The Department of Health was aware its commercial director was being investigated over the alleged backdating of share options at the time of his appointment. And it emerged he is being given over £100,000 per year tax free by the government to pay for luxury London accommodation.

In a severely delayed response to a Freedom of Information Act request by HSJ, the DH said last week that the American R Channing Wheeler had notified them that he and board members of the UnitedHealth Group were being investigated by the US Securities and Exchange Commission for the alleged granting of backdated share options.

Asked what disclosure Mr Wheeler had made to the DH about lawsuits pending when he applied for the position of commercial director, the department said: "Before his appointment, Mr Wheeler did notify the department that he, along with all members of the board of directors and other section 16 officers of UnitedHealth Group, was named in the shareholders derivative suit, regarding the potential backdating of stock options."

It continued: "Mr Wheeler played no role in determining how many options he received, how they were granted to him, at what date they were granted, nor at what price they were granted. All of this was disclosed to the department during the recruitment process".

Asked whether background searches were conducted on Mr Wheeler before he was appointed last May, the DH confirmed that "in accordance with standard appointments procedure, the department completed a thorough exercise of due diligence on the appointment, including referencing and a declaration of conflict of interest".

However, the DH rejected a request for evidence of any discussions between then prime minister Tony Blair, politicians, and DH officials and advisers about Mr Wheeler's appointment, saying that it was not in the public interest.

"There is a recognised public interest in protecting the ability of senior officials to offer candid advice to ministers, and in protecting the processes by which senior public appointments are made."

This week, in answer to a parliamentary question, health minister Ben Bradshaw revealed that on top of Mr Wheeler's£190,000 salary he also received a£35,000 relocation package to move to the UK and continues to be paid£8,400 a month tax free in "contributions to accommodation", as well as two business class flights per year back to the US.

In November, HSJ revealed that Mr Wheeler had donated thousands of dollars to the Republican Party. In the past four years he is understood to have given $11,600 (£5,800) to help fund its presidential and congressional election campaigns.

HSJ has also learned that Russell Reynolds Associates, the US-based recruitment company employed by the DH to hire Mr Wheeler, also has extensive links with the Republican Party. One of the board of directors is Jonathan C Bush - a relative of US president George W Bush.