POLITICS

When Dad Was VP, Jeb Bush Lobbied The Administration For A Medicare Fraudster

02/20/2015 11:42 am ET | Updated Feb 20, 2015

WASHINGTON -- Jeb Bush personally lobbied the secretary of health and human services, while his father was vice president, on behalf of a Miami figure who would later flee the country accused of one of the greatest Medicare frauds in the program's history.

Bush pressed then-HHS Secretary Margaret Heckler to give the man's HMO a waiver so that it could accept larger sums of Medicare money than it otherwise would have been allowed, Heckler told The Huffington Post.

Miguel Recarey Jr., head of the health maintenance organization International Medical Centers (IMC) who often boasted of connections to the Miami Cuban mafia, paid Bush $75,000 in the mid-1980s. Bush has acknowledged receiving the payment but said it was tendered for real estate consultation. But the deal he consulted on was never closed.

The New York Times recently reported that the younger Bush made frequent use of his connection to his father both as vice president and president. "Even within a family long steeped in politics, Mr. Bush stood out to White House aides for the frequency of his communications and the intensity of the opinions," the paper reported.

Jeb Bush, now a top GOP contender for president in 2016, has addressed the latest criticism by saying that he is his "own man."

The IMC affair involved hundreds of millions of public dollars. In 1992, as his father, President George H.W. Bush, ran for re-election, Jeb Bush denied having reached out to Heckler on Recarey's behalf. He said that he had only spoken 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 Heckler herself, in a 2012 interview with HuffPost, confirmed that Jeb Bush did indeed lobby her personally -- and that his input played a major role in her thinking. She was in favor of renewing the waiver, she said, although she left office before doing so.

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 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.

'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 had been 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."

Kristy Campbell, a spokeswoman for Bush, says that he does not recall phoning the Cabinet secretary on behalf of Recarey. "As Governor Bush has said time and again, the only call he recollects making was to Mr. Moley. He was not a lobbyist and was not paid to make any calls," she said.

But Moley, the person he acknowledges calling, who is himself a Bush ally, has said that Bush did in fact reach out to the secretary. 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. President George W. Bush named him permanent representative to the United Nations and other international organizations in Geneva in 2001.

Moley was an early supporter of Freedom's Watch, a conservative advocacy organization launched late in George W. Bush's tenure to defend the war effort and elect Republican politicians. (A co-founder of Freedom's Watch, Sheldon Adelson, has since donated multimillions to GOP candidates, who court his favor.)

But like Haddow, Moley testified to Congress that Jeb Bush called the HHS 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 in 2012 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 had 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" was an understatement. A Medicare fraud investigator, Leon Weinstein, blew the whistle on Recarey in 1986, sparking congressional interest from then-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. 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 in 2012. "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. His ties to Miami Cuban organized crime go back at least as far as the 1960s, Freedberg reported. He failed to file income tax returns 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 tens of thousands of dollars 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.

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, as reported at the time by the Sun Sentinel:

A fugitive accused of swindling millions from Medicare said he paid Jeb Bush $75,000 to buy influence in Washington while he tried to save his Florida health care company.

Miguel Recarey told ABC's 20-20 that Bush's father was vice president when the younger Bush called then-Health and Human Services Secretary Margaret Heckler on Recarey's behalf.

Asked whether he was paying for Bush's influence, Recarey responded, "Sure. Obviously not enough."

The Sun Sentinel story ran the day the "20/20" segment was scheduled to air, but something happened on the way to broadcast. Recarey, a fugitive at the time, saw the reports in the press and said that his comments had been taken out of context. 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."

This story was originally published in January 2012. It was updated and reposted Friday, inspired by an experiment conducted last month by Vox.com.

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