Vermont Resolves Fraud Claim Against Obamacare Architect

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MONTPELIER — The state of Vermont has reached a punishing settlement with the man who became famous not for his role in helping to craft President Barack Obama’s Affordable Care Act — but his remarks boasting about how a lack of transparency was crucial to the passage of the sweeping health care bill.

Word of the settlement, stemming from the discovery of economic consultant Jonathan Gruber’s bogus billing practices, trickled out from Vermont Attorney General T.J. Donovan’s office on Friday afternoon.

Investigators alleged Gruber defrauded the state while slapping together a single-payer health care plan for the Vermont, called Green Mountain Care.

In a press release outlining the terms of the settlement, Donovan’s office announced that the Massachusetts Institute of Technology professor has “agreed to forgo any further payment that might be due from the state under the contract, including $90,000 outstanding for retaining amounts and unpaid research time.”

The settlement means Gruber is essentially barred from performing any further consulting work with the state of Vermont, while prosecutors in exchange will not charge him with violating the state’s Civil False Claims Act, which Donovan determined that Gruber ran afoul of.

“Dr. Gruber’s personal services contract with the State was a standard ‘time and materials’ contract which specified that Gruber would be paid only for services actually performed and required Gruber to submit monthly invoices describing the work performed and the amounts billed for such work,” Donovan’s release stated. “The Office’s investigation revealed that Gruber submitted at least two invoices that were false with respect to the amount of work performed by Gruber’s research assistant.

“Further, the supporting documentation provided by Gruber did not reflect the actual hours worked by the research assistant, nor did the assistant keep records accurately reflecting the hours he devoted to the state project.”

According to the settlement agreement, Gruber had inked in 2014 a maximum-$450,000 contract with Vermont in return for his research on a proposed single-payer health care system, which was subsequently scrapped.

Gruber had been earning $500 per hour from the state, while his research assists had netted $100 per hour, according to state records.  

Less than a year after contractual work began, state officials began contesting Gruber’s invoices:


Vermont officials later determined that Gruber had submitted two false invoices on behalf of his research assistant totaling $100,000.

Coincidentally, 2014 also happened to be the same year that Gruber’s comments on the passage of Obamacare during a University of Pennsylvania forum surfaced, igniting a firestorm of criticism. Gruber’s comments were interpreted as an admission that the Obama administration relied on subterfuge to get the health care bill passed.

“This bill was written in a tortured way to make sure the CBO [Congressional Budget Office] did not score the [health care] mandate as taxes,” Gruber said at the time. “If the CBO scores the mandate as taxes the bill dies.

“If it made it explicit that healthy people pay in and sick people get money it would not have passed.”

Gruber declared that “lack of transparency is a huge political advantage.”

“Basically, call it the stupidity of the American voter, or whatever, but basically that was really critical to getting the thing passed,” he said. “I wish we could make this transparent but I’d rather have this law than not.”

Read a copy of the full settlement agreement:

2017 Gruber Settlement by Evan on Scribd