Corporate Control of Public Health:Case Studies and Call to Action

Martin Donohoe

Am I Stoned?

A 1999 Utah anti-drug pamphlet warns:“Danger signs that your child may

be smoking marijuana include excessive preoccupation with social causes, race relations, and environmental issues”

Corporations Dominate the Global Economy

Almost 6 million corporations90% of transnational corporations

headquartered in Northern Hemisphere

500 companies control 70% of world trade

Corporations Dominate the Global Economy

• 53 of the world’s 100 largest economies are private corporations; 47 are countries

–Wal-Mart is larger than Israel and Greece

The Stock Market

• The top 1% of Americans owns 35% of all stocks, bonds, and mutual fund assets

• Consequences of Differential Stock Ownership–Corporations are answerable to their

shareholders–Governments are answerable (at least in

theory) to their citizens (either through elections or revolutions)

Corporations

• Internalize profits– $2.1 trillion (2013)

• Externalize health and environmental costs

Corporate Taxation

• Corporations shouldered over 30% of the nation’s tax burden in 1950 vs. 8% today• Nearly 1/3 of all large U.S.

corporations pay no annual tax

Corporate Taxation

• Big business claims that U.S. corporations pay the highest corporate taxes in the world (35%)

• FALSE: The rate actually paid, after foreign governments get their cuts, money sent to foreign subsidiaries, loopholes, etc. = 2.3% (U.S. Treasury Department)

Reasons for Inadequate Corporate Taxation

• Corporate tax breaks/loopholes

• Corporate welfare

• Cheating and under-payment common

• Offshore tax havens shelter capital

Ugland House, Cayman Islands18,000 Corporations Registered Here

Job Creators?

Corporate Taxation

• 2004: Bush administration offered temporary tax holiday on foreign earnings–$300 billion in profit repatriated• 92% went to dividend payouts, stock

buybacks, and corporate coffers• Only 8% went to R and D, new factories,

and hiring

Exorbitant CEO Pay

• The average CEO makes 331X the salary of the average U.S. worker (1960 - 41X)–Mexico 45:1–Britain 25:1– Japan 10:1–US Military: 20:1 (top rank : lowest rank)–US ratio of average CEO to minimum wage

worker = 774:1

Exorbitant CEO Pay

• Median U.S. CEO salary (for S and P 500 corporations) = $11.7 million (2014)

• CEO salaries up 937% since 1978–Average worker pay up 10%

Exorbitant CEO Pay

• The average CEO makes 250-400X the salary of the average U.S. worker (1960 - 41X)–Mexico 45:1–Britain 25:1– Japan 10:1–US Military: 20:1 (top rank : lowest rank)

The Mega-Rich

• Worried / Investing in personal security– Bodyguards– Armored cars– Bullet-proof windows; machine gun proof doors– Home security fogs– Panic rooms– Fully-stocked home medical suites– Yachts with escape submarines– Islands

Corporate PR Tactics

• Advertising– “The art of convincing people to spend money

they don't have for something they don't need.“ (Will Rogers)

• Astroturf - artificially-created grassroots coalitions

• Corporate front groups• Corporate espionage: spying, bribes

Corporate PR tactics

• Invoke poor people as beneficiaries• Characterize opposition as “technophobic,”

anti-science,” and “against progress”• Portray their products as environmentally

beneficial despite evidence to the contrary• Host all-expense paid educational seminars

for federal judges

Public Relations

• $200 billion industry

• PR flacks now outnumber journalists

Greenwash

• Public relations / ad campaigns–BP invests $100 million annually in

clean energy = amt. it spends annually to market itself as moving “Beyond Petroleum”

Sponsored Environmental Education Materials (Examples)

International Paper-“Clearcutting promotes growth of trees that require full sunlight and allows efficient site preparation for the next crop”

Exxon’s “Energy Cube”-“Gasoline is simply solar power hidden in decayed matter”-“Offshore drilling creates reefs for fish”

Sponsored Environmental Education Materials (Examples)

• American Coal Foundation’s “Power from Coal”:– “The earth could benefit rather than be

harmed from increased carbon dioxide.”

