Healthcare lobbyists outnumber Congress 5 to 1. Are the voters revolted yet?

Polluted Political Games

MAY 28, 2015  Nicholas Kristof                                                                                                                                       I’ve admired the Clintons’ foundation for years for its fine work on AIDS and global poverty, and I’ve moderated many panels at the annual Clinton Global Initiative. Yet with each revelation of failed disclosures or the appearance of a conflict of interest from speaking fees of $500,000 for the former president, I have wondered: What were they thinking?

But the problem is not precisely the Clintons. It’s our entire disgraceful money-based political system. Look around:

• Gov. Chris Christie of New Jersey accepted flights and playoff tickets from the Dallas Cowboys owner, Jerry Jones, who has business interests Christie can affect.

• Senator Marco Rubio of Florida has received financial assistance from a billionaire, Norman Braman, and has channeled public money to Braman’s causes.

When problems are this widespread, the problem is not crooked individuals but perverse incentives from a rotten structure.

“There is a systemic corruption here,” says Sheila Krumholz of the Center for Responsive Politics, which tracks campaign money. “It’s kind of baked in.”

Most politicians are good people. Then they discover that money is the only fuel that makes the system work and sometimes step into the bog themselves.

Money isn’t a new problem, of course. John F. Kennedy was accused of using his father’s wealth to buy elections. In response, he joked that he had received the following telegram from his dad: “Don’t buy another vote. I won’t pay for a landslide!”

Yet Robert Reich, Bill Clinton’s labor secretary and now chairman of the national governing board of Common Cause, a nonpartisan watchdog group, notes that inequality has hugely exacerbated the problem. Billionaires adopt presidential candidates as if they were prize racehorses. Yet for them, it’s only a hobby expense.

For example, Sheldon and Miriam Adelson donated $92 million to super PACs in the 2012 election cycle; as a share of their net worth, that was equivalent to $300 from the median American family. So a multibillionaire can influence a national election for the same sacrifice an average family bears in, say, a weekend driving getaway.

Money doesn’t always succeed, of course, and billionaires often end up wasting money on campaigns. According to The San Jose Mercury News, Meg Whitman spent $43 per vote in her failed campaign for governor of California in 2010, mostly from her own pocket. But Michael Bloomberg won his 2009 re-election campaign for mayor of New York City after, according to the New York Daily News, spending $185 of his own money per vote.

The real bargain is lobbying — and that’s why corporations spend 13 times as much lobbying as they do contributing to campaigns, by the calculations of Lee Drutman, author of a recent book on lobbying.

The health care industry hires about five times as many lobbyists as there are members of Congress. That’s a shrewd investment. Drug company lobbyists have prevented Medicare from getting bulk discounts, amounting to perhaps $50 billion a year in extra profits for the sector.

Likewise, lobbying has carved out the egregious carried interest tax loophole, allowing many financiers to pay vastly reduced tax rates. In that respect, money in politics both reflects inequality and amplifies it.

• Lobbyists exert influence because they bring a potent combination of expertise and money to the game. They gain access, offer a well-informed take on obscure issues — and, for a member of Congress, you think twice before biting the hand that feeds you.

The Supreme Court is partly to blame for the present money game, for its misguided rulings that struck down limits in campaign spending by corporations and unions and the overall political donation cap for individuals.

Still, President Obama could take one step that would help: an executive order requiring federal contractors to disclose all political contributions.

COMMENTS

“President Obama could bring the dark money into the sunlight in time for the 2016 election,” notes Michael Waldman of the Brennan Center for Justice at the New York University School of Law. “It’s the single most tangible thing anyone could do to expose the dark money that is now polluting politics.”

I’ve covered corrupt regimes all over the world, and I find it ineffably sad to come home and behold institutionalized sleaze in the United States.

Reich told me that for meaningful change to arrive, “voters need to reach a point of revulsion.” Hey, folks, that time has come.☐

http://www.nytimes.com/2015/05/28/opinion/nicholas-kristof-polluted-political-games.html

Criminal prosecutions more effective deterrent.

http://huff.to/MOjbYI

How Not to Get Big Pharma to Change Its Ways

Robert Reich

Chancellor's Professor of Public Policy, University of California at Berkeley; Author, 'Beyond Outrage'

Posted: 07/06/2012 8:23 am  (FiDA blog bold.)

Earlier this week the Justice Department announced a $3 billion settlement of criminal and civil charges against pharma giant GlaxoSmithKline -- the largest pharmaceutical settlement in history -- for improper marketing prescription drugs in the late 1990s to the mid-2000s.

The charges are deadly serious. Among other things, Glaxo was charged with promoting to kids under 18 an antidepressant approved only for adults; pushing two other antidepressants for unapproved purposes, including remedying sexual dysfunction; and, to further boost sales of prescription drugs, showering doctors with gifts, consulting contracts, speaking fees, even tickets to sporting events.

$3 billion may sound like a lot of money, but during these years Glaxo made $27.5 billion on these three antidepressants alone, according to IMS Health, a data research firm -- so the penalty could almost be considered a cost of doing business.

Besides, to the extent the penalty affects Glaxo's profits and its share price, the wrong people will be feeling the financial pain. Most of today's Glaxo shareholders bought into the company after the illegal profits were already built into the prices they paid for their shares.

Not a single executive has been charged -- even though some charges against the company are criminal. Glaxo's current CEO came on board after all this happened. Glaxo has agreed to reclaim the bonuses of any executives who engaged in or supervised illegal behavior, but the company hasn't officially admitted to any wrongdoing - and without legal charges against any of executive it's impossible to know whether Glaxo will follow through.

The Glaxo case is the latest and biggest in a series of Justice Department prosecutions of Big Pharma for illegal marketing prescription drugs. In May, Abbott Laboratories settled for $1.6 billion over its wrongful marketing of an antipsychotic. And an agreement with Johnson & Johnson is said to be imminent over its marketing of another antipsychotic, which could result in a fine of as much as $2 billion.

The Department says the prosecutions are well worth the effort. By one estimate it's recovered more than $15 for every $1 it's spent.

But what's the point if the fines are small relative to the profits, if the wrong people are feeling the financial pinch, and if no executive is held accountable?

The only way to get big companies like these to change their behavior is to make the individuals responsible feel the heat.

An even more basic issue is why the advertising and marketing of prescription drugs is allowed at all, when consumers can't buy them and shouldn't be influencing doctor's decisions anyway. Before 1997, the Food and Drug Administration banned such advertising on TV and radio. That ban should be resurrected.

Finally, there's no good reason why doctors should be allowed to accept any perks at all from companies whose drugs they write prescriptions for. It's an inherent conflict of interest. Codes of ethics that are supposed to limit such gifts obviously don't work. All perks should be banned, and doctors that accept them should be subject to potential loss of their license to practice.

ROBERT B. REICH, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.