Tuesday, July 29, 2008

ManorCare: Carlyle's Christmas Gift Exchange

After The Carlyle Group failed 24 long term acute care patients in their New Orleans LifeCare affiliate, I thought some regulator or elected official would explore this blot as Carlyle pursued giant nursing home provider, ManorCare. Surely, some heroic leader would ask how the huge private equity firm planned to keep patients safe, should a future disaster occur. It didn't happen. Why not?

The Carlyle Group greased the skids with political donations and lobbyist guns. They hired Dutko Worldwide to market the HCR ManorCare deal. In one month they spent $60,000 to push the acquisition. As lobbyists, Carter Esham, Laine Gussom and Judy Lemons provided therapy to the challenged purchase.

Yes, that seems like small change given Carlyle's expenditure of $280,000 on Ogilvy Government Relations' Federalist Group, intended to influence Defense Department subcontracting and prevent repatriation of the capital gains tax (or changes to their preferred "carried interest" taxation.) But there's more. ManorCare spent $94,500 on lobbying activities in 2007. Did they put in a good word for the proposed sale while they met with Congressional leaders on Medicare, tort reform, and pay for performance?

HCR ManorCare provided some straight up juice in the form of $52,500 in campaign contributions to key members of the House Ways & Means Committee.

Charles B. Rangel, D-NY Chairman $10,000
John Lewis, D-GA $5,000
Xavier Becerra, D-CA $2,000
Earl Pomeroy, D-ND $1,500
Stephanie Tubbs Jones, D-OH $9,000
Mike Thompson, D-CA $1,000
John B. Larson, D-CT $1,000
Ron Kind, D-WI $2,000
Chris Van Hollen, D-MD $10,000
Kendrick B. Meek, D-FL $2,500
Allyson Y. Schwartz, D-PA $2,000

Dave Camp, R-MI $3,500
Paul Ryan, R-WI $1,500
Jon Porter, R-NV $2,500

The company donated to House leaders in both parties:

Steny Hoyer (D-MD) $2,500
Roy Blount (R-MO) $2,000

The present showcase has $60,000 in Carlyle lobbying, almost the same amount in campaign donations to one House Committee from ManorCare, and some $95,000 in company lobbying. That's over $200,000 washing around, apparently enough to remove the stain of 24 patient deaths in a Carlyle owned health care affiliate.

The White House performed similar work by omitting any mention of LifeCare, Memorial Hospital, or their corporate owners in their Lessons Learned report on Hurricane Katrina. It appears Congress is capable of the same. Report author, Frances Townsend, didn't need to be afraid of a subpoena after all!

But how did the story end? Carlyle got their Christmas present, Santa Bush got his milk and cookies and all were happy. Don't you love a good ending?