From Thursday's New York Times, via the Seattle Post-Intelligencer, "GAO says Medicare video violated law":

The General Accounting Office, an investigative arm of Congress, said yesterday that the Bush administration had violated federal law by producing and disseminating television news segments that portray the new Medicare law as a boon to the elderly.

The agency said the videos were a form of "covert propaganda" because the government was not identified as the source of the materials, broadcast by at least 40 television stations in 33 markets. The agency also expressed some concern about the content of the videos, but based its ruling on the lack of disclosure.

The consequences of the ruling were not clear. The GAO does not have law enforcement powers, but its decisions on federal spending are usually considered authoritative and are taken seriously by officials in the executive branch of the government.

The decision fuels a political debate over the new Medicare law. President Bush and many Republicans in Congress say the law will provide immense assistance to millions of elderly and disabled people. But Democrats say the law will do little for the elderly and is so flawed that the government had to resort to an illegal public relations campaign to sell it to the public.

The GAO said that a specific part of the videos, a made-for-television "story package," violated the prohibition on using taxpayer money for propaganda. People seeing the videos as part of a newscast would "believe that the information came from a non-government source or neutral party," it said.

William Pierce, a spokesman for the Department of Health and Human Services, who helped develop the videos, said: "We disagree. It's not covert. TV stations knew the videos came from us and could have identified the government as the source if they had wanted to."

The GAO said, however, that the intended audience, it said, was not television news directors, but viewers, and "the video news releases did not alert viewers that the Centers for Medicare and Medicaid Services was the source."

Two videos end with the voice of a woman who says, "In Washington, I'm Karen Ryan reporting." A third video is narrated, in Spanish, by a man who identifies himself as "Alberto Garcia, reporting" from Washington.

The accounting office said the videos were "not strictly factual news stories" and were flawed by "notable omissions and weaknesses" in their explanation of the Medicare law. But the main problem, it said, is that they were "misleading as to source."

Federal law prohibits the use of federal money for "publicity or propaganda purposes" not authorized by Congress.

The accounting office said the Bush administration's misuse of federal money "also constitutes a violation of the Anti-deficiency Act," which prohibits spending in excess of available appropriations. Officials run serious legal risks if they spend federal money for purposes not authorized by Congress. But Medicare officials are unlikely to face any penalties.

Sen. Frank Lautenberg, D-N.J., said he was drafting legislation that would require the Bush-Cheney campaign to reimburse the Medicare trust fund for the cost of producing and disseminating the videos.

The administration put the cost at $42,750, but refused to provide any documentation, so the amount could not be confirmed, the GAO said.