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.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

http://www.reason.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Final Proof Of Undeniable Corruption, Immorality, and Greed of The American Political Class

Most of us have long suspected that the American political class had devolved to a state where personal political careers and wealth have now taken precedence over the good of the country, relative to most of our politicians. Rather than truly addressing and resolving issues in the right way for the right reasons, seems many of our politicians would prefer to take the cowardly approach and do nothing or do the wrong thing for the country rather than endanger their re-election and personal enrichment efforts.

We have reported on these situations many times in the past in this blog:

- In our September 1, 2011 post we reported on a analysis by two university professors of the historic stock market returns of Washington politicians' personal portfolios. Seems that both Democrats and Republicans serving in Congress, but especially Democrats, have historically outperformed the stock market's overall returns with their own stock portfolios. The study analyzed results over decades across hundreds of different politicians so the sample size is more than ample to draw conclusions from.

Given that these same politicians have not outperformed in any other facet of their jobs, it becomes suspicious that they would do so well in this area of personal enrichment vs. the rest of America's investors, i.e. you and me and professional investors. At that time, we raised the distinct possibility of insider trading of Congressional politicians because of their outstanding stock market performances. Coincidence or corruption?

- In our October 4, 2011 post, we reviewed a few of Senator Majority Leader Harry Reid's documented investment strategies over the past few years. According to John Ransom, writing for Townhall.com on September 30, 2011, in 2008, one month before oil prices took a historical plunge, the good Senator sold between $15,000 and $50,000 worth of energy stock holdings he held in the Dow Jones Energy index.

Shortly thereafter, he purchased between $15,000 and $50,000 worth of health care holdings in the Dow Jones Health Care Index, at a time when he was considering rewriting the nation's health care laws. Coincidence or corruption?

- Also from our October 4, 2011 post, consider the shenanigans of Congresswoman Ginny Brown-Waite. According to an article that was written by John Frank for the June 30, 2009 St. Petersburg Times.ne day before the House of Representatives approved a massive bank bailout plan in October, 2008, the Congresswoman bought stock in Citigroup, one of the major banks that received a significant portion of the bank bailout funding.


About two weeks later, on the day Treasurer Henry Paulson announced he would invest $250 billion of taxpayer money in nine major banks, the Congresswoman bought stock in Bank of America, one of those nine banks. Coincidence or corruption?


- On November 11, 2011, Money News reported on accusations that at about dozen lawmakers and their senior aides bragged about how much money they had earned in the stock market based on insider trading-like information that they knew ahead of the general public because of their government positions.


The article included the following details:

• The insider trading dollar amounts ranged from a few thousand dollars to six figures.
• Much of the insider trading involved companies that were likely to be brought before Congress for investigations, an act that usually resulted in a negative impact on a company's stock price. By shorting a stock ahead of that information being public, Congressional figures could and did make out sized profits.
• The huge profits were being made by people that had no serious background or past history of success in picking winners and losers in the stock market.

Coincidence or corruption? I think most honest Americans would conclude that all of these incidents are examples of political class corruption, immorality, and greed.


Now, some in the political class would claim that this last piece of corruption information cannot be trusted because it was made by Jack Abramoff, a former lobbyists who was convicted of corruption himself and who has served time in jail.


I would usually agree with such a stand but not this time. First, if anyone should know about corruption, it should be Abramoff since he was the king of corrupt special interests years ago. Second, a recent story that appeared on the CBS show "60 Minutes" not only verifies that this type of behavior exists but went so much further in explaining how and who was deeply involved in the corruption. (You can see the entire,unabridged  "60 Minutes" story at
http://lonelyconservative.com/2011/11/nancy-pelosis-insider-trading/)


According to the "60 Minutes" report, almost everyone in the country is subject to insider trading laws and compliance. This includes ordinary Americans, anyone serving in the executive branch of the Federal government (e.g. the President, the Vice President, etc.), and Federal judges. The only people excluded from having to comply are...members of Congress, the same people who wrote and passed the laws on insider trading that exclude themselves from being prosecuted for such actions.

Just when you think you have heard every conceivable sin, shortcoming, and outright immorality from our politicians, you come across this travesty. They have cleared the decks for themselves to make grand sums of money in the stock market by using insider government trading information.

Examples from "60 Minutes" included the following:

• John Boehner, currently the Speaker of the House, made a serious investment in health care insurance stocks shortly before he led the legislative effort to defeat a key component in Obama's original health care reform bill, a component that would have depressed health care stock prices if not defeated. With the component's defeat, health care insurance stocks rose and made money for Mr. Boehner. Coincidence or corruption?
• Several years ago, then Speaker of the House Dennis Hasert, made some land acquisitions in Ohio. He then worked to adjust Federal highway projects so that a new Federally-financed highway would run close to his newly purchased land, significantly increasing the land's value when he sold it.
• Congressman Spencer Bachus also seemed to do pretty well with insider information. The "60 Minutes" story was apparently inspired by a recently published book, "Throw Them All Out," written by Hoover Institute fellow Peter Schweizer. According to Schweizer, Bachus and Nancy Pelosi got secret briefings from Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson, who basically told the legislators that it was "a matter of days before there is a meltdown in the global financial system.”  Bachus went out shortly thereafter and invested about $7,000 to short the stock market. When the stock market did start to collapse, he was able to cash in the investment for almost twice what he originally put out just a few days before. He also shorted General Electric four times after Paulsen told him GE bond sales were having problems. Coincidence or corruption?

