Bush administration officials broke no laws in withholding from Congress estimates of the cost of the new Medicare law, says an internal investigation made public Tuesday.

The Health and Human Services Department inspector general, the agency’s internal watchdog, said its three-month investigation found that administration officials used aggressive tactics to keep from Congress its much higher estimates of the legislation’s cost - $100 billion more than the president and other officials were acknowledging.

Yet the effort - including threats by Thomas Scully, the administration’s Medicare chief until December, to fire chief Medicare actuary Richard Foster - did not violate federal law, the inspector general said.

Scully, the administrator of the federal Centers for Medicare and Medicaid Services, “has the final authority to determine the flow of information to Congress,” the unsigned report said.

That conclusion contradicted the findings of the nonpartisan Congressional Research Service, which in May said that threats against Foster designed to keep him from giving Democratic lawmakers his projections of the bill’s cost probably broke the law. The Justice Department, in an opinion attached to Tuesday’s report, said CRS was wrong.

The General Accounting Office, Congress’ investigative arm, also is looking into whether the gag order violated federal law.

Bill Pierce, an HHS spokesman, said Tuesday’s report showed the administration acted properly. “We hope that with the release of this report we can put behind us the political squabbling and move on to the important work of implementing the new law,” Pierce said.

Democrats, however, said the inspector general’s inquiry was narrowly tailored, underscoring the need for an independent investigation that also looks at what role the White House played in the suppression of information.

Sen. Edward Kennedy, D-Mass., said Tuesday: “The IG’s report describes the extraordinary deception of Bush administration officials to cover up the true costs of the Medicare bill. What they did was clearly wrong by any definition.”

“It sounds as though the Bush administration examined itself and found it did nothing wrong,” said Rep. Pete Stark, D-Calif., senior Democrat on the House Ways and Means health subcommittee.

Dara Corrigan, the acting HHS inspector general, said her office is continuing to investigate the ethics waiver that HHS Secretary Tommy Thompson granted Scully, allowing him to continue work on Medicare legislation while he was looking for work with law and investment firms that have clients affected by the legislation.

In March, the House ethics committee opened an investigation into whether Rep. Nick Smith, R-Mich. was offered an inducement to vote for the Medicare bill.

Democrats have also complained about the Bush administration using taxpayer dollars to promote the drug program through television and print advertising.

The various investigations highlight the trouble the Bush administration has had in promoting the new Medicare prescription drug law, thought to be an election-year boon for the GOP. In addition, the law’s first widely available tangible benefit, the Medicare-approved discount drug card program, has gotten off to a slow, confusing start.

The Associated Press reported a year ago that Scully threatened to fire Foster if Foster released his calculations to Democrats. Scully said his comments were “heated rhetoric in middle of the night.”

But the matter took on a new life when the administration projected in the budget it submitted to Congress in January that the 10-year cost of the bill would be $534 billion, instead of $395 billion estimate used in writing the legislation.

Foster’s estimates, written during consideration of the bill, still have yet to be made public or turned over to congressional Democrats who have requested them.

In March, Thompson promised to release them and said the inspector general’s investigation would clear the air.

“There seems to be a cloud over this department because of this. We have nothing to hide, so I want to make darn sure everything comes out,” Thompson said then.

But since then, he has refused to release the documents in question. House Democrats have sued for the documents in federal court and The Associated Press, which sought the same materials under the Freedom of Information Act, has appealed the withholding of 149 pages out of 162 pages that the agency acknowledges are responsive to its request.