- The Washington Times - Tuesday, December 11, 2012

President Obama campaigned on a pledge to close the revolving door between special interests and government in Washington, but the career trajectory of the man he has picked to fill the top legal job at the Department of Health and Human Services shows the door hasn’t completely stopped spinning.

William B. Schultz worked as a Justice Department lawyer in the Clinton administration, then spent 10 years as a partner at a law firm in Washington where he represented major pharmaceutical and medical companies, according ethics disclosure forms.

Nominated to be general counsel at HHS months ago, Mr. Schultz is working in the job in an acting capacity for now. Before then, he was a partner at the Zuckerman Spaeder LLP law firm in Washington from 2001 to 2011.

His legal work on behalf of medical and pharmaceutical companies has spanned the globe, ethics filings show. Overseas clients included Actavis Inc. of Iceland, and Ranbaxy Laboratories Inc., based in India, as well as Boehringer Ingelheim Corp. in Germany, which recently agreed with the Justice Department to pay nearly $100 million to settle a False Claims Act investigation.

Mr. Schultz’s U.S.-based clients include Vanda Pharmaceuticals Inc. in Maryland and Lavipharm Laboratory Inc. and Catalent Pharma Solutions Inc., both based in New Jersey.

He also has worked for the Pharmaceutical Care Management Association, a powerful Washington trade group that represents pharmacy benefit managers and has spent more than $1.5 million so far this year lobbying federal agencies and lawmakers.

Among others, the trade group lobbies the White House, Congress and the Centers for Medicare and Medicaid Services, which is under the purview of the HHS, on drug pricing and other issues, disclosure forms show.

Because he never worked as a lobbyist, Mr. Schultz won’t require a waiver from Mr. Obama’s executive order on ethics, but he is still subject to conflict of interest recusal requirements.

Ethics specialist Craig Holman, legislative representative for the watchdog group Public Citizen, said Mr. Schultz will have to sign an ethics pledge to recuse himself from taking official actions that “directly and substantially” impact any former employers or clients within the past two years.

“Under this ethics arrangement, he may not get involved in official actions that benefit his former employers or clients differently than the rest of the community, such as providing a government contact to one of his former employers or clients,” Mr. Holman said.

Mr. Schultz declined to comment through HHS spokesman Bill Hall, who said it’s standard practice for nominees to refrain from making public comments pending confirmation. Mr. Hall said Mr. Schultz will not participate “in any matter specifically involving his former clients” for two years from the time he joined HHS.

Through a partnership agreement at his old law firm, Mr. Schultz will receive installment payments on the balance of his capital account and a pro-rata partnership share distribution to be paid quarterly over two years, forms show. As of April 12, 2012, when Mr. Schultz filed his ethics forms, the capital account was worth $134,000.

After the White House announced Mr. Schultz’ nomination in April, Zuckerman Spaeder issued a news release that offered its congratulations and detailed his work for the firm.

“Much of the success we are experiencing in our food and drug work can be attributed to his dedication to help build this practice,” the law firm’s chairman, Graeme W. Bush, said in the statement.

The firm also said that during his time there, Mr. Schultz founded the firm’s food and drug practice, which “represents a range of clients in courts, before Congress, in front of the [Food and Drug Administration] and other government agencies, and during investigations by the Department of Justice or other law enforcement bodies”.

Mr. Schultz isn’t the only top health care appointee waiting for confirmation months after being nominated.

Marilyn Tavenner, a former health plan executive tapped to run the nation’s Medicare and Medicaid agency, has seen her nomination languish even longer.

According to her ethics forms, the former executive at Hospital Corporation of America will receive more than $160,000 per year for the rest of her life from her old employer.

HCA lobbies on Medicare issues, but officials told The Washington Times earlier this year that there were no plans to issue her a waiver from Mr. Obama’s ethics rules.

Under the rules, appointees are barred for two years from participating in “any particular matter involving specific parties that is directly or substantially” related to former employers and clients.

Because she left HCA in 2006, Ms. Tavenner wouldn’t need a waiver, officials told The Times. On her ethics form, she wrote, “I will continue to receive $162,524 for life” through a special HCA supplemental executive retirement plan.

• Jim McElhatton can be reached at jmcelhatton@washingtontimes.com.

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