David Axelrod's ties targeted in health fight

By KENNETH P. VOGEL | 8/19/09 4:45 AM EDT

Critics of President Obama’s health-care overhaul are zeroing in on his senior adviser David Axelrod, whose former partners at a Chicago-based firm are the beneficiaries of huge ad buys—now at $24 million and counting—by White House allies in the reform fight.


The unwelcome scrutiny, largely from Republicans, comes at an inopportune time as Obama seeks to shore up support for health care reform.

It revolves around two separate $12 million ad campaigns advocating Obama’s health care plan that were produced and placed partly by AKPD Message and Media, a firm founded by Axelrod that employs his son and still owes Axelrod $2 million.


A separate firm, GMMB, is also handling the campaigns. Both AKPD and GMMB did millions of dollars of work on Obama’s presidential campaign, continue to tout their connections to the campaign and still maintain close ties to his inner circle.


The two firms were hired to make the health-care ads by a pair of linked coalitions supporting Obama’s health-care overhaul proposal—Healthy Economy Now and a newer offshoot unveiled last week called Americans for Stable Quality Care.


The Associated Press reported this month that Healthy Economy Now paid AKPD and GMMB to produce a $12 million national ad campaign echoing White House talking points supporting the health care overhaul.


And a spokesman for Americans for Stable Quality Care, which essentially supplanted the now-defunct Healthy Economy Now, confirmed that it is using the two Obama-linked firms to produce and air a separate $12 million ad campaign launched Thursday designed to shore up support among the conservative House Blue Dog Democrats and to target swing senators. The ad, which is airing in a dozen states, is the opening salvo in a campaign planned for this fall that will cost tens of millions of dollars more.


The coalitions are a strange-bedfellows mix of business, labor and health care groups including the Pharmaceutical Research and Manufacturers of America (better known as PhRMA), the American Medical Association, the Service Employees International Union and the liberal group FamiliesUSA.


Neither coalition would reveal how much AKPD or GMMB was paid for its work on the ads. The firms will likely net only a fraction of the $24 million total campaign price tag, but—unlike with election campaign spending—there are no mandatory reporting requirements for such so-called issue advocacy.


Some of the Healthy Economy Now ads began airing in June, around the time PhRMA was negotiating with the Senate Finance Committee on an eventual agreement to win the drug lobby’s support for a health care overhaul by capping the costs the drug industry would absorb to $80 billion over 10 years.


The deal, which was blessed by the White House, has angered some progressive activists and liberal House Democrats, who until recently counted Big Pharma as both an impediment to health care reform efforts and a Republican-aligned lobby.

Republicans are aggressively seeking to capitalize on the AKPD connection, and the House Republican Conference distributed a one-page talking points memo Tuesday asserting the White House-PhRMA deal raises [u][b]“serious questions as to whether the drug lobby is helping to bankroll a multimillion dollar severance package for one of the President’s senior advisers.â€