Paying Scully -- who has since left the administration -- violates the law that bans the use of appropriated funds to pay the salary of an official who prohibits another federal employee from providing information to Congress, GAO found. While Congress was debating the Medicare bill earlier this year, Scully threatened to fire chief Medicare actuary Rick Foster if he gave the cost estimates to lawmakers.
"Mr. Scully's prohibition [on the actuary] made HHS' appropriation, otherwise available for payment of his salary, unavailable for such purpose," GAO found.
Sen. Frank Lautenberg, D-N.J., had requested the GAO ruling.
Democrats have charged that Congress would not have passed the Medicare law -- which passed by a narrow margin -- if the administration's higher cost estimates had been made public.
"The Bush administration went so far as to break the law in order to hide information about their flawed Medicare plan," Lautenberg said in a statement Tuesday. "This was a corruption of the process at the highest levels. President Bush's former Medicare chief needs to pay back his salary, as the Government Accountability Office has ordered."