I Made Steve Mnuchin Return More Than $3 Million to Ill New York Firefighters
I can't find an instance of the Treasury Department giving back money that it had seized from a local government in a payment dispute with the feds -- except for when I exposed what the Treasury was doing to the New York City Fire Department's 9/11 Health Program.
It started with a years-long mystery. The program's director and FDNY top doctor David Prezant had seen parts of his payments to the program docked by the feds for a number of years. Although he asked repeatedly, he never got an answer as to why. When he was nearing $4 million in the hole, he reached out to me.
I also got no explanation, since the government declined to answer me -- at first -- but I did get the documents showing the Treasury Department had seized portions of payments for years. So, I wrote the story describing the previously secret and mysterious dunning.
That story is here.
The press office did start talking to me when the story hit. First they claimed that it was not happening. Then they claimed it wasn't the Treasury Department. Then they admitted it was, but that it was the Department of Health and Human Services that asked for it. They said that Treasury Secretary Steve Mnuchin couldn't do anything about it.
Eventually, I figured out the true part of their argument was that HHS did in fact start the problem by flagging payment disputes that the feds had with various city providers in the Medicare program. Under a law signed during the Clinton administration, Treasury collects such debts by docking payouts to local governments.
That is what was happening here, though the notifications never made their way to Dr. Prezant.
The Treasury Department said there was nothing Mnuchin could do about it, but I also found a portion of that law that says the secretary does in fact have discretion regarding these payment seizures. I confirmed that by interviewing one of the law's authors -- Rep. Carolyn Maloney. She was not at all pleased that Treasury was dinging the FDNY's 9/11 Health Program.
There were a bunch of stories along the way, and outrage by New York lawmakers. Mnuchin ultimately caved, and gave most of the money back -- $3.3 million -- and made sure the ill first responders would not be targeted in the future.
That story is here.