Academics/Professional Organizations Affected

• Increasing corporatization of academia–For-profit schools–Charter schools–Educational corporations

Academics/Professional Organizations Affected

–↑Private commercial funding of university research• Front-end domination and rear-end

repression affect research agenda, dissemination of knowledge• Undone science• Secrecy/gag clauses

Academics/Professional Organizations Affected

• For-profit colleges growing, marked by corruption, high interest rates on loans to the un- and under-qualified–Benefit largely from taxpayer money

• Dramatic decrease in tenured faculty, rise in administrators

• Gagging of researchers at federal agencies demoralizing, can affect recruitment of quality scientists

Union of Concerned Scientists (2015)

The Media

• 5 corporations control majority of US media (down from 50 in 1983)

• Extensive corporate-media links

Global Warming: Controversial?

• Of 928 articles in peer-reviewed scientific journals, none were in doubt as to the existence or cause of global warming

• Of 636 articles in the popular press (NY Times, Washington Post, LA Times, WSJ), 53% expressed doubt as to the existence (and primary cause) of global warming

Science 2004;306:1686-7(Study covers 1993-2003)

Lobbying

• Approximately 40,000 lobbyists (11,781 full-time)

• Estimates of return on lobbying range from $28 to $100 for every $1 spent

Lobbying

• Federal lobbying groups spent $3.2 billion in 2014

• All single issue ideological groups combined (e.g., pro-choice, anti-abortion, feminist and consumer organizations, senior citizens, etc.) spent well under $100 million

Top-Spending Industries, 2014

• Pharmaceutical industry - $230 million• Business Associations - $163 million• Insurance industry - $151 million• Oil and gas industry - $141 million• Computers/Internet - $140 million• Electric utilities - $122 million

Campaign Cash and Lobbying

• Citizens United• McCutcheon v. Federal Election

Commission

• Lobbying promotes international non-cooperation/isolationism

Case Studies

The alliance between GE Medical Systems and NY-Presbyterian

Hospital

General Electric

• Ranked by Forbes as world’s largest company (based on equal weighting of sales, profits, assets, and market value)

• 2014 revenues of $149 billion–Close to the GDP of more than 2/3 of U.N.

member states2014 net after-tax profits of $15.2 billion

• Majority from overseas operations

General Electric

• Makes household appliances, lighting, and medical equipment–Plastics division, which produced

bisphenol A, spun off in 2008

• Produces jet engines and military hardware

General Electric

• Charles Wilson (CEO of GE pre- and post-WW II; helped oversee U.S. military production during WW II):– “The revulsion against war…will be an almost

insuperable obstacle for us to overcome. For that reason, I am convinced that we must begin now to set the machinery in motion for a permanent wartime economy.”

General Electric

• Has built 91 nuclear power plants in 11 countries (including the troubled Fukushima Daishi plants in Japan)–Including 23 plants at 11 sites in U.S.• e.g., Hanford

–¼ of GE’s US reactors found to be defective

General Electric

• Operates coal-burning power plants–Major releasers of toxic mercury

• Produces nearly 40 technologies used in fracking–Increasing investments in fracking

General Electric

• Operates a large financial services group– Responsible for over 50% of company’s profits in

recent years– 2015: company plans to sell off majority of GE

Capital (now Syncrhony Financial) over next 2 years

– Under investigation by the Justice Department for over potential bankruptcy violations

General Electric

• Until recently, owned 49% of a multi-billion dollar media empire–Including NBC, Telemundo, and

Universal Studios–Comcast owned 51%; bought out GE in

2013

GE’s History

• Conducted unethical human subject experiments on prisoners, involving testicular irradiation, from 1940s to 1960s

• Intentionally-released excessive radiation from its Hanford, WA nuclear reactor in the 1980s, to determine how far it would travel

GE’s Record

• Sued radiologist who brought to light dangers of GE’s contrast agent, Omniscan– Causes nephrogenic systemic fibrosis (FDA black

box warning)

• Ordered to pay $11.4 million to Bracco Diagnositcs for falsely/misleadingly claiming that its x-ray contrast agent Visipaque was superior to BD’s Isovue

GE’s Record

• America’s largest corporate polluter

• 116 Superfund sites nationwide

• Approximately 13 in NY

GE’s Record

• Between 1947 and 1977, two of its capacitor manufacturing plants dumped at least 1.3 million pounds of PCBs into the Hudson River–Probable human carcinogens with adverse

effects on liver, kidney, nervous system, and reproductive organs (EPA)–200 mi of Hudson = Superfund site

GE’s Record

• Eliminated 34,000 US jobs between 2000 and 2010

• Added 25,000 overseas jobs over same period–One of nation’s top out-sourcers of

jobs

GE’s Record

• Cited by Human Rights Watch for “systematic workers’ rights violations” in the U.S. and abroad

