The Bush administration's promotion of the new Medicare (search) law through videos made to look like news reports violated a prohibition against using public money for propaganda, Congress' General Accounting Office (search) said Wednesday.

The materials in English and Spanish were produced by the Health and Human Services Department, but did not identify their source. The videos, or parts of them, aired on at least 40 TV stations in March, the department said.

The GAO report was issued just as the administration was trying to blunt criticism of the new law by trumpeting discounts for people who use Medicare-approved drug cards when filling their prescriptions.

While there were several components to the video news releases, GAO faulted the administration for distributing seemingly independent, ready-to-air reports that did not inform viewers that they came from the government.

The story packages violated the law because the government "did not identify itself as the source of the news report," said GAO, Congress' investigative arm.

The English version ends with a woman's voice saying, "In Washington, I'm Karen Ryan reporting." A man identifies himself as a reporter named Alberto Garcia in the Spanish-language version.

"The viewing audience does not know ... that Karen Ryan and Alberto Garcia were paid with HHS funds for their work," congressional investigators said.

Sen. Frank Lautenberg, D-N.J., who asked for the GAO inquiry, said President Bush's re-election campaign should repay the government for the cost of the videos. Lautenberg said he will introduce legislation to force the reimbursement.

"These funds were meant to help our seniors, not the president's re-election campaign," he said.

HHS has said it spent about $43,000 to produce the materials.

Department officials did not immediately provide comment Wednesday.

Kevin Keane, a department spokesman, has said that the videos should have identified who made them. When officials, including Secretary Tommy Thompson, addressed the issue with reporters in March, they played similar videos made by the Clinton administration in an effort to show how common video news releases are.

The principal difference, however, was a clear disclaimer in the Clinton administration product identifying HHS as the producer.

The promotional materials were produced under a contract with Ketchum Inc., a Washington-based public relations firm. Ketchum (search) hired a company named Home Front Communications, which specializes in video news releases, the GAO report said.

Congressional investigators previously examined a television ad about changes in Medicare that the administration aired in the winter. They found that the ad was legal, but contained "notable omissions and errors."

Critics contended that the ad was a thinly disguised Bush campaign commercial. National Media Inc. (search), a media firm also working for Bush's campaign, had a share of the publicly funded $12.6 million contract.

National Media has since withdrawn from the Medicare ad contract. A second ad, touting the new discount drug card, is now running.

Video news releases are widely used both in and out of the government. As a result of the Medicare controversy, local television news and public relations experts have said they will re-examine how the videos are made and distributed.

PR Week, an industry publication, recently ran an article with tips on how to use VNRs without sparking controversy.

Among the tips: "Don't try to hide the client — broadcasters are fine with VNRs as long as they are identified."