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A Project of The Annenberg Public Policy Center

Outside Groups Twist Truth in Nevada Senate Race

Dueling attack ads from outside groups in the Nevada Senate race rely on twisted facts. An ad from the conservative American Crossroads attacks Democratic Rep. Shelley Berkley for an ethics probe related to her efforts on behalf of a kidney program and kidney doctors, including her husband. And an ad from the left-leaning Patriot Majority distorts Republican Sen. Dean Heller’s record on taxes and Medicare.

  • The American Crossroads ad falsely claims Berkley has been “charged.” The House Committee on Ethics has not yet determined whether to launch a full investigation.
  • It claims Berkley “twisted arms to get federal dollars to her husband’s business.” In fact, her husband was among many who benefited, and her efforts were supported by the entire Nevada congressional delegation — including her current GOP opponent.
  • It claims Berkley “won’t answer questions” about the issue. Not true. She has publicly addressed the issue many times since it was first raised in a news story.
  • The ad says a newspaper called Berkley’s actions a “blatant conflict of interest.” But that blatantly misquotes the newspaper.
  • An ad from the left-leaning Patriot Majority claims Republican candidate Heller “voted for huge tax breaks for millionaires.” Actually, he voted against raising taxes, not for giving out new tax breaks.
  • The ad also says Heller supports a plan that would “essentially end Medicare,” recycling a false Democratic claim we included in our “Whoppers of 2011.”
  • The ad also says “seniors would see their health costs explode by nearly $6,000” while featuring a couple on Medicare. But their costs would not have increased at all under Rep. Paul Ryan’s original budget plan, and his new one allows traditional Medicare to continue in the future.

Heller was appointed to the Nevada Senate seat in 2011, after Republican Sen. John Ensign resigned amid an ongoing ethics investigation involving his affair with a former political aide. Even before Ensign’s resignation, both Heller and Berkley had already planned to run for the seat, and polls show this is an extremely tight race. With the Democrats currently clinging to a slight majority in the Senate, this race attracts more-than-usual national interest. Hence the efforts from outside groups like American Crossroads and Patriot Majority.

Berkley’s Ethics Probe

The ad from American Crossroads claims that Berkley “makes the system work, for herself,” by straining the facts surrounding a House Committee on Ethics review of Berkley’s efforts on behalf of a hospital’s kidney transplant program that is connected to her husband.

The ad claims Berkley was “charged with using her office to enrich her family” and that “Berkley twisted arms to get federal dollars for her husband’s business, a blatant conflict of interest.”

The issue dates back to 2008 when the kidney transplant program at Las Vegas’ University Medical Center came under scrutiny due to an unusually high failure rate. As a result, federal regulators threatened to pull the plug on Medicare funds to the program, which effectively would have killed it.

Berkley and others  intervened on behalf of the program, lobbying government administrators to spare it. The optics aren’t good. Berkley’s husband is Dr. Larry Lehrner, a kidney doctor who is president of Kidney Specialists of Southern Nevada. Lehrner’s practice runs the kidney program at University Medical Center.

Berkley’s efforts and her husband’s connection to the hospital were highlighted in a Sept. 5, 2011, story in the New York Times. The story noted that while Berkley and other members of Nevada’s congressional delegation said they were fighting to keep a critical health program in the state, “the congresswoman’s efforts also benefited her husband, a physician whose nephrology practice directs medical services at the hospital’s kidney care department — an arrangement that expanded after her intervention and is now reflected in a $738,000-a-year contract with the hospital.”

The story also detailed Berkley’s efforts to expand federal reimbursements for kidney care. Higher rates, of course, would benefit all kidney doctors, including her husband.

New York Times, Sept. 5, 2011: “Ms. Berkley’s actions were among a series over the last five years in which she pushed legislation or twisted the arms of federal regulators to pursue an agenda that is aligned with the business interests of her husband, Dr. Larry Lehrner. In addition to the hospital contract, he operates a dozen dialysis centers in Nevada and has played a central role in an industry campaign to lobby members of Congress — including his wife — on behalf of kidney care providers.”

But Berkley wasn’t the only one trying to save the kidney program at UMC. Berkley’s opponent, Heller, was also leading efforts to convince Medicare not to defund it.

Berkley, Heller and then-Rep. Jon Porter all co-signed an Oct. 24, 2008, letter to Kerry Weems, acting administrator for the Centers for Medicare and Medicaid Services. The letter expressed “strong disagreement” with the CMS decision to revoke Medicare approval for the kidney transplant program at UMC, and asked CMS to reconsider its position.