• Extensive record of tax violations, military procurement fraud

GE CEO Jeffrey Immelt

• 2014 total compensation = $37.2 million (up from $25.8 million in 2013)

• Named “World’s Best CEO” in 3 separate Barron’s polls

• 2006 - 2011 - On Board of NY Federal Reserve Bank

GE CEO Jeffrey Immelt

• 2008 – Named one of the “100 Most Influential People in the World” by TIME Magazine

• 2009 - Appointed by President Obama to his Economic Recovery Board– GE then became eligible, via a loophole, for ¼ of

the $340 billion Temporary Liquidity Guarantee Program (debt support)

GE CEO Jeffrey Immelt

• 2011 - Appointed by Obama as Chair of his outside panel of Economic Advisors and of his Council on Jobs and Competitiveness

• On the board of directors of “The Robin Hood Foundation”!

GE’s Record

• Named “America’s Most Admired Company” by Forbes• Named one of the “World’s Most

Respected Companies” in polls conducted by Barron’s and The Financial Times

Concerns About the Agreement between GE Medical Systems and NY-Presbyterian Hospital

(2003)

• Provides GE with financial incentives to promote high technology purchases

• Hospital prohibited from purchasing more effective equipment from other companies

Concerns About the Agreement

• Augments trend in academic medical centers to promote the use of expensive, high-technology care at expense of preventive care and public health measures–Highly reimbursable– Services may be redundant in certain

locations

Concerns About the Agreement

• Patients with developmental anomalies and cancers caused by GE’s pollution diagnosed with GE scanners and treated with GE-manufactured therapeutic devices, increasing GE’s profit

A macabre twist on “cradle to grave care”

The American Council on Science and Health• Corporate Front Group• Promulgates unsound science• Pro-corporate agenda• Major media presence–Medical director spent time in federal

prison for Medicaid fraud, perjury, and obstruction of justice

• Threatened to sue me, Medscape over allegations in article on global warming

WHO Tobacco Treaty

• U.S. attempted to undermine treaty through Bush administration appointees with strong ties to tobacco industry

Medical Technologies Industry

• Successful lobbying effort against Medicare physician payment policies relevant to unproven imaging studies

• Whole body CT scans (scams)

Drug TestingDrug Testing

• 2011: Florida Governor Rick Scott (R) issues executive order requiring drug tests on current state workers and new applicants

• 2011: Scott signs bill requiring drug tests for TANF program–positive test allows parent to choose

another individual to receive benefits on behalf of children –Aid recipients responsible for cost of tests

Drug TestingDrug Testing

• Florida Governor Rick Scott– Former CEO of Columbia/HCA– Fired after presiding over massive Medicare

fraud that cost corporation $1.7 billion federal fine– Then set up Solantic (FL chain of emergency

care clinics); transferred ownership to his wife upon entering statehouse• Solantic is in the drug-testing business!

Corporate Agribusiness

• Successful campaign against Oregon’s Proposition 27 (labeling of GM foods)

• Lobbying for pre-emptive labeling laws re GMOs, rBGH

Corporate Agribusiness

• Supports spread of GMOs to developing world

• Keeps GM seeds from non-corporate academic researchers

• Promoting agriculture bills which provide large subsidies to large industrial farms

Prison-Industrial Complex

• Construction and management of prisons

• Providing (substandard) health care to inmates

Health Insurance Industry

• Dubious practices:–Delisting–Cherry picking–Pre-existing conditions

• Often lower quality of care• High administrative costs–15-30% (vs. 2-3% for Medicare and

Medicaid)

Health Insurance Industry

• Large profit margins

• Loyalty: shareholders (not patients)

• Corruption

Medical Care

• Sponsor luxury care consortiums, clinics• Facilitate medical tourism• Participation in “medical transfer

market” (facilitates medical repatriations of undocumented immigrants - e.g., MexCare)

Corporate Agreements with Medical Associations

• AAP – Abbott Nutrition (manufacturers of Similac)

• AAP – Babies “R” Us• AAFP – Coca Cola, Inc.• AMA – Sunbeam

• AMA – sells access to Physician Masterfile

Pharmaceutical Industry

• Limited innovation–90% of new drugs little or no better

than existing agents (“me too drugs”) and only 1% offer improved care for life-threatening conditions• Improved somewhat recently

