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‘Soft Money’ Links Regulators’ Interests to Companies

During the 2002 midterm elections, television icon Art Linkletter, of “Kids Say the Darndest Things” fame, informed the public, in 30 second-spots, that their congressperson “has been fighting for real prescription drug coverage.”

These ads ran in 19 congressional districts where the incumbent faced stiff opposition. These $12 million ads were sponsored by a so-called grass-roots organization called the United Seniors Association, which received most of its funds from pharmaceutical companies.

Because the ads said nothing about whom to vote for, but rather, instructed the viewer to “call” their representative and encourage them to “keep standing up for America,” no campaigning laws were broken. The “soft money” used in this case of “sham issue advertising” was deemed as unregulated political donations.

Soft-money expenditures such as these have risen from $86 million during the 1992 presidential election to $495 million for the 2000 presidential election, negatively affecting the general public.

Why? Because the corporation captures the lawmakers, transforming the regulator-and-regulated relationship to something more symbiotic by tying together their interests.

Although laws exist to prevent corporations from unfairly influencing future elective officials, there are sufficient loopholes in the law to make such regulations impotent. Take for example the pharmaceutical industry, representative of how most other corporate and special-interest groups subvert the democratic process.

The United States is the only industrial country in the world that does not regulate the price of medicine. To keep it this way, top executives of Bristol-Myers Squibb, one of the nation’s largest pharmaceutical firms, pressured its mangers to donate $1,000 in their own name and an additional $1,000 in their spouse’s name to the Bush campaign during the 2000 presidential election. Failure to do so meant they were reported to the company’s chief executive.

Even though election laws bar such coercion, the pharmaceutical industry succeeded in transforming an industry bitterly fighting a proposal to control the rising prices of medicine during the Clinton years, to a friendlier White House under Bush.

In 2003, Congress passed legislation that allows only private health plans to deliver Medicare prescription-drug benefits, thus achieving the industry’s ultimate goal of preventing Medicare from directly negotiating steep discounts on the prices of medicine.

If such negotiations are administered by separate private health groups, then the industry need not fear volume discounts that come with the clout of negotiating for Medicare’s 40 million beneficiaries. If instead the government were allowed to negotiate the price its beneficiaries are to pay for medicine, the cost of medicine would substantially drop. Nevertheless, since the new regulations bar Medicare from any form of negotiation, we can expect higher costs for medicine.

Obtaining the pharmaceutical support for candidates that in turn would give the drug companies what they wanted was brazenly simple.

Jim Nicholson, then chairperson of the Republican National Committee, wrote an April 9, 1999, letter to Bristol-Myers CEO Charles A. Heimbold, stating: “We must keep the lines of communication open if we want to continue passing legislation that will benefit your industry‚Ķ. Your expertise in health care and involvement in Republican politics are of great benefit to me, and I would like to get your opinion on what we have proposed‚Ķ. I welcome any suggestions you may have on how we can make it an even stronger plan.”

The lines of communication were indeed kept open at a tune of $2 million for the 2000 election. In fact, the entire pharmaceutical industry contributed $26.9 million during the 2002 mid-term elections, a substantial increase in campaign contributions if we consider that in 1990, the industry gave only $3.2 million.

During the mid-1980s I served as chairperson of a Political Action Committee (PAC). My job involved traveling to the state and national capitol to relay our organization’s positions on specific legislation, as well as identifying and supporting candidates sympathetic to our interests.

It was very common to “hedge one’s bets” by giving monies to both candidates. Regardless as to who won, we would be on the winning team. Our support bought us access. I always had a direct line to the representatives we supported, access which I lost when my PAC term was over.

It was common for me to hear candidates state, “Just tell me what you guys want and I’ll support it.” One candidate in particular who was running for reelection once threatened to vote against a measure we supported because he had not yet received our organization’s (financial) endorsement. I quickly stated that an oversight was made and cut a check to his re-election committee.

This is the way the system still works–and it’s all legal.

Miguel De La Torre, a self-described progressive Baptist, teaches in the religion department at Hope College in Holland, Mich. His column also appears in the Holland Sentinel.