“We are concerned that this decision does not protect Medicare beneficiaries, and could have strong negative consequences for our constituents,” the letter reads. “Revoking Medicare approval for the UMC kidney transplant program is uncalled for and will jeopardize the health of hundreds of our constituents while placing a severe burden on transplant centers in surrounding states.”

Their efforts worked. In exchange for improvements made to the program, CMS agreed to continue to fund it.

The New York Times story prompted the Nevada Republican Party to file an ethics complaint against Berkley, claiming that she had violated House rules by advocating for kidney issues that helped her husband’s practice. The nonpartisan Office of Congressional Ethics investigated Berkley and after its board determined the matter met its threshold of “substantial reason to believe a violation has occurred” it referred the matter to the House Ethics Committee. In March, the House Ethics Committee — made up of five Republicans and five Democrats — announced it was reviewing the case.

The committee said that it would announce its course of action by July 9. According to the Las Vegas Review-Journal, that course of action “could range from dismissal of the complaint to the convening of a subcommittee to conduct a full investigation.”

Specifically, the House Ethics Committee cautioned that “the mere fact of a referral or an extension, and the mandatory disclosure of such an extension and the name of the subject of the matter, does not itself indicate that any violation has occurred, or reflect any judgment on behalf of the Committee.”

In other words, Berkley has not been “charged” with anything. And it has not yet been determined if a full investigation by the House Ethics Committee is forthcoming. The ad greatly overreaches on that point.

Update, July 10: After this story was posted, the House Committee on Ethics announced on July 9 that after its own “independent investigation” and review of the allegations — and a subsequent referral from OCE — it unanimously voted to establish an investigative subcommittee to determine whether Berkley “violated the Code of Official Conduct or any law, rule, regulation, or other applicable standard of conduct in the performance of her duties or the discharge of her responsibilities, with respect to alleged communications and activities with or on behalf of entities in which Representative Berkley’s husband had a financial interest.” The  joint statement from Republican chairman Jo Bonner of Alabama and top-ranking Democrat Linda Sanchez of California noted that “the mere fact of establishing an investigative subcommittee does not itself indicate that any violation has occurred.”

The ad’s claim that “Berkley is under investigation and she won’t answer questions” is also a stretch. The ad features a clip of Nevada Sun political columnist Jon Ralston saying that Berkley is “stonewalling the New York Times, refusing to talk about this.”

The New York Times noted in its story that Berkley declined an interview request for its article, but she provided a statement: “I won’t stop fighting to give Nevadans access to affordable health care just because my husband is a doctor, just like I won’t stop standing up for veterans because my father served in World War II.”

A week after the Times story was published, Berkley told the Las Vegas Review-Journal she thought “everybody knew” about her husband’s connection to UMC, but that in hindsight, she wishes she would have more fully disclosed that fact.

“I would make sure it was crystal clear, and I would make sure I would work doubly hard to ensure that everybody I was talking to knew the situation,” Berkley said. “I thought they did.”

And she maintains it was “the right thing to do to work together to keep that center open.”

In fact, the Berkley campaign boasted in a TV ad responding to the American Crossroads ad that Berkley “worked with Dean Heller, standing up to Washington bureaucrats who wanted to close Nevada’s only kidney transplant center.”

The ad also included snippets from a Las Vegas Sun editorial that concluded: “Her advocacy wasn’t driven for personal gain, it was aimed at helping Nevadans” and that “the idea that her advocacy on behalf of the good of all Nevadans is some sort of conflict of interest is ridiculous.”

Not all political pundits have been as generous. Steve Sebelius, a political columnist for the Las Vegas Review-Journal, wrote that, “kidney transplants are only one aspect of Lehrner’s UMC contract, which would have continued even if the transplant program was canceled. But the fact remains, Lehrner’s practice was paid about $600,000 annually by UMC, and for that reason alone, Berkley should have abstained from advocating on the issue.”

The ad misquotes the Las Vegas Sun as saying that Berkley’s actions were a “blatant conflict of interest.” But the Sun didn’t accuse her of that at all. Sun columnist Jon Ralston was quoting the argument made by Republicans (along with Berkley’s argument) and taking neither side. Here’s the relevant portion, in proper context:

Jon Ralston, Las Vegas Sun, Sept. 14, 2o11: “Well, my husband is a doctor, my daughter is a doctor. We do health care. My income is dependent on health care. So this is important to me.” — Rep. Shelley Berkley, Feb. 16, House Ways and Means budget hearing

For those who argue Rep. Shelley Berkley should have been more transparent in pushing as a congresswoman for changes that would enrich her family, you can’t ask for more disclosure than that. Case closed.

