June 03, 2020

Warren, Schatz Release GAO Report Detailing the "Mar-a-Lago Crowd" of Trump Cronies' Undue Influence Over Dept. of Veterans Affairs

Members of Trump's Private Club With No Military or Government Experience Got Special Access to Key Decisionmakers, Meddled in Important VA Actions; Investigation Was Initially Requested by Sens. Warren and Schatz in August 2018

GAO Report (PDF)

Washington, D.C. - United States Senators Elizabeth Warren (D-Mass.) and Brian Schatz (D-Hawaii) today released the results of a Government Accountability Office (GAO) investigation revealing the undue influence of unqualified, unaccountable private citizens-with no official government role or responsibilities-over Department of Veterans Affairs (VA) decisions. The investigation was initially requested by the senators in August 2018 followingreports that a trio of President Trump's Mar-a-Lago cronies-Mr. Ike Perlmutter, Dr. Bruce Moskowitz, and Mr. Marc Sherman-"are secretly shaping the Trump administration's veterans policies."

"This independent government watchdog's report finds that Trump Administration corruption ran rampant at the VA, revealing that three unqualified, unaccountable cronies used their personal relationship with the President and membership at his country club as leverage to exert personal influence over health care, technology, personnel, and other key decisions at the Department of Veterans Affairs," said Senator Warren. "The VA must make decisions based only on the best interests of veterans - not on the whims of private individuals with special access to the President. This is another example of why Congress needs to act on behalf of the American people and wipe out corruption and cronyism. I thank GAO for its thorough investigation of this matter."

"VA should be led by those who understand veterans' concerns and have their best interests at heart," said Senator Schatz, top Democratic on the Senate Appropriations Subcommittee on Military Construction and Veterans Affairs. "This new report confirms that three of Trump's friends, who have no experience in government let alone with veterans matters, were secretly shaping the VA's policies without any transparency or oversight. Being a member of the president's club does not qualify you to influence decisions that affect the millions who served in uniform."

The GAO's report confirmed the following, based on a review that identified hundreds of phone calls and emails between Perlmutter, Moskowitz, or Sherman and key VA officials:

  • The trio often "acted as advisors by making recommendations" on a number of key VA initiatives, and "created a 'shadow reporting structure' in which they were stakeholders without a formal role, creating confusion for some VA staff who recognized the power and influence of the three private citizens but were not given clear guidance on how to handle that power or make decisions under that influence."
  • Then-VA Secretary David Shulkin "had to 'bring along' the three private citizens and get their buy-in on certain decisions... due, in part, to their direct access to the White House."
  • Input from the trio may have contributed to the "strategic pause" that VA took on the electronic health record system contract negotiation with Cerner, a company that provides health care IT services.
  • VA officials and Mr. Moskowitz exchanged emails about developing a mobile app for a year in which Mr. Moskowitz took a leadership role to organize meetings and make introductions.
  • Moskowitz "participated in weekly meetings to plan a medical device registry summit hosted by VA. Moskowitz also invited his son, Aaron Moskowitz, to join in planning the summit, and they both worked to connect VA to other private citizens to participate in the summit."
  • Mr. Perlmutter, Chairman of Marvel Entertainment, helped arrange then-Secretary Shulkin's November 2017 appearance at the New York Stock Exchange, and "arranged for Marvel characters" to be present at the ringing and for a public service announcement that his company worked with Johnson & Johnson and VA on this effort.
  • The trio meddled in key personnel decisions, "suggest(ing) potential candidates for the CIO and Under Secretary for Health positions and that VA attempted to hire one of these potential candidates for the CIO position."

On August 10, 2018, Senators Warren and Brian Schatz sent a letter to the GAO in the wake of a ProPublica investigation revealing numerous examples of potential ethics abuses and misuse of government resources for private gain. Mr. Perlmutter, the Chairman of Marvel Entertainment, used then-VA Secretary Shulkin to promote his own company.  Dr. Moskowitz reportedly pushed his idea for Apple and the VA to develop an application to help veterans locate medical services, but simultaneously recommended his son - who happened to develop a similar app - to serve as a technical advisor on the proposed project.

In 2018, Senator Warren introduced the Anti-Corruption and Public Integrity Act-the most sweeping set of anti-corruption proposals since Watergate. Representatives Pramila Jayapal (D-Wash.) and John Sarbanes (D-Md.) introduced the companion legislation in the House. The legislation would require outside, unpaid advisors to the White House-like Messrs. Perlmutter, Moskowitz, and Sherman-to follow the same ethics rules as government employees and apply those rules to all government employees.  

###