Month: September 2006

[posted on corp-focus, September 14, 2006]

Cesspool

By Russell Mokhiber and Robert Weissman

Ah, the cesspool.

That would, of course, be Congress.

Aka Capitol Hill.

We caught a whiff of the cesspool the other day when a group of corporate liberals announced that they were going to launch yet another “newspaper” to cover the cesspool.

Millionaire media mogul Robert Allbritton and journalist Martin Tolchin have teamed up to launch something they will call The Capitol Leader.

The Capitol Leader will begin publishing on November 21 and will join an already crowded field consisting of Roll Call, The Hill, the National Journal and Congressional Quarterly.

Allbritton succeeded his father, Joe L. Allbritton, as chief executive at the Washington, D.C.-based Riggs Bank. Riggs, you may recall, was sold in 2004 after it pled guilty to criminal charges related to illegally operating bank accounts for former Chilean dictator Augusto Pinochet, and routinely ignoring evidence of corrupt practices in managing more than 60 accounts for the government of Equatorial Guinea.

Junior is now runs Allbritton Communications Co. — which owns two local DC television stations — and is set to be publisher of the Capitol Leader.

Tolchin is a former New York Times correspondent who co-founded the Hill in 1994.

“There is so much going on up there that there’s definitely room for another publication, and probably many more publications,” Tolchin told the Washington Post. “I don’t think we’ll be the last.”

Indeed, it won’t.

And although there’s surely a lot of fodder for investigative reporting on the Hill, that’s not why.

It’s about corporate advertising.

These Capitol Hill publications are fundamentally high-priced corporate issue-ad delivery devices to our anesthetized elected representatives. Members and staff on the Hill read the publications, so corporations know that if they take out ads in them, they reach a very select audience.

Let’s look at the September 12, 2006 44-page issue of Roll Call.

It ran 19 full-page ads — 16 of them from corporate sponsors. (The other three were ads by TIAA-CREF, Roll Call itself (promoting a Congressional basketball game), and the Alaska Wilderness League.)

The 16 full-page corporate advertisers were:

– National Cable & Telecommunications Association

– American Hospital Association

– American Petroleum Institute

– Mywireless.org (a front group for the Cellular Telecommunications & Internet Association)

– Pharmaceutical Research and Manufacturers of America

– Shell Oil

– Coalition for Community Pharmacy Action (a front group for the National Association of Chain Drug Stores and the National Community Pharmacists Association)

– Global Military Aircraft Systems, AleniaNorthAmerica, L3 Communications and Boeing (“The C-27J JCA Is Needed Now More Than Ever.”)

– American Iron and Steel Institute (“More steel is recycled each year than all other materials combined.”)

– Genentech

– Lockheed Martin

– National Association of Realtors

– The Auto Alliance (BMW, DaimlerChrysler, Ford Motor, General Motors, Mazda, Mitsubishi, Porsche, Toyota, Volkswagen) (“9 Million Alternative Fuel Vehicles and Counting”)

– USA For Innovation (corporate front group headed by Ken Adelman)

– TV For Us (wewantchoice.com)(telecommunications astroturf group)

– American Chemisty Council

On September 11, 2006, Roll Call carried a special 40-page B section titled “What’s Next — Guide to Congress.” (The newspaper itself for that day was itself 40 pages).

This “What’s Next” section carried 10 full-page ads — nine from corporate sponsors and one from George Washington University.

Here were the corporate ads that ran in the aptly named Guide to Congress:

– Federalist Group — An Ogilvy PR Worldwide Company (“From Capitol Hill to Main Street — Getting Your Voice into the Conversation is Critical to Success.”)

– Investment Company Institute (“Mutual Funds — the Retirement Investment of Choice.”)

– American Medical Association (“Congress Must Stop Medicare Physician Cuts Before Leaving for the November Elections.”)

– Southern Company (“Why Are We Investing More Than $6 Billion in Cleaner Energy? It’s Our Backyard Too.”)

– DRS Technologies (“Keeping Watch — Threat and Intelligence Surveillance, Critical Infrastructure Protection, Maritime Security, Border Management”)

– National Apartment Association (“Because Not Every Home Is a House.”)

– Dow Chemical Company (“Meet the Element of Change.”)

– American Health Care Association (nursing homes)

– Bosch (auto parts conglomerate)

Today’s 36-page The Hill (September 24, 2006) newspaper carried 13 pages of corporate ads. They are:

– National Cable and Telecommunications Association (“Cable Delivers Today. Why Wait?”)

– Shell Oil Company. (“Lance Nacio is proud his office is the Gulf of Mexico, where the seafood and energy industries exist side by side.”)

– American Petroleum Institute (“It’s time for Congress to put our offshore oil and natural gas resources to work for America.”)

– AstraZeneca (A two-page ad — “AstraZeneca is the first pharmaceutical company to join the FDA Alliance — a coalition committed to a strong, effective and well-funded Food and Drug Administration.”)

– American Health Care Alliance (nursing home industry — “A special thanks to our nation’s governors — and a majority of the U.S. Congress — for standing up for our frail elderly by opposing deep cuts to nursing home care.”)

– Nuclear Energy Institute (“Pass Yucca Mountain Legislation Now!”)

– ProtectingAmerica.org (Insurance industry and others)

– National Association of Realtors (“Congress — Pass Small Business Health Plans”)

– Lasker Foundation and Research America (primarily pharmaceutical industry supported) (“2006 Candidates — Your constituents want to know.”)

– KnowLegis (“free e-mail alerts to put you in the know”

– Bobby Van’s Steakhouse (“Best porterhouse in town, five years in a row.”)

