Consulting Firm Tied to White House Given Millions for Health Care Ad Campaign

A media consulting firm with ties to White House senior strategist David Axelrod has been hired to produce a multi-million dollar ad campaign touting the Obama administration's health care overhaul.

But while lobbying analysts say the move is logical, some Republicans are questioning whether Axelrod stands to gain from the profits.

AKPD Message and Media, founded by Axelrod, along with firm GMMB, were paid $12 million by Health Economy Now and Americans for Stable Quality Care, a coalition that includes Pharmaceutical Research & Manufacturers of America, or PhRMA, to produce ads promoting President Obama's health care reform.

The firms received over $300 million to manage ads for Obama's presidential campaign.

"GMMB and AKPD are among the best in the business so it was a no-brainer to hire them to help this new effort to explain what health care reform means for Americans," Americans for Stable Quality Care spokesman Phil Singer told FOXNews.com on Wednesday.

Obama announced an agreement with PhRMA on June 22 to achieve $80 billion in savings as part of his reform agenda. On August 8, a coalition of interest groups including PhRMA pledged to spend $150 million to help Obama's overhaul health care this fall.

Axelrod left the firm on Dec. 31, 2008, with the agreement that it owed him $2 million -- and some Republican critics now question whether the firm was hired to indirectly fund his severance package.

The House Republican Conference issued a one-page memo Tuesday, questioning the sincerity of the administration's calls for change and transparency. "As the pharmaceutical industry spends hundreds of millions supporting a government takeover of health care, some may wonder whether White House senior advisors earning millions of dollars paid for in part by the pharmaceutical industry represents the kind of change American can believe in?"

Axelrod, a veteran journalist and former columnist with the Chicago Tribune, founded AKPD Message and Media in 1984 following his work managing Paul Simon's victorious U.S. Senate campaign.

The firm, formerly known as Axelrod and Associates, provides consulting and advertising for Democratic candidates and causes. Axelrod's son, Michael, joined AKPD in 2006 as the firm's research director. AKPD also employed Obama's presidential campaign manager David Plouffe as a partner beginning in 2003.

Despite questions about the propriety of using Axerod' firm while Axelrod promotes the president's plan, negotiated with the coalition, PhRMA Senior Vice President Ken Johnson said that "the dots just don't connect."

Johnson, who said he did not know the two firms had been hired until a news reporter told him, said the decision to employ them was made by the "campaign teams" for Health Economy Now and Americans for Stable Quality Care -- not by PhRMA or the White House. He said it was a logical move to employ the same firms that launched Obama's presidential campaign to victory.

"In a perfect world, it's a situation we don't need right now, but they are very good consultants with very good reputations," he said.

Kenneth Gross, a lobbying law expert at Skadden, Arps, Slate, Meagher & Flom, echoed Johnson's sentiments.

"To victor go the spoils. The health care message is very much like a campaign message and it's not surprising they would use the same vendor that knows the substance of the administration's issues," Gross said.

"If there was an issue about the viability of this firm and he was directing it to be used to essentially pay an obligation to him, that would raise an issue," he said. "But there's no evidence or facts to support that claim."

But House Republicans insist PhRMA had a hand in hiring the firms -- and continue to question the motives of both the drug lobby and the White House.

"Out of all the firms Pharma could choose to do their media work, they chose David Axelrod's firm, which still maintains Axelrod's son on the payroll and owes Axelrod himself $2 million," House Republican Conference spokesman Mike Lloyd wrote in an e-mail.

"It's hard to believe the public can be assured that David Axelrod isn't influenced by any of this in the course of the health care debate. For an administration that promised 'change' and to be above even an appearance of impropriety this does not even come close to passing the smell test," Lloyd wrote.