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A Project of The Annenberg Public Policy Center

Liberal Union Joins Attack on Romney in Florida

Newt Gingrich is getting help from a surprising ally: the American Federation of State, County, and Municipal Employees. The liberal-leaning labor group is running a TV ad in Florida slamming Mitt Romney for profiting personally from a company later convicted of Medicare fraud while he was a director. The ad began airing just before a new poll showed Gingrich in a dead heat with Romney to win the Jan. 31 Republican primary.

The ad, called “Greed,” says that “while Romney was a director at the Damon Corporation, the company was defrauding Medicare of millions,” and that “the company was fined $100 million, but Romney, himself, made a fortune.”

Some viewers could be misled by this ad. Fraud did occur while Romney was a member of the board of the Damon Corp., which pleaded guilty in 1996 to defrauding Medicare of $25 million between 1988 and 1993. But Romney was never accused of fraud personally.

Nevertheless, the company paid a then-record $119 million fine for billing the federal health insurance program for unnecessary blood tests, according to a 2002 Boston Globe report. Romney, who was on Damon’s board from 1990 to 1993, personally collected $473,000 when Bain Capital, which Romney once headed, sold the Damon Corp. to Corning Inc. in 1993.

The ad closes by morphing an image of Romney into one of Republican Florida Gov. Rick Scott, and asks: “Corporate greed. Medicare fraud. Sound familiar?” And indeed, that scenario does sound familiar.

As we previously reported, Scott’s former hospital company, Columbia/HCA, paid $1.7 billion in fines for Medicare fraud for practices that took place while he was its chief executive officer. And when Scott left the company in 1997, he received $300 million in stocks and options.

Scott, like Romney, wasn’t personally charged with any wrongdoing. As the Globe reported in 2002, “the federal investigation never implicated Romney – who left the board in August 1993 after the company was bought by Corning.” And Scott issued a statement to the Miami Herald in 2010, saying: “An army of federal investigators spent seven years examining every aspect of this case. If they found any merit in these allegations … they would have certainly charged me, or at the very least questioned me — neither of which ever happened.”

A recent Washington Post article noted that the ad is an “unusually direct intervention by one side into the other party’s primary race.” And one of the labor group’s political strategists told the paper that it saw an opportunity to go after Romney, whom it still sees as the likely GOP nominee:

Washington Post, Jan. 25: “The target of opportunity presented itself, and we decided to take advantage of it,” said Seth Johnson, assistant director in ­AFSCME’s political action department. “Before South Carolina and after South Carolina, Mitt Romney is still the front-runner. We thought it was a good time to educate Florida voters about his record.”

AFSCME is paying $1 million to run the ad in Tampa, Orlando and West Palm Beach.

— D’Angelo Gore