Video news releases: Selling changes to U.S. Medicare
In early 2004, Home Front Communications (HFC) was identified as the company that produced two video news releases for the federal Department of Health and Human Services (DHHS) promoting the benefits of the recently passed but very controversial Medicare law. The VNR's featured scripts produced by the administration with two people posing as 'journalists' doing what purported to be interviews.
A spokesman for the Department of Health and Human Services, Kevin W. Keane, told the New York Times "the use of video news releases is a common, routine practice in government and the private sector, ... Anyone who has questions about this practice needs to do some research on modern public information tools." 
The revelation of the U.S. government using a VNR prompted six Democratic Senators, led by Senator Edward Kennedy, to write to the heads ABC, NBC, CBS, WB, CNN, UPN, Fox and the National Association of Broadcasters calling on them not to broadcast the tape. 
The DHHS incident also re-ignited debate amongst journalism and media organisations about the production and use of video news releases. The Association of Health Care Journalists decried the use of VNRs. In a media statement AHCJ President, Andrew Holtz, described the identification of a government contractor as a reporters as "a triple assault on public trust."
"This practice lowers the standards of public service to that of common hucksterism, displays a lack of respect and understanding of the role of journalists in a free society, and undermines the credibility of both journalists and public officials," he stated. 
The President of the American Society of Newspaper Editors, Peter Bhatia, wrote to Tommy G. Thompson, who was then head of the U.S. Department of Health and Human Services, protesting against the "deceptive methods" used by DHHS in the VNRs. "It is fair, of course, for the government to communicate with citizens via press releases on video as well as in print. It is not ethical or appropriate, however, to employ people to pose as journalists, either on or off camera," Bhatia wrote. ANSE argued that the lack of identification of the government as the source "is outside the bounds of ethical behavior for HHS or any other government agency" and urged Thompson to "discontinue use of this misleading practice." 
The Radio-Television News Directors Association was more pragmatic and re-stated its policy developed a decade earlier. "RTNDA does not endorse the use of so-called video news releases, but neither do we reject their use, as long as that use conforms to the association's Code of Ethics," their policy states.
The code of ethics states that "sound journalistic practice calls for clear identification of all material received from outside sources, including material distributed in the form of video or audio news releases." 
PR Industry Reactions
Candace White, who authored a guide for the Public Relations Society of America on the use of VNRs, believes the onus is on the reporters to disclose any use of them. "VNRs are the same thing to television as press releases are to newspapers. It is up to the reporter on the television station to identify the source," she said.
The Government Accountability Office Verdict
Congress' nonpartisan investigative arm, the Government Accountability Office (GAO), found that the VNR produced by Home Front Communications for the Centers for Medicare and Medicaid Services (CMS) - a part of the Department of Health and Human Services - on changes to Medicare violated the ban on government funds for on publicity and propaganda.
Download GAO report on VNRs touting the Medicare law - 120 kb PDF file
In its report the GAO wrote "CMS explained to us that HHS hired Ketchum, Inc., to disseminate information regarding the changes to Medicare under MMA. Specifically, HHS contracted with Ketchum to assist HHS and its agencies with a 'full range of social marketing activities to plan, develop, produce, and deliver consumer-based communication programs, strategies, and materials.'" 
In its report the GAO explained that "HFC wrote the VNR scripts, which were reviewed, edited, and approved by CMS and HHS. ... HFC completed all production work, including filming, audio work and editing. The final VNR packages were reviewed and approved by CMS and HHS."
While CMS defended its funding of the VNR's to the GAO on the grounds that it is a "standard practice in the news sector" and a "well-established and well-understood use of a common news and public affairs practice", it was an argument they rejected. "While we recognize that the use of VNR materials, with already prepared story packages, is a common practice in the public relations industry and utilized not only by government entities but also the private and non-profit sector as well, our analysis of the proper use of appropriated funds is not based upon the norms in the public relations and media industry," the GAO's General Counsel, Anthony H. Gamboa, wrote in the agency's decision.
"In a modest but meaningful way, the publicity or propaganda restriction helps to mark the boundary between an agency making information available to the public and agencies creating news reports unbeknownst to the receiving audience," he wrote.
"We conclude that of the three parts of the VNRs, one part--the story packages with suggested scripts--violates the prohibition. In neither the story packages nor the lead-in anchor scripts did HHS or CMS identify itself to the television viewing audience as the source of the news reports. Further, in each news report, the content was attributed to an individual purporting to be a reporter but actually hired by an HHS subcontractor," the GAO found.
A spokesman for the HHS, Bill Pierce rejected the GAO findings and defended the practice on the grounds that how the material was used was for the news producers and editors to decide. "Each of those segments were separated into video and audio tracks. We left it there for producers to decide…" Pierce said. "They could have stripped out sound and put in voiceover, they could have put a voiceover in providing attribution. That's why we produced it the way we did," he told The Hill. [ 
Material from the VNRs were used on forty television stations.
Medicare Refuses to Cap VNR Use
In testimony before the U.S. Senate Homeland Security and Governmental Affairs Committee in April 2005, Medicare administrator Mark McClellan "would not rule out using government-produced news releases to inform seniors about the new Medicare prescription drug benefit," although they would not be a "main part" of a senior outreach program. McClellan also dismissed the GAO ruling against earlier Medicare VNRs and subsequent warnings, saying that "the binding interpretation for him was a determination by Justice's Office of Legal Counsel that video news releases were legal so long as the information was accurate." 
- Robert Pear, "U.S. Videos, for TV News, Come Under Scrutiny", New York Times, March 15, 2004.
- "Medicare VNRs trashed as propaganda", O'Dwyers PR Daily, March 16, 2004.
- Association of Health Care Journalists, "Journalists Cry Foul: Association of Health Care Journalists faults government stealth ads", Media Release, March 17, 2004.
- American Society of Newspaper Editors, "ASNE protests HHS video press release", Media Release, March 18, 2004.
- Radio-Television News Directors Association, "RTNDA Urges Caution and Disclosure When Using Video News Releases", Media Release, March 18, 2004.
- Tonya Jameson, "Bogus `news' undermines credibility: TV news should come clean about use of VNR press releases", Charlotte Observer, March 28, 2004.
- Public Relations Society of America, "Statement of the Public Relations Society of America (PRSA) on Video News Releases (VNRs)", Media Release, April 20, 2004.
- Government Accounting Office, "Matter of Department of Health and Human Services, Centers for Medicare & Medicaid Services - Video News Releases", May 19, 2004.
- Michael S. Gerber, "GAO calls Medicare video news releases illegal propaganda", The Hill, May 20, 2004.
- Mark Sherman, "Administration ads violated law", The State.com, May 20, 2004 . (This is an Associated Press story)."The Bush administration's promotion of the new Medicare law through videos made to look like news reports violated a prohibition against using public money for propaganda, Congress' General Accounting Office said Wednesday."
- Tony Pugh, "Medicare chief not ruling out using video news releases," Philadelphia Inquirer, April 6, 2005.