For those who insist Rep. Shelley Berkley had a blatant conflict of interest in advocating for legislation that directly affected her pocketbook, you can’t ask for a better smoking gun than that. Case closed.

Ralston went on to say Berkley should either have abstained or disclosed more clearly her family’s financial stake in the matter — and he said she seemed to be “in denial” about how her actions appeared to others. The headline on the column was “Berkley discloses conflict, but not smoothly.” So the Sun did say she had a conflict but didn’t call it “blatant.” Attributing that characterization to the Sun is a blatant misquote.

Jimmie and Dexter

An ad from the Democratic-leaning Patriot Majority introduces viewers to Jimmie and Dexter Sale, a Washoe City, Nev., couple who “have a plan: work hard, save what they can and count on the Medicare they earned.”

But, the ad says, Heller has a “different plan.” It says he “voted for a huge tax break for millionaires, and a plan that would essentially end Medicare and replace it with a voucher program. Seniors would see their health costs explode by nearly $6,000 a year.”

Says Jimmie Sale: “Dean Heller’s plan would be a disaster. It’s going to hurt people who need it most.”

There are several holes in this ad’s assertions about Heller. Let’s start with the claim that Heller “voted for a huge tax break for millionaires.” In small print, the ad cites Heller’s April 16 vote against the Paying a Fair Share Act of 2012, popularly known as the Buffett Rule. It gets its moniker from Warren Buffett, who wrote that he pays a lower effective tax rate than his secretary. The legislation would require persons whose adjusted gross income exceeds $1 million to pay a minimum tax rate of 30 percent. In short, it would increase the tax burden on some millionaires, although not as many as the Obama administration would lead you to believe. But opposing a tax increase on the very wealthy is different from voting for a “huge tax break for millionaires,” as the ad claims.

The ad also makes the dubious claim that Heller voted for a plan that would “essentially end Medicare and replace it with a voucher program.” The claim is tied to Heller’s support for Rep. Paul Ryan’s 2011 budget plan to radically change Medicare, essentially having Medicare beneficiaries purchase private insurance with the help of federal subsidies. We featured Democrats’ repeated claims that the plan would “end” or “essentially end” Medicare among our “Whoppers of 2011.”

As we noted then, the plan would have continued the present Medicare system indefinitely for those now getting benefits, and also for all those who reach age 65 during the next decade.

And that’s why it’s misleading to feature the Sales in the Patriot Majority ad. The Sales are in their mid-60s, and so they would not have been affected by the proposed changes to Medicare.

The “essentially end Medicare” iteration is sourced to the Wall Street Journal. But that’s a partial quote that distorts what the newspaper actually said. The Journal reported that Medicare would essentially end “as a program that directly pays those bills.” But bills would still have been paid, indirectly.

And lastly, the claim that “seniors would see their health costs explode by nearly $6,000 a year,” is also based on Ryan’s budget plan from last year.

As we noted in a previous story when the Obama campaign cited this figure, Ryan made his Medicare proposal considerably more generous when he unveiled a new budget plan in March for fiscal year 2013. A key difference is that the new Ryan plan wouldn’t force future seniors to accept subsidized private insurance. The current plan allows beneficiaries to choose “a traditional Medicare fee‐for‐service plan” if they prefer.

Also, the subsidies in Ryan’s new plan would be tied to the second-cheapest plan, and the growth rate of that plan would be capped at gross domestic product plus 0.5 percentage points. That’s a much more generous formula than Ryan’s 2011 plan, which pegged the cap to inflation, which normally rises more slowly.

And if health care costs exceed the cap, the plan requires Congress to take some unspecified actions to reduce Medicare costs.

It’s possible that future Medicare beneficiaries could pay more for the equivalent of today’s traditional Medicare plan. We don’t know. But the cost estimate cited in the ad is based on an outdated plan.

Correction, July 5: An earlier version of this story stated incorrectly that “There is no investigation, just an ethics complaint — by the Republican Party.” We have corrected that to note that the GOP’s complaint was investigated by the Office of Congressional Ethics, which referred it to the House Committee on Ethics, which has yet to say whether it will launch a further investigation.

— Robert Farley, with Jesse DuBois