Last week I wrote about Damon Corp. and Mitt Romney’s ties to a company that had committed one of the largest Medicare fines in Massachusetts history ($119 million) and how Rick Tyler of Newt Gingrich’s Super Pac was seeking to make it a part of the debate in Medicare-dependent Florida. The full video is here:
Today, the Democratic National Committee has released a memo criticizing Mitt Romney and his involvement, which it sent to Politico. The DNC has deliberately connected the dots to Governor Rick Scott, the unpopular Republican governor who was once called the “Madoff of Medicare” after he was forced to resign as CEO of a company involved in what became the largest Medicare fraud to date.
A newly released book, The Real Romney, written by Michael Kranish and Scott Helman, provides more details on how Mitt Romney dealt with the problem and how Democrats made an issue of it in 2002. (Romney’s opponent in the gubernatorial race accused him of lax oversight at Damon Corp.)
Four company executives would be charged with conspiring to defraud Medicare; one received a three-month jail sentence. Prosecutors said a former Damon employee had blown the whistle on the billing practices. And the government
…although some of the fraud occurred during Romney’s time on Damon’s board, he and other board members were never implicated in the case. The Damon case raised a recurring question about corporate governance: how much responsibility does a board member have for what happens at a company he helps oversee? In his comments about Damon, Romney seemed at times to hold two views of the matter, both of them to his benefit. On the one hand, he said he hadn’t know what was going on at Damon; on the other, he said he’d helped to put a stop to practices later found to be fraudulent. One thing that looked good at Damon was the bottom line for Bain. (154-155).
It bears repeating that there is still an ethical question about how much a board member ought to be held accountable for actions undertaken by management, though it seems if Mitt Romney is claiming credit for creating jobs as a board member he ought to also get opprobrium when things go awry at firms on whose board he sits. And unlike the previous Bain attack, which I debunked here, the Medicare fraud at Damon Corp. actually happened.
Hopefully the Romney campaign will have a better response to this questionable practice than it did to the tax releases. Indeed, if Romney were smart, he would use the opportunity to highlight some of the necessary reforms for Medicare and Social Security.