."

Heckler's statement backs up congressional testimony offered by two other HHS officials in 1987. If all three are to be believed, Bush has been lying for some 20 years. He did, in fact, directly lobby the secretary for the IMC waiver.

The same year that the HHS officials testified, Recarey, who regularly bragged of his connections to the Miami Cuban mafia, was indicted for defrauding Medicare, among other charges. He fled the country, first to Venezuela, then to Spain, where he fended off an extradition effort. It is alleged that he and IMC stole hundreds of millions of dollars overall. The IMC Medicare fraud is one of the largest in the program's history.

[HuffPost came across the Jeb Bush story while researching the Nicaraguan Contras' involvement with the Miami drug trade. Recarey's hospital, according to a diary kept by Reagan White House official Oliver North, regularly treated wounded Contras flown in from the battlefield. HuffPost readers: If you have any credible information regarding drug importation in the 1980s, write me at ryan@huffingtonpost.com.]

'A CLOSE PERSONAL RELATIONSHIP'

Heckler's chief of staff, C. McClain Haddow, told a House Government Operations subcommittee in December 1987 that he was aware of Jeb Bush's call to the secretary. "Ms. Heckler's description of it and the reason why she thought it was important I thought were blatantly political," he said. "She was just very interested in maintaining a close personal relationship with Mr. Bush, because she perceived there was a political future for her in doing so." Heckler was named ambassador to Ireland in 1985.

Jeb Bush's version of events is different. As he told the Miami Herald in 1992, he could "recall making one phone call on behalf of IMC to an HHS official named Kevin Moley in the spring or summer of 1985. I asked that IMC be given a fair hearing, which IMC was given. No waiver was granted based on my phone call to Mr. Moley, and the accusation that millions of dollars were lost because of that call is unfair and untrue."

Jaryn Emhof, a spokeswoman for Bush, said he stands by what he told the Herald. "This issue has been reported numerous times over the last 25 years. Governor Bush's answer has been consistent," she said.

Moley would be named assistant HHS secretary by President George H.W. Bush in 1989 and promoted to deputy secretary in 1992. He was an early donor to the presidential campaign of Jeb's brother George W. Bush, and he gave $20,000 to the Republican National Committee in 2000 and another $25,000 in 2004, according to Federal Election Commission records. George W. Bush named him permanent representative to the United Nations and other international organizations in Geneva in 2001.

In between political jobs, Moley served on the boards of and as an executive for a host of private health care companies. He was an early supporter of Freedom's Watch, a conservative advocacy organization launched late in George W. Bush's term to defend the war effort and elect Republican politicians. (A co-founder of Freedom's Watch, Sheldon Adelson, is now chief financial backer of Newt Gingrich's presidential campaign.)

But like Haddow, Moley, who to this day is a strong Bush family backer, testified to Congress that Jeb Bush called the secretary. "It came to my attention that Mr. Bush had contacted an official of the Department" -- his later testimony would make clear the official was Heckler -- "to make an inquiry or to speak to the fact that Mr. Recarey was being hassled or whatever by federal officials on the 50-50," explained Moley. "Jeb Bush is a person who I have known for some time. I called Jeb Bush when I heard this, and I said, 'Jeb, this is something, you know, you probably don't want to be involved in.'"

Bush made more than one call, according to testimony from Haddow. "Mr. Bush, in fact, called me at Ms. Heckler's request at one point about this issue," Haddow said.

SOUTH FLORIDA BUSINESS

Recarey's problem was that health maintenance organizations like his were barred from receiving more than half of their revenue from Medicare reimbursement and his HMO's waiver from the requirement was set to expire.

Moley told HuffPost that Bush was just one of many power brokers who weighed in on Recarey's case. "This guy bought up as much influence in the state of Florida as he could, Jeb being quite frankly the least of it," Moley said, noting that a Republican senator and a Democratic congressman were among the many influential people to bend his ear for IMC.

Back in 1987, Moley testified that Bush argued the 50 percent limit was arbitrary. "He said, 'Kevin, I only want to make sure that Mike Recarey gets a fair hearing. He is down here in south Florida, and he, Mr. Recarey, indicates that he is being hassled on this arbitrary, bureaucratic 50-50 thing,'" Moley recalled. "I said, 'Jeb, to be clear, that it is my office that is handling this.' And Jeb chuckled, and that was the last conversation or any conversation that Mr. Bush, Mr. Jeb Bush, had in regard to IMC until we met socially some year or so later, and he casually brought up, 'Gee, how is IMC doing?' And I said, 'Not so well,' and he said that things had later come to his attention that indicated that he could understand that."

"Not so well" is an understatement. A Medicare fraud investigator, Leon Weinstein, blew the whistle on Recarey in 1986, sparking congressional interest from Reps. Barney Frank (D-Mass.) and Pete Stark (D-Calif.). When Recarey fled, he left behind at least $230 million in unpaid medical claims, Pulitzer Prize-winning reporter Sydney Freedberg reported in the Wall Street Journal in a 1988 profile of the Medicare kingpin. He was taken into custody in Spain in 1993, but released a year later when the Spanish government rejected the U.S. extradition request, according to a December 1994 report by what is now the Government Accountability Office.

"Recarey stole a bunch of money from Medicare, and I spent a lot of time, along with the GAO, the FBI and other federal agencies trying to bring him to justice," Stark told HuffPost. "It sure would have been nice if it all could have been prevented in the first place, but it's clear he had friends in high places."

The IMC allegations were not Recarey's first brush with the law. Recarey's ties to Miami Cuban organized crime go back at least as far as the 1960s, Freedberg. He failed to file income taxes in 1969 and 1970, even though he called himself an accountant. He spent a short time in prison for the tax evasion and, Freedberg reported, was ordered to be deported in 1964, an order that was clearly not successful.

So what was Jeb Bush paid $75,000 to do for Recarey? "As it relates to my real estate work, my company received $75,000 in 1986 from IMC for extensive work that was documented and reported in a previous Miami Herald article but not mentioned in the April 26 story," Bush told the Herald in 1992, although there is no evidence he closed the deal.

Bush's Recarey connection flared up again briefly in 1995, when ABC's "20/20" announced that it had interviewed the fugitive in Spain and that he had said the purpose of the payment was to buy influence. Jeb Bush challenged ABC, and Recarey retracted his quote. ABC issued an apology to Bush and never ran the episode.

The network may have backed down too quickly. When he lobbied for Recarey, Jeb Bush wasn't reaching out to just any Cabinet secretary: Heckler was a longtime family friend.

"My background with the Bushes is that I happen to be a big fan of Jeb Bush and of the Bush family," Heckler told HuffPost. She said that when she was elected to Congress in 1966, she was the only woman among a freshmen class of 47. Rep. George H.W. Bush of Texas was elected class president.

"Since I was the only woman, he and I joined up for quite a few things," she recalled. "The first press conference we had was on performing the ethical code of Congress for the House of Representatives. And that's pretty much the way I look upon the whole Bush family and Bush himself."

"George and Barbara," Heckler said, are "two of the finest people ever to be in the White House."

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