Roll Call article on Frist and his "controversial" family-owned company omitted firm's history of fraud

››› ››› ROB MORLINO

An October 27 Roll Call article (subscription required) reported that Senate Majority Leader Bill Frist (R-TN) is not distancing himself from the "controversial" company founded by his father, HCA Inc., despite ongoing Securities and Exchange Commission and Justice Department investigations into the senator's sale of company stock last June, but the article failed to mention that the company had paid a record $1.7 billion to the federal government as settlement of charges for defrauding Medicaid and Medicare.

Senior staff writer Paul Kane's article noted that Frist "continues to embrace HCA Inc. as a symbol of the 'American dream' " during speeches in South Carolina and Iowa last week "as he tests the presidential waters for 2008" -- but did not note that the company paid a massive penalty for defrauding taxpayers. Kane later made reference to "a federal investigation into its billing practices" without detailing the charges or the outcome.

A Justice Department investigation into HCA's business practices concluded in 2003 and resulted in $1.7 billion worth of settlements related to 14 counts of Medicare and Medicaid fraud. While the largest such settlement in U.S. history, it was nonetheless greeted with skepticism by Sen. Charles Grassley (R-IA), who was then the incoming chairman of the Senate Finance Committee and who sent a letter to then-Attorney General John Ashcroft and then-Secretary of Health and Human Services Tommy Thompson demanding that the details of the HCA settlement be made available to congressional scrutiny. A press release Grassley's office sent out with the letter summarized Grassley's concerns:

The most important question is unanswered. ... That's whether the taxpayers will get their money back from any fraud perpetrated by HCA. I haven't seen the statistical evidence to show this settlement will fairly compensate the taxpayers for their losses. Until I see the math, I'll remain skeptical. I look forward to learning more about the government's case, although I'm getting tired of asking.

HCA is the nation's largest private hospital operator. Media Matters for America previously noted that a majority of newspaper articles about the investigation into the stock sale have omitted reference to the record settlement.

From the October 27 Roll Call article:

Far from running away from the controversial business that made his family fortune, Senate Majority Leader Bill Frist (R-Tenn.) continues to embrace HCA Inc. as a symbol of the "American dream" in his political stump speeches as he tests the presidential waters for 2008.

[...]

In the meantime, Frist said Wednesday he has no plans to hide from his family's company.

"It's the American dream," the Senator said of HCA.

Asked about his decision to employ HCA as a political device in speeches at a time when his ties to the company are under investigation, Frist said the anecdote might now be drawing more scrutiny because of the federal probes into his trades. "People are paying more attention to it," he said.

But he was adamant that he would never drop the "American dream" story of HCA from his stump speeches. "Me? No, no, no," he said.

In that regard, his political future will be even more interwoven with HCA than ever before -- a slight irony, given Frist's decisions early in life to essentially shun his father's company for a career as a surgeon while his brother, Thomas Frist Jr., took over the company. Frist Jr., who left the company in the mid-1990s and later reclaimed power after a federal investigation into its billing practices, is currently CEO emeritus of HCA.

Posted In
Government, Ethics
Stories/Interests
Bill Frist Scandal
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