– United Technologies (“There’s something in it for all of us.”)

While these papers do an admirable job covering the nuts and bolts of the legislative process, including how big business influences policy-making, they have actually become part of the influence game itself.

Roll Call has a circulation of 18,000.

A full-page ad in Roll Call costs $10,175.

Unless you want the back page in color — then you are talking about a premium.

But don’t ask about the back page. It’s booked for the foreseeable future.

That’s why Marti Tolchin and Robert Allbritton are salivating.

Not because they want to recreate the next I.F. Stone’s Weekly.

But because they want to run another K Street Weekly.

Ching.

Ching.

Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime Reporter, . Robert Weissman is editor of the Washington, D.C.-based Multinational Monitor, . Mokhiber and Weissman are co-authors of On the Rampage: Corporate Predators and the Destruction of Democracy (Monroe, Maine: Common Courage Press).

It’s a grim day for the pharmaceutical industry.

A federal monitor has forced out the CEO of Bristol-Myers-Squibb (BMS), for violating the terms of an agreement with prosecutors.

The old agreement involved a major accounting manipulation, by which BMS pushed product to wholesalers to misleadingly boost earnings. Under the terms of the deal, BMS was supposed to avoid wrongdoing for two years. That turned out to be too tough of a standard. The federal monitor found that BMS’s effort to cut a deal with a generic firm, to keep generic versions of its blockbuster anto-clotting drug Plavix, violated its obligation to maintain clean hands.

Meanwhile, British giant GlaxoSmithKline has agreed to pay more than $3 billion to the Internal Revenue Service to settle tax avoidance charges. The Glaxo dispute with the IRS concerned the issue of transfer pricing — the allocation of profits and expenses between the U.S. subsidiary and other parts of the multinational conglomerate. The IRS claimed that the U.S. subsidiary under-reported its profits to avoid paying its fair share of U.S. taxes. Glaxo is getting off with paying less than the IRS said it owed, but at the least the settlement evidences serious wrongdoing (which Glaxo, predictably, continues to deny, saying it settled to avoid the costs of protracted litigation).

On this point, it’s worth reflecting for a moment on the stunning record of pharmaceutical industry wrongdoing — not just bad behavior, like charging too much for drugs or investing millions in the U.S. electoral process to keep Republican allies in control of the House, but activities that transgress the law.

Haven’t we reached a point where the industry should no longer be considered to have a legitimate voice on policy matters — whether reimportation of drugs from Canada, FDA regulation, trade policy related to pharmaceuticals, or otherwise?

Dr. Peter Rost, the former Pfizer executive who gained prominence in the United States by speaking out in favor of reimportation, has just published a new book, The Whistleblower: Confessions of a Healthcare Hitman (Softskull Press). (The title is misleading, but it’s quite a good read nonetheless.) In one chapter, Rost lists some of the recent legal trouble of the industry. The Alliance for Human Research Protection prepared this abridged version of Rost’s list:

2001: “TAP-Astra Zeneca Pay Over a Billion Dollar in Fines” — re: criminal marketing of Lupron.

2002: Pfizer paid $49 million to settle state and federal Medicaid fraud charges involving Lipitor.

2002: Schering-Plough signed a FDA consent decree and paid a $500 million fine — the biggest in FDA history — for violating manufacturing standards.

2004: Schering-Plough paid $345 million to resolve criminal and civil liabilities for illegal marketing of Calritin.

2004: Pfizer admitted criminal marketing of Neurontin, agreeing to pay $420 million.

2003: Bayer pled guilty to violating the federal Prescription Drug Marketing Act, paying $257 million including a criminal fine for its marketing of Cipro.

2004: Merck withdrew its lethal painkiller, Vioxx. Estimates are that it would cost the company $50 billion.

2004: The IRS served Merck with a “preliminary notice of deficiency” that could lead to $2.04 billion payment for back taxes.

2003: GlaxoSmithKline shareholders questioned GSK CEO, Jean-Pierre Garnier, about his pay package to which he responded: “I am not Mother Teresa.” GlaxoSmithKline also ran afoul of the IRS — it is facing a demand for $7.8 billion in backdated taxes and interest.

2003: GSK signed a corporate integrity agreement and paid $88 million in a civil fine for overcharging Medicaid for the antidepressant, Paxil and nasal-allergy spray, Flonase.

2004: New York State Attorney General slapped GSK with fraudulent marketing of Paxil — the company settled and posted its previously concealed pediatric clinical trial data.

2005: the Justice Department announced that GSK had paid “over $150 million to resolve allegations of violations to the False Claims Act through fraudulent drug pricing and marketing.”

2004: Bristol-Myers Squibb was ordered by the Securities and Exchange Commission to pay $150 million to settle charges of inflating its revenue by $1.5 billion in 2000 and 2001. A separate criminal investigation by the U.S. Attorney General’s Office in NJ resulted in the indictment of two executives for securities fraud — the company agreed to pay $300 million to shareholders.

2000: Wyeth signed an FDA Consent Decree and paid $30 million for failing to comply with Good Manufacturing Practice.

1997: after pulling Pondimin and Redux off the market because of heart valve damage, Wyeth was forced to set aside $21.1 billion to settle “fen-phen” liability cases.

2005: Serono Laboratories (Switzerland) agreed to pay $704 million to resolve criminal and civil charges in connection with the marketing of Serostim, an AIDS drug. The company also pled guilty to marketing conspiracy.

2005: Eli Lilly pled guilty and paid $36 million for its illegal marketing of Evista for off-label uses.