Sens. Frank Lautenberg (D-N.J.) and Edward Kennedy (D-Mass.) will likely ask the General Accounting Office this week to reopen its investigation into government-sponsored Medicare prescription drug ads to determine whether a new crop of ads violates federal law.

In addition, Senate Minority Leader Tom Daschle (D-S.D.) on Friday called for an investigation into allegations that a Centers for Medicare and Medicaid Services actuary was threatened with dismissal if he revealed to Congress the administration’s higher cost estimates for the prescription drug benefit bill.

Both actions come on the heels of GAO’s ruling last week that a mass-mailing and broadcast ads telling seniors that the new prescription drug benefit under Medicare would give them “more benefits” did not violate a federal law against using taxpayer funds for “publicity or propaganda.”

But spokesmen for Lautenberg and Kennedy said GAO’s ruling, which they had requested along with other Democratic lawmakers, did not cover all of the Medicare promotional materials it received during its initial investigation, including some Spanish-language radio ads and Health and Human Services Department video news releases.

“Other questions were raised about these ads after the GAO issued its ruling,” said Kennedy spokesman Jim Manley. “GAO indicated these ads may in fact be impermissible activity.”

A spokesman for GAO would neither confirm nor deny that the nonpartisan investigative arm of Congress was considering expanding its original probe.

Dan Katz, a Lautenberg aide, said his office was still reviewing the HHS materials obtained from GAO and would not release the new suspect ads to the media until it has definitively decided on whether to press GAO to reopen the investigation.

“There’s a whole treasure trove of problematic stuff,” said Katz. “This new material we’ve come across is far worse than anything we’ve seen before. It’s more covert in nature.”

On another front, Alliance for Retired Americans Executive Director Ed Coyle said his group may file a lawsuit as early as this week challenging the legality of all the recent Medicare prescription drug ads.

Coyle said his group, which is affiliated with organized labor, was looking into “whether there is a legal route to take to change these ads or ask HHS to correct the inaccuracies in them.”

Coyle noted that his group could easily find one of its members who is a Medicare beneficiary and who was willing to bring a lawsuit challenging the ads. “We’re going to move on this very quickly,” he said.

Coyle said that while the GAO decision did not rule that the ads were illegal, it gave proof that the ads were misleading to seniors about the prospective benefits of the new law.

Indeed, GAO said the HHS ads for print and broadcast “have notable omissions and other weaknesses.”

But the agency said “the materials are not so partisan as to be unlawful.”

“The flyer and advertisements do not provide beneficiaries with comprehensive information about the benefits available as a result of [the law], or comparative details about these benefits,” GAO concluded in its report.

GAO noted that several issues Democrats had brought up about the ads were valid, including an omission of the cost of the new discount drug card to be offered this summer and suggestions that the estimated $35 premium for prescription drug coverage is a certainty.

The discount drug card could cost as much as $30, and the prescription drug premiums may vary in cost depending on where beneficiaries live.

The GAO inquiry also caused HHS to change a couple of statements in its flyer.

For example, GAO noted that the original HHS flyer highlighted new health savings accounts, but did not note that Medicare recipients were ineligible to participate in such accounts. HHS subsequently took the section about health savings accounts out of the flyer before sending it out.

GAO also cast doubt on the wisdom of HHS buying an ad in Roll Call as part of a campaign that is aimed at Medicare-eligible seniors.

Meanwhile, Daschle indicated on Friday that threatening to fire the CMS actuary may require a criminal investigation.

“We are going to have to review the available options that we have, with regard to how this happened and what ought to be done,” Daschle said on the Senate floor. “I think an investigation of some kind is certainly warranted. Whether this is criminal or not is a matter that we will certainly want to clarify. But if not criminal, it is certainly unethical.”

Knight Ridder first reported the actuary’s allegations Thursday and detailed Bush administration plans to prevent the actuary from telling Congress, before they voted on the bill, that the cost of the prescription drug benefit would likely cost nearly $150 billion more than the Congressional Budget Office’s original $395 billion estimate.

Daschle and House Minority Leader Nancy Pelosi (D-Calif.) both called on the respective Republican leaders of the House and Senate to bring the Medicare bill back to the floor for another vote.

“It was an illegitimate vote,” Pelosi charged in a statement Friday.

But John Feehery, spokesman to Speaker Dennis Hastert (R-Ill.), said the controversy is overblown. “The sad part is Nancy Pelosi wants to take away these health benefits from seniors,” he said. “She’d rather play politics than give health care to America’s seniors.”