Ethics controversy

In 2014, significant ethics concerns were raised over a conflict of interest arising from Verma's dual roles as both a health care consultant for the State of Indiana and as an employee of a Hewlett-Packard division that is among Indiana's largest Medicaid vendors.^[7] SVC, Inc. had been awarded over $6.6 million in contracts from the State of Indiana, while Verma was concurrently employed with Hewlett-Packard, earning her over $1 million during a period when the company had secured $500 million in State of Indiana contracts.^[13][14] In 2016, her firm collected $316,000 for work done for the State of Kentucky as a subcontractor for Hewlett-Packard, according to documents obtained by the AP through public records requests.^[14][15] Richard Painter, former President George W. Bush’s chief ethics lawyer, called Verma’s arrangement a “conflict of interest” that “clearly should not happen and is definitely improper.”^[14] Ethics experts noted this conflicted with her public duties.^[14]

Ethics and legal investigations

On August 20, 2018, Verma filed a claim requesting that taxpayers reimburse her for jewelry and other items she alleged was stolen on a work-related trip to San Francisco, including a $5,900 Ivanka Trump-brand pendant.^[50][51][52] Although she requested $47,000,^[53] she ultimately received $2,852.40 in reimbursement.^[33] Democratic Representative Joe Kennedy III called on Verma to resign immediately, calling her actions a taxpayer "bailout for stolen goods she chose not to insure".^[54]

In March 2019, Politico reported that in her role as CMS administrator, Verma approved communications subcontracts worth more than $2 million of taxpayer funds to Republican-connected communications consultants and other expenses to boost her visibility and public image, leading to federal ethics and criminal investigations. Included in the consultants' work were proposals to have Verma featured in magazines like Glamour and have her invited to prestigious events to increase her public persona.^[55][56] Verma made an effort to purchase awards and honors for herself using taxpayer dollars.^[57] In July 2020, the HHS Inspector General reported that Verma spent more than $5 million in taxpayer funds to do communications work, and to help raise her profile. The report, a result of a 15-month investigation, concluded that Verma violated federal contracting rules: "CMS improperly administered the contracts and created improper employer-employee relationships between CMS and the contractors".^[58][59][60]

In September 2020, Democrats on four congressional committees concluded ^[57] that she "may have violated federal law," leading Congress to request a formal legal opinion from the Government Accountability Office.^[61][62] The report from GAO, issued in 2023, concluded that CMS did not violate the purpose statute, publicity or propaganda prohibition, or publicity experts prohibition when it obligated appropriations for task orders for communication services.^[63]

Verma spent more than $3.5 million on Republican Party-aligned consultants to promote her. Verma spent nearly $3,000 in taxpayer dollars on consulting fees for organizing a "Girl's Night" party thrown in her honor,^[57] hundreds of dollars for makeup artists, as well as $13,000 to promote herself to win awards and appear on panels.^[57] Verma's consultants aimed to place her on profile-enhancing lists, such as the Washingtonian's "Most Powerful Women in Washington" list, targeted media outlets for Verma with no clear connection to CMS initiatives (such as "Badass Women of DC"), and generated ideas for potential social events for Verma to attend, such as the Ford's Theatre Gala, Kennedy Center Honors, and Motion Picture Association events.^[64][65][66] The consultants provided her with talking points on repealing the Affordable Care Act in 2017 and helped her write a 2018 opinion column under her name in the Washington Post, arguing for Medicaid work requirements.^[60] Verma billed CMS up to $380 per hour for her travel entourage,^[67] as well as drivers at a rate up to $203 per hour and hotel rooms that cost more than $500 per night.^[61] Because these consultants led communications efforts on major policy initiatives and rollouts, CMS leadership provided them with access to sensitive information on proposed rule-makings, internal plans for anticipated policy roll-outs, and other potentially non-public, market-sensitive information.^[61] One of the outside consultants that Verma paid was Marcus Barlow, who had been her spokesperson at her former consulting firm SVC and who worked on three separate contracts for CMS.^[68] According to the New York Times, Barlow's earnings between $209–$230 an hour worked out to more than double the salary he would have received as a federal employee.^[68] As late as December 2020 during Verma's tenure, Barlow accompanied Verma and other CMS officials to an official function at the White House.^[69]

In 2021, Verma said she lost her CMS-issued cell phone two days before President Biden's inauguration, resulting in the elimination of all of its stored records. Verma then failed to complete the standard form explaining how she lost her phone, the court records state. Verma was issued a new iPhone on January 18, which she returned nine days later. Records from that phone can not be accessed because the phone was locked and Verma said she had forgotten her passcode.^[70]