Amgen: A Classic Example of Lobbying Washington At Taxpayer Expense

We have covered political class corruption many, many times in this blog. It has gotten so bad that it seems that finding, creating, and profiting from government corruption is more important to our Washington politicians than actually doing their Constitutional jobs, e.g. developing and living up to sane budgets, researching, developing, READING, and voting on legislation, etc.

Just a very small handful of political class corruption that we have covered include the following examples:

• The Obama administration gave out billions of taxpayer dollars to its crony capitalists partners and political fundraisers and donors in the alternative energy industry. All of which provided no societal benefit and many of whom went out into bankruptcy and out of business. The almost endless list of failures included Solyndra, Spectra, Beacon, Evergreen, Ecotality, A123, and many others.
• The Obama administration also gave out hundreds and hundreds of millions of dollars to its crony capitalist partners and political fundraisers and donors in the alternative transportation industry with no societal benefit in return. The major companies that received taxpayer wealth because they were Obama fundraisers for his elections include Tesla and Fisker Motors.
• Barney Frank used to be the chairman of a powerful House of Representatives committee that oversaw the financial industry. However, that did not prevent him from accepting massive reelection campaign donations from the various companies his committee was responsible for regulating along with top executives from those companies. Blatant conflicts of interest.
• Former Speaker of The House Nancy Pelosi participated in about nine company IPOs, one of which was the VISA IPO that happened after the House mysteriously postponed legislation that would have been detrimental to the company and its IPO. Within a matter of days, Ms. Pelosi, who was then responsible for scheduling the House’s legislative schedule, made a hundred thousands dollars from her IPO access.
• A number of Congressional people made investment decisions and choices shortly after being briefed by Treasury Department people in the run up to the Great Recession, trying to leverage this insider information in their personal financial portfolios before the deteriorating condition of the economy was pubic knowledge.
• Many Congressional members and members of their staffs got sweetheart mortgage deals from Countrywide Financial, one of the prime reasons for the housing and economic collapse.

We could go on and on about Washington political class corruption. However, today we will look at the latest, classic example of corporate interests being used to leverage and basically bribe politicians to get what both need, financial rewards, all at the expense to the American taxpayer.

What makes this instance of corruption classic is that it was done as part of the fiscal cliff deal, a deal that was supposed to prevent the economy from crashing on January 1, 2013. This was a very important piece of legislation, the failure of which would have caused economic harm to most Americans. However, the prideless Washington political class viewed it as just another legislative opportunity to enrich themselves and take care of their business cronies.

The details of this latest classic of political class corruption was outlined in a January 19, 2013 New York Times article:

• In early January, Amgen, which is the world’s biggest biotech company, pleaded guilty in a major Federal fraud case.
• However, that did not prevent the Washington political class from presenting the company with a belated Christmas gift, buried deep within the fiscal cliff deal.
• In that deal, Congressional members insisted on a paragraph that while it did not mention Amgen explicitly, the paragraph was very financially friendly to one of Amgen’s major drug products.
• The paragraph was inserted into Section 632 fiscal cliff final legislation and it delays a set of Medicare price restraints on a particular type of drugs.
• That category of drugs includes Sensipar, a top performing Amgen pill used for dialysis patients.
• This giveaway allows Amgen an additional two years to sell Sensipar without government price and cost controls.
• It must have been a big deal since according to the Times article, “the company’s chief executive quickly relayed it to investment analysts.”
• Good news for Amgen and its investors but bad news for Medicare since its cost for the product will not go down and save the American taxpayer up to $500 million over the next two years.
• Congressional aides were reported surprised by the inclusion of the delay since Amgen was the only company to lobby for the delay, leveraging its 74 Washington lobbyists for the effort, and this was on top of a previous two year delay that critics found unnecessary to extend another two years.
• Supporters of the delay and the legislative paragraph, mostly leaders of the Senate Finance Committee who, according to the Times, “ have long benefited from Amgen’s political largess,“ defended the action, saying it was necessary to allow regulators to prepare properly for the pricing change, even though no one expected the pricing change to be delayed and the pricing changed had already been delayed two years previously.

Okay, that is “what” happened, political cronyism results in an unneeded relief package to political donors, costing the American taxpayer about half a billion dollars. Before we get into the “how” of this disgrace, keep in mind that just before this deal was passed, Amgen pleaded guilty to marketing one of its drugs illegally. It had to pay criminal and civil penalties totaling $762 million, a record settlement for a biotechnology company. Thus, not only are the politicians dealing away taxpayer money, they are dealing it away with a company that just pleaded guilty to massive fraud.
The following summarizes the “how” of the corruption, taken right out of the lobbyists’ playbook:

• Amgen has deep historical, financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell Kentucky, and Senators Max Baucus, of Montana, and Orrin G. Hatch, of Utah. who hold serious power over Medicare payment policy as the leaders of the Finance Committee.
• Amgen also has extensive ties with the Obama administration, with its lobbyists visiting the White House more than a dozen times since 2009.
• Amgen’s employees and political action committee have donated almost nearly $5 million to political candidates and committees since 2007.
• Not surprisingly, these donations include $67,750 to Baucus and $59,000 to Hatch.
• An additional $73,000 went to McConnell, some of it at a fund-raising event for him that Amgen helped sponsor in December while the debate over the fiscal legislation was under way.
• More than $141,000 was also donated from Amgen employees to President Obama’s reelection campaigns.
• Additionally Amgen and its foundation have given hundreds of thousands of dollars in charitable contributions to powerful organizations like the Congressional Black Caucus and groups like the Utah Families Foundation, which, surprise, surprise, was founded by Senator Hatch, an organization that provides positive coverage to the Utah news media.
• Amgen has also contributed to Glacier PAC, a PAC sponsored by Baucus in Montana, and OrrinPAC, a Hatch PAC in Utah.
• When Hatch was facing difficulties in his reelection bid in 2012, group called Freedom Path paid for advertisements in Utah that attacked his opponent. The group was backed and financed by Pharmaceutical Research and Manufacturers of America, a trade group that includes, wait for it,….. Amgen.
• And finally, one of Mr. Hatch’s top Finance Committee staff members on health and Medicare policy, Dan Todd, actually worked as a health policy analyst for Amgen’s government affairs office from 2005 to 2009.

Now, all of this could have been a coincidence. The Senators and the rest of the politicians that stood by when this piece of legislation was introduced might actually be truly thinking that this was a good deal for the taxpayer…but probably not. The money goes round and round and when the music stops, the American taxpayer is the one without a seat even though we funded the whole party.

That is why two steps from “Love My Country, Loathe My Government” need to be implemented right away:

1. Step 5 would allow only individual American citizens to contribute to election campaigns. No more PAC, union, corporate, or lobbyist money could be used to bribe political figures.
2. Step 39 would impose term limits on all Federally elected officials. If you review the corruption cases over the past few years, the ones listed above and others, it is usually the longest serving politicians who are the most ingrained to the culture of corruption. Pelosi, Frank, Baucus, Hatch, etc. have been around for decades. They have not resolved any of the major issues facing American during that time so how much worse could be without them, ousted from office because of term limits.

Without these two steps, the corruption train keeps on rolling and we are not longer a government by the people and for the people, we are a government by the lobbyists for the lobbyists.

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