Terrible, terrible, immoral behavior. Which brings us to our favorite member of the political class, Nancy Pelosi. According to the story, Nancy Pelosi, former Speaker of the House, and her husband had access to at least eight IPO offerings over the past few years. As most of you know, we ordinary Americans rarely get in on a ground floor, the most lucrative financial time, in any IPO offerings.

The most troubling and potentially corrupt IPO was for the Visa IPO back in 2008. Ms. Pelosi purchased 5,000 IPO shares on the first day of the Visa offering at $44 a share. She sold it within days when the price had reached $64 a share, a profit of about $100,000.

What makes this so very troubling is prior to the Visa IPO offering there was a legislative effort within the House of Representatives to impose credit card fee limits on companies such as Visa. Obviously, if such legislation passed, it would certainly put a damper on Visa's stock price, and would depress the earnings and gains of anyone who invested in the Visa IPO.

That legislation was mysteriously never able to see the light of day prior to the IPO date. The legislation eventually did become law but the driver and leader in the legislation was the Senate, not the House, and passage happened well after people like then- Speaker of the House Pelosi had made their substantial gains off of the IPO offering. Coincidence or corruption?

I really do not know what to say. No more proof is necessary to finally declare that we have allowed a privileged, spoiled, selfish, and, because of the insider trading disaster, an immoral set of people to take control of the country for their own benefit and personal enrichment. Immoral, I cannot come up with any better word to describe this insider trading insult to the American taxpayer and citizen.

And the sad thing is that they do not see anything wrong with this immoral behavior. When the "60 Minutes" reporter, Steve Croft, asked Ms. Pelosi about her IPO behavior at one of her press conferences, her answer was both incoherent and bordering on indignant that someone could even imply she ever had a conflict of interest.

In press releases from her office later that day, she attacked the writer of the book, "Throw Them All Out," as being a discredited conservative.  In other words, she attacked the person and not his information or his process. The "60 Minutes" report showed how the writer and eight of his aides had meticulously gone through official financial records to ensure the book's accusations were accurate. She also accused CBS and "60 Minutes" of a "right wing smear," failing to mention in her press releases that the story also illustrated the same type of immoral behavior of several Republicans.

Ms. Pelosi did not refute that she had participated in the Visa IPO or had made a ton of money in the process. She did not refute that she had participated in many other IPOs while in a powerful position in government, Speaker of the House. She did not refute the fact that she had received highly sensitive and highly valuable advance information from Bernanke and Paulsen. She did not refute the fact that Congress had exempted her and her comrades from the very laws that every other American had to abide by. She tried to turn it into a political issue and attack the person, the messenger.

Obviously, three actions have to take place to fix this immorality:

1. Short term, we need to force Congressional members to make themselves subject to the same insider trading laws as the rest of us.
2. We need to tighten up information sources within government so that pending government actions are kept as secret as possible, as compared to the situation today (as referenced at the end of the "60 Minutes story) so that no one, either inside the Beltway or outside, gets sensitve and valuable insider information.
3. And the most important action is to implement Step 39 from "Love My Country, Loathe My Government" which calls for the Constitutional establishment of term limits for all Federal politicians, "one and done." There is no other way to deal with this immorality, the current set of politicians in Washington do not deserve to serve any longer, given the rampant corruption we constantly see.

When Pelosi became Speaker of the House in 2007, she boldly declared that she and the Democrats were going to "drain the swamp" of corruption in Congress, Instead, it looks like she and her peers in Congress built a dam and the corruption is as deep as ever. "One and done," it cannot happen soon enough.

One additional note: According to a recent blurb in Roll Call, and published the November 18, 2011 issue of The Week Magazine, the 500 or so members of Congress had a collective net worth of more than $2 billion, a whopping 25% increase over their collective wealth in 2008. The 50 richest lawmakers account for 80% of the wealth and the median net worth is about $513,000.

How many ordinary Americans do you know who made a 25% return in their personal portfolios in the past two years? Why wouldn't the 50 richest lawmakers serve their country for no salary and no benefits since they obviously can afford to serve, without suffering financial distress, if they did not collect salary or benefits. Wouldn't that be the moral, courageous thing to do.



Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available, at http://www.loathemygovernment.com .It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respectfreedom for both yourselves and others everyday.


Please visit the following sites for freedom:


http://www.loathemygovernment.com/
http://www.cato.org/
http://www.robertringer.com/
http://realpolichick.blogspot.com/
http://www.flipcongress2010.com/
http://www.reason.com/
http://www.repealamendment.com/

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