Henry Waxman's investigation began with letters to the insurance industry's powerful trade group and its consultant regarding grassroots tactics. Waxman insurance probe began in July

House Energy and Commerce Chairman Henry Waxman raised eyebrows this week when he launched a financial probe into the nation’s largest insurance companies, which are at the center of the health reform battle.

Now POLITICO has learned that Waxman’s recent investigation began almost a month earlier than previously thought — with letters to the insurance industry’s powerful trade group and its consultant regarding grassroots tactics.


A committee spokeswoman defended the probes — saying lawmakers need to know that private insurance money is being spent effectively as part of the effort to control costs. But the trade group, America’s Health Insurance Plans, is crying foul, saying Waxman is merely trying to bring it in line behind his version of the health reform bill.

“Congressional oversight is not a tool that should be used to chill dissent,” said AHIP spokesman Robert Zirkelbach. “These investigations are nothing more than politically motivated, taxpayer-financed fishing expeditions designed to intimidate and silence health plans.”

The letters are just the latest volley in a low-level battle Waxman is waging with health industry titans.

First, the powerful chairman made it clear he is not bound by an $80 billion deal among the White House, Senate Finance Committee and the pharmaceutical industry when he included provisions in the House bill the industry opposes. And now he is turning up the heat on the insurance industry – whose opposition helped scuttle President Bill Clinton’s health reform efforts in the 1990s.

Earlier this week, Waxman sent letters requesting detailed financial information including compensation, revenue and profit numbers to 52 insurance companies with annual premiums greater than $2 billion.

But nearly a month earlier, on July 21, Waxman and Investigations Subcommittee Chairman Bart Stupak sent letters to AHIP and Dewey Square Group asking for emails and internal documents about a news report in April that several senior citizens had not written letters to the editor submitted under their names.

Waxman’s committee’s spokeswoman said Waxman was merely trying to gather information critical to the health care debate.

“If we're going to get health costs under control, we need to make sure that our private health insurance dollars are spent as efficiently as possible. That means our premium dollars should be paying hospitals and physicians for providing health care, not wasting resources on administrative bloat,” she said.

Zirkelbach said Waxman’s letter to AHIP was sent five days after AHIP sent Waxman and two other Democratic chairmen an eight-page letter detailing concerns with the House health reform bill, including opposition to a government-run insurance option and cuts to the Medicare Advantage program.

After that letter, “the committee demanded that AHIP provide internal documents and emails regarding an isolated, three-month old incident that had already been resolved,” he said.

A month later, Zirkelbach said, Waxman asked the 52 companies for information about what meetings employees attended, where they stayed, and what they ate, and “details about employee compensation far beyond what was asked of companies participating in the TARP program.”

Last October after the Treasury Department announced plans to pump $125 billion into troubled banks, Waxman wrote to the chief executive of Citigroup asking for the number of employees paid $500,000 between 2006 and 2008.

In this week’s letter to insurance companies, Waxman asked for the individual names of those who made more than $500,000 between 2003 and 2008 and a list of company events held outside the office. The committee also sought dividend payments, net income and premium revenue numbers as well as claims payments, expenses and insurance product profits.

U.S. Chamber of Commerce President Tom Donohue wrote to Waxman and Stupak on Friday saying he was “deeply troubled” by the letters the committee sent to insurance companies and urged them to “disavow this letter and withdraw it immediately.”

A prominent Democratic lobbyist, who represents health care and other interests, also called the letters “an an overreach that has the potential to backfire on Democrats. I know nobody likes the insurance industry, but to bludgeon them when you’re losing the legislative debate just looks bad.”

In the episode in question, an insurance industry source said the seniors were sent a pre-written letter to the editor supporting Medicare Advantage and asked to sign and submit it. AHIP included copies of the letters in question signed by the seniors in their response to Waxman. Dewey Square had earlier admitted that an intern misrepresented himself as a grandson of one of the seniors when calling the newspaper to see whether the letter had been printed.

"Dewey Square has produced documents to the committee conclusively demonstrating that every letter sent by DSG to a newspaper or member of Congress was a letter that had actually been signed by the individual. We have every confidence that the committee is acting professionally and appropriately," said a Dewey Square spokeswoman.