Drug Companies’ Cost Structure

• Manufacturing – 35%• Marketing – 27%• Profits (after taxes) – 18%• R and D – 13%• Taxes – 7%

Pharmaceutical Industry

• Influence over physicians through control of CME, gifts, research funding–Over $3.7 billion to at about 366,000

physicians and 900 teaching hospitals in 2014 (excluding research funding)–Physician Payments Sunshine Act –

reporting requirements

Pharmaceutical Industry

• Conduct seeding trials to alter prescribing patterns

• Secrecy, statistical torturing of data sets, selective publication

• Data mining of prescribing practices• Unethical trials in developing world• Poor compliance with Clinical Trials Registry

rules

Drug Company Malfeasance

• The pharmaceutical industry is the biggest defrauder of the federal government, as determined by payments made for violations of the federal False Claims Act (FCA)–Accounted for 25% of all FCA payouts

between 2000 and 2010–Defense industry – 11%

Pharmaceutical Industry

• Avoided $7 billion in US taxes in 2012 by shifting profits overseas

• $230 million dollars spent on lobbying in 2014–2.3 lobbyisits for every member of Congress–Revolving door between legislators,

lobbyists, executives and government officials

Pharmaceutical Industry

• Effectively lobbied and threatened trade sanctions against developing countries in order to prevent production and importation of much cheaper, generic versions of life-saving anti-AIDS drugs

• Patent extensions• Promotion of agricultural antibiotic

overuse

PPACAPatient Protection and Affordability Care Act

• Career arc of Elizabeth Fowler (architect of plan):– VP for Public Policy and External Affairs (informal

lobbying) at WellPoint (nation’s largest insurer)– Chief health policy counsel to Senator Max Baucus

(who drafted legislation)– Head of Global Health Policy at pharmaceutical

giant Johnson and Johnson

Other Areas of Corporate Malfeasance

• Military-industrial complex• Energy and chemicals industry• Law enforcement/prison-industrial

complex• Payday loan industry• Genetically-modified crops/biopharming• Breast milk substitutes

Solutions

• Restructure tax system• Improve regulation of banks (e.g., enforce Dodd

Frank law)• Punish corporate scofflaws with large fines and jail

time– Hide no Harm Act (pending in Senate) would hold

corporate officers criminally accountable if they knowingly concealed serious dangers that led to consumer or worker deaths or injuries

Solutions

• Increase enforcement budgets to combat corporate crime

• Eliminate confidential legal settlements and confidential business information relevant to public health and safety

• Eliminate mandatory binding arbitration clauses

Solutions

• Living wage laws• Work with corporations–Benefit corporations–Healthy PR–Shareholder activism–Risks/benefits

Solutions: Fair, Representative Elections

• Publicly financed campaigns and campaign finance reform

• Open debates, free air time for candidates• Proportional representation• Instant runoff voting/cumulative voting/range

(rating) voting• Halt disenfranchisement, overturn voter

restriction laws

Solutions: Vote

US voter turnout lowWealthy vote at almost twice rate of

poorWhites > Blacks > HispanicsOld > YoungProperty owners > RentersPhysicians < general population

Voter Turnout

Solutions• Activism / Letter writing /

Protesting / Whistleblowing• Join community groups – become

involved in local as well as national issues• Lobby legislators• Run for office

Solutions

• Increase funding of public education

• Independent scientific review of school curricula

• Prohibit use of sponsored curricula

Solutions

• Establish safeguards re corporate involvement in academic research

• Higher standards of journalism

• Support alternative media

Solutions

• Augment and improve international aid package

• Sign, ratify, and adhere to major international treaties

Solutions

• Based on Precautionary Principle• Recognize nature’s net worth• Calculate prosperity based on Genuine

Progress Index or Global Happiness Index, rather than Gross Domestic Product

• “All men are created equal”–Declaration of Independence

• “Some people are more equal than others”–George Orwell

Voltaire

“The comfort of the rich rests upon an abundance of the poor”

Hudson River, 2009

Primo Levi

“A country is considered the more civilized the more the wisdom and efficiency of its laws hinder a weak man from becoming too weak or a powerful one too powerful.”

Günter Grass

“The first job of a citizen is to keep your mouth open.”

African Proverb

If you think you are too small to have an impact, try going to bed with a mosquito in your tent

Contact Information and References

Public Health and Social Justice Website

http://www.publichealthandsocialjustice.org

http://www.phsj.orgmartindonohoe@phsj.org