IRS Also Targeting Conservative State Office Holders

Discussion in 'Politics' started by pspr, Jun 5, 2013.

  1. pspr


    If you even run for office as a conservative expect the IRS to hit you any way it can to denigrate your office.

    Eight months after a federal court approved a $1.5 billion Medicaid fraud settlement -- the second largest in U.S. history -- federal officials have yet to release any of the roughly $125 million owed to Virginia for being the lead investigator.

    The Abbott Pharmaceuticals illegal marketing case was investigated for five years by the nationally known Medicaid Fraud Control Unit in the office of Virginia Attorney General Ken Cuccinelli. Officials have told the office that the Internal Revenue Service has refused to properly fill out post-case paperwork for almost a year, which is holding up the disbursement intended for Virginia law enforcement.

    But the delay, which state officials say is unprecedented, has Cuccinelli wondering whether the problem is more about politics than completing paperwork.

    "For a long time we thought it was glaring incompetence," Cuccinelli said in an interview. "But in light of the last month or two, we're now beginning to wonder whether maybe there are more deliberate motives."

    It was a reference to the recent scandal and congressional testimony stemming from reports of the IRS targeting conservative non-profit groups for investigation.

    Cuccinelli, a conservative Republican and Tea Party darling running for governor this year, has been a chief antagonist of the federal government -- being the first attorney general to file suit challenging President Barack Obama's Affordable Care Act and also fighting EPA regulations on greenhouse gas emissions.

    "I have to openly wonder whether this is an intentional act to deny Virginia its asset forfeiture money," Cuccinelli said.

    The $1.5 billion resolution included a criminal fine and forfeiture totaling $700 million -- a $500 million fine to the federal government and roughly $200 million in criminal asset-forfeiture penalties. There were also civil settlements with the federal government and the states totaling $800 million.

    The $125 million reflects Virginia's share of roughly $200 million in asset forfeiture funds owed to the state and local law enforcement agencies involved in the investigation of Abbott, which settled a case that it illegally marketed the prescription drug Depakote for non-approved uses.

    Abbott paid the full amount of its settlement to the U.S. Treasury Department last October, but officials have since refused to release Virginia's portion of the settlement.

    According to a release from the attorney general's office, its unit accounted for more than 38,000 man-hours on the Abbott case – " and a number the federal government has not disputed."

    "Despite repeated requests, the federal authorities have not revealed precisely how many hours federal agencies spent on the investigation," the release said. "However, based on what is known about the time other agencies spent on the case, it is estimated that Virginia's Medicaid Fraud Control Unit performed at least 80 percent of the investigative work (resulting in the estimated $125 million calculation)."

    Cuccinelli said his office was informed last August that Virginia was in line to receive only $95 million of the $125 million it was owed according to Treasury Dept. guidelines for asset forfeiture in such cases.

    “Later, Treasury officials told us they wouldn’t even turn over the $95 million because of the sequester. This is despite the fact that it’s not federal money, but money that a private defendant paid to settle a case – money which was to be turned over shortly thereafter to our office and the other agencies involved in the investigation," Cuccinelli says in the attorney general's release.

    “Now the hold-up is the IRS, which, according to the Treasury Department, refuses to complete its paperwork so the money can be properly distributed," he continued. "...It doesn’t take a year to complete the paperwork."

    Cuccinelli said he wants to use the majority of the proceeds for grants to local police and sheriffs’ departments to buy equipment such as bulletproof vests, tactical vehicles and police cars. In addition he also wants to use $20 million for training for Virginia’s local prosecutors.

    He said the interest accrued on the money owed to the state over the last eight months would be enough to purchase 1,000 bulletproof vests.

    “During the eight months the Treasury Department has been withholding the money, they have been depriving Virginia law enforcement of tools to make their jobs safer,” said Cuccinelli.

    “While the federal government has kept nearly $575 million in fines and asset forfeiture from the case for itself, it makes excuses and refuses to turn over the $125 million Virginia is due," he added. "The only reason the federal government has this money is because of a multiyear, 26-state investigation initiated and led by Virginia’s Medicaid Fraud Control Unit."

    A statement of facts in the criminal action filed in Abingdon says that between 1998 and 2006, Abbott maintained a specialized sales force to market Depakote across the country in nursing homes for the control of agitation and aggression in elderly dementia patients -- uses that did not have approval from the Food and Drug Administration.

    Between 2001 and 2006, it also was marketed as a combination drug with anti-psychotic medication to treat schizophrenia.

    Cuccinelli's office said the investigation "also revealed that Abbott paid rebates to health-care professionals and long-term-care pharmacies for increasing their off-label use of Depakote."