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Wednesday, April 7, 2010 as of 11:14 AM ET


Shannon Bream

Washington, DC


Suit Threatens Planned Parenthood Funds

September 9, 2010 - 2:35 PM | by: Shannon Bream

Two former Planned Parenthood employees-turned-whistleblowers have made stunning allegations regarding the abortion provider’s accounting practices.  In a case now pending in federal court P. Victor Gonzalez alleges that he saw millions in fraudulent overbilling to state and federal governments when he worked as Chief Financial Officer for Planned Parenthood of Los Angeles.

Gonzalez alleges that after he reported the problems internally he was fired.  While Gonzalez was still working for PPLA the state of California launched audits of various Planned Parenthood affiliates, and uncovered more than $5.2 million in overbilling at a single affiliate based in San Diego.  Gonzalez claims that Planned Parenthood lobbyists intervened to stop other audits that were still pending statewide.

In his court filings, Gonzalez has outlined several transactions he alleges show illegal activity.  For example, in one year Gonzalez says PPLA paid $225,695.65 for Ortho Tri-Cyclen birth control pills, yet billed the government $918,084 – for a profit of $692,388.35.

Planned Parenthood Affiliates of California (PPAC) says billing guidelines were unclear, and that nothing illegal or improper happened.  According to PPAC, “The allegations in the lawsuit are false and were addressed by the State of California long ago.”  PPAC adds, “the California State Legislature passed a law in 2004 making it clear that the billing practices at issue in the case are completely permissible.”

The law referenced by PPAC was sponsored by then-Assemblywoman Hannah-Beth Jackson, and allows Planned Parenthood to continue to bill at inflated rates.  Jackson has said she was persuaded by Planned Parenthood that it could not survive absent the mark up for reimbursement, and she considered the issue one of “access.”

Planned Parenthood tried to have the Gonzalez whistleblower case dismissed on a technicality, but the Ninth Circuit Court of Appeals recently denied that motion.  Walter Weber, who represents Gonzalez, says it could take years to actually get the case to trial.  Weber asserts that the issues outlined by Gonzalez are so wide-spread that they are akin to “ACORN-like corruption” – and that federal agencies, like the U.S. Department of Health and Human Services, should consider de-funding Planned Parenthood of any government money.

However, the odds of that happening are slim according to Leslie Paige of the Citizens Against Government Waste (CAGW).  Paige warns, “There ought to be a much more stringent and robust infrastructure there to terminate people’s contracts for misuse of the funds,” when it comes to the abuse of taxpayer dollars at entities across the country.  Paige says that actually happening is “a rarity.”  The most recent figures available show that the Planned Parenthood Federal of America and its affiliates received $349.6 million dollars in government grants and contracts for fiscal year 2008.

Government audits of Planned Parenthood affiliates in New Jersey and Washington state have uncovered similar billing discrepancies.  In addition, a second California whistleblower claim alleging improper ties between Planned Parenthood and its political arm has reportedly launched an investigation by the criminal division of the Internal Revenue Service, according to the New York Times.

The IRS has declined comment on whether or not an investigation is actually in progress.  In the meantime, Planned Parenthood Federation of America (PPFA) has announced it is disassociating itself from the clinics linked to the second whistleblower and will refer patients to other affiliates in the area.

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