INDIANAPOLIS (AP) -
President Donald Trump’s pick to oversee Medicare and Medicaid advised Vice
President Mike Pence on health care issues while he was Indiana’s governor,
a post she maintained amid a web of business arrangements - including one
that ethics experts say conflicted with her public duties.
A review by The
Associated Press found Seema Verma and her small Indianapolis-based firm
made millions through consulting agreements with at least nine states while
also working under contract for Hewlett Packard. The company holds a
financial stake in the health care policies Verma’s consulting work helped
shape in Indiana and elsewhere.
Since 2011, her
firm, SVC Inc., collected more than $6.6 million in consulting fees from the
state of Indiana, records show. At the same time, records indicate she also
received more than $1 million through a contract with Hewlett, the nation’s
largest operator of state Medicaid claims processing systems.
Last year, her firm
collected an additional $316,000 for work done for the state of Kentucky as
a subcontractor for HP Enterprises, according to documents obtained by AP
through public records requests.
A spokesman said
Verma’s work for Indiana predates Pence by over a decade and includes
service under both Democratic and Republican governors. Her firm was
“completely transparent in regards to its relationship with HP and ... there
was never a conflict of interest,” spokesman Marcus Barlow said in a
disclosures released this week, Verma reported she has an agreement to sell
SVC Inc. to Health Management Associates of Lansing, Michigan, within 90
days of her confirmation.
A Pence spokesman
did not respond to a request for comment.
Verma faces a
Senate Finance Committee hearing on Thursday. Democrats in Washington are
aware of many of her consulting arrangements, and have broader concerns
about her philosophy about government entitlement programs, lack of
background in Medicare and inexperience leading a large organization.
As a trusted
adviser to Pence, she had an office in Indiana’s government center and took
on duties usually reserved for state administrators. Verma was also widely
respected for her grasp on policy and designed a federal Medicaid waiver
that allowed Pence to undertake his own conservative expansion of the
program while still accepting money made available through the Affordable
However, legal and
ethics experts contacted by AP say Verma’s work for Hewlett, and offshoot HP
Enterprises, raised questions about where her loyalties lay - to the
company, or to state taxpayers.
former President George W. Bush’s chief ethics lawyer, called Verma’s
arrangement a “conflict of interest” that “clearly should not happen and is
are typically prohibited for rank-and-file state employees under Indiana’s
ethics rules and laws, but they’re murkier when it comes to consulting work.
Contractors have often replaced state employees in a GOP bid to drive down
the number of public employees and distinctions between the two can be hard
“She was cloaked
with so much responsibility and so much authority, people thought she was a
state employee,” said Debra Minot, a former head of Indiana’s Family and
Social Services Agency under Pence who worked with Verma.
law professor David Orentlicher compared Verma’s dual employment to an
attorney who represents both the plaintiff and the defense in a lawsuit.
It’s also similar to federal contract negotiator with a side job for a
company they regularly negotiate with, he said.
“If you have one
person on both sides of the negotiating, they can’t negotiate hard for both
sides,” said Orentlicher, a former Indiana Democratic state lawmaker.
Verma did not
specifically address how she would handle decisions related to HP in a
letter to the Department of Health and Human Services that was released this
week. The letter outlined her plan for managing potential conflicts of
interest should she be confirmed by the Senate to lead the Centers for
Medicare & Medicaid Services.
spokesman, clarified Wednesday that she will recuse herself from decisions
related to HP, as required by the Trump administration’s ethics pledge.
contract documents show Verma’s duties to the state and Hewlett have
overlapped at times. One agreement she held with the state’s social services
agency required her to “provide technical assistance” to state contractors,
as well as the governor’s office. Another duty was “contract development and
negotiation” with vendors, which included HP and HP Enterprises.
with HP was first reported by the Indianapolis Star in 2014.
There was at least
one instance where Verma crossed the line in Indiana when she was dispatched
by HP to help smooth over a billing dispute, said Minot.
“It was never clear
to me until that moment that she, in essence, was representing both the
agency and one of our very key contractors,” said Minot, who was removed as
head of the agency by Pence over her disagreements with Verma. “It was just
shocking to me that she could play both sides."