WASHINGTON--Former CMS Administrator Tom Scully has agreed to pay $9,782 to settle allegations that he improperly claimed travel expenses as head of Medicare while looking for another job.

Scully resigned from CMS in December 2003 to join the Washington office of law firm Alston & Bird, and took the trips during several months before leaving the government position.

In the settlement agreement with the U.S. Attorney's Office, however, Scully denied the claims were inappropriate, saying he had a waiver from then-HHS Secretary Tommy Thompson to look for employment while still functioning as CMS administrator (see HomeCare, January 2004). He also said trips that mixed both federal business and personal meetings would be eligible for reimbursement by the government.

Scully said that in his three years as CMS administrator, he "made numerous visits to the CMS regional offices," gave speeches at universities, and participated in town hall meetings for members of Congress.

"The few times I did combine personal meetings with this type of business trip during my last four months in office, I did so openly, on the understanding that such joint trips were permissible," he said.

However, Senate Finance Committee Chairman Charles Grassley, R-Iowa, said the waiver from Thompson was inappropriate and that he intends to question the Department of Justice about the case.

"As for the settlement," Grassley said, "it's an insult to civil servants and taxpayers for a high-level official to look for a job on government time, seek false reimbursement for job search expenses and to misrepresent what he was doing and why he was doing it."