GAO: Mar-a-Lago members acted as advisers on VA initiatives, including $16B Cerner EHR contract

Veterans affairs sign
Three members of President Donald Trump's inner circle acted as advisers by making recommendations regarding, for example, the Cerner contract negotiation and mobile application development, the Government Accountability Office said. (JeffOnWire CC BY 2.0)

Three members of President Donald Trump's inner circle acted as advisers by making recommendations on a number of key Department of Veterans Affairs (VA) initiatives, including the Cerner contract, a government watchdog said.

A Government Accountability Office (GAO) report publicly released this week said a review of email exchanges between Florida physician Bruce Moskowitz, Marvel Entertainment Chairman Isaac Perlmutter and financial consultant Marc Sherman indicated the three interacted with VA and other federal officials frequently—at times daily, according to former VA officials—through email and telephone, the GAO wrote.

"The three private citizens acted as advisors by making recommendations regarding, for example, the Cerner contract negotiation, mobile application development, and potential candidates for senior-level VA positions," according to the report.

Input from the three private citizens may have contributed to the "strategic pause" that VA took on the electronic health record system contract negotiation with Cerner to focus on interoperability, the report said, citing a former VA official.

According to this former official, although the delays in negotiating and signing the contract were, in part, due to the need to address the three private citizens’ concerns, the delays were also to ensure that the contract was comprehensive, given the high dollar threshold involved, the GAO said.

RELATED: VA shadow rulers had sway over contracting and budgeting: ProPublica

In May 2018, the VA awarded Cerner a contract to replace VA’s legacy information system, Veterans Health Information Systems and Technology Architecture, with a commercial-off-the-shelf solution. The contract was awarded at a cost of almost $10 billion over a 10-year period.

In addition to the almost $10 billion contract, VA estimates another $6.1 billion will be needed for program management and infrastructure-related costs

Questions rose in 2018 about the influence of that the three members of Trump's private Florida club exerted over the VA. ProPublica reported that the trio—dubbed the "Mar-a-Lago crowd"—had high-level access to senior VA officials and were secretly shaping VA policy. 

"This report vindicates the department and completely undermines the sensational way many media outlets covered this story," VA press secretary Christina Noel said in an emailed statement to Stars and Stripes.

At the request of Sens. Brian Schatz, D-Hawaii, and Elizabeth Warren, D-Massachusetts, the GAO initiated an investigation in spring 2019 into the relationship the three men had with VA officials.

The GAO noted that VA may obtain advice and recommendations from private citizens and other entities to inform various agency decisions.

"This new report confirms that three of Trump's friends, who have no experience in government let alone with veterans matters, were secretly shaping the VA's policies without any transparency or oversight," said Schatz, in a statement. "Being a member of the president's club does not qualify you to influence decisions that affect the millions who served in uniform."

Perlmutter, Sherman, and Moskowitz told the GAO that they did not have a formal role at the department and had no decision-making authority.

RELATED: Federal watchdog says VA's March EHR go-live date was 'unrealistic'

"According to a written statement from the three individuals, they provided advice and introductions when asked by VA officials and helped to connect VA to other private citizens who were health care experts to help VA improve services and health care provided to veterans," according to the report.

Some former VA officials, who were not named in the report, said otherwise. The trio held "some degree of power and influence," a former official told the GAO.

Another former official told the GAO that the trio created a “shadow reporting structure” in which they were stakeholders in VA decision-making without a formal role, the report said.

This "created confusion for some VA staff who recognized the power and influence of the three private citizens but were not given clear guidance on how to handle that power or make decisions under that influence," the former official told GAO.

GAO found that former and current VA officials had varying assessments of the impact the trio had on VA initiatives.

RELATED: VA delays first go-live of Cerner EHR system as project takes longer than expected

One current VA official reported there was no impact because the private citizens’ input did not require VA to deviate from its planned strategy for reaching decisions on key matters. 

The three also acted as organizers by scheduling meetings with VA officials and helping to plan events, the GAO report said, based on a review of  223 email exchanges from 2016 through 2018.

The three men made recommendations to the VA in 28 of those emails. In 70 emails, they provided information to VA officials about different initiatives, including their thoughts on how the VA should handle its community care program. 

According to the GAO's review, Moskowitz worked with at least one VA official to lead discussions on establishing priorities for the development of mobile applications for veterans to use.

In September 2019, a federal district court dismissed a lawsuit brought by the group VoteVets alleging that the three were operating outside that law. The court ruled that the three private citizens did not break the Federal Advisory Committee Act, an open government law that requires transparency of outside advisory groups.

Sen. Warren said the report showed that "corruption ran rampant at the VA, revealing that three unqualified, unaccountable cronies used their personal relationship with the President and membership at his country club as leverage to exert personal influence over health care, technology, personnel, and other key decisions at the Department of Veterans Affairs."