Press Release

August 18, 2004

PAYBACKS: How the White House and Congress Are Neglecting Our Health Care Because of Their Corporate Contributors

Report Illustrates the Public Cost of
Policy Paybacks to Campaign Contributors

Contacts: Gary Zuckett, WV Citizen Action Group, 304-346-5891
Janet Fout, WV People’s Election Reform Coalition (PERC-WV), 304-522-0246
Public Campaign, www.publicampaign.org
USAction, www.usaction.org
Campaign for America ’s Future, www.ourfuture.org
Assoc. of Community Organization’s for Reform Now (ACORN), www.acorn.org

WASHINGTON , DC – Since 1999, health care related interests have contributed $162.3 million dollars to federal candidates and party committees.  Seventy-four percent of that total went to Republicans.  This is just one of the major findings in a new national report, PAYBACKS:  How the White House and Congress Are Neglecting Our Health Care Because of Their Corporate Contributors.  The study, released by Public Campaign, USAction, Campaign for America’s Future, the Association of Community Organizations for Reform Now (ACORN), and locally by WV Citizen Action (a USAction affiliate) and the WV People’s Election Reform Coalition (PERC-WV), presents four case studies illustrating how campaign contributors to the Bush administration and Congress are getting policy paybacks in the form of lax oversight, eased regulations, and blatant giveaways and how these paybacks are a detrimental to our public health. 

The report focuses on health insurance companies and HMOs; prescription drug manufacturers; meat and food processing companies; and the tobacco industry.  Each case study includes examples of how these industries get what they want out of Washington , from higher drug prices for prescription drugs to lax regulation of the meat processing industry.  The report includes pullouts on the special interest connections of Bush fundraisers and administration officials; charts showing contributions to members of Congress and actions they have taken on behalf of contributors; and charts showing the correlation of campaign contributions with votes in Congress.

“Health-care costs are skyrocketing, as is the money given by HMOs, pharmaceutical and insurance interests to our elected officials,” said Jeff Blum, Executive Director of USAction.  “This is no accident.  Policies to achieve quality, affordable health care for all won’t get the fair hearing they deserve when candidates for office, including the presidency, rely on campaign contributions from health industry executives.”

According to the PAYBACKS report, health care related interests have severely shifted their support toward the GOP since 1992.  That year, Democrats received 44% of health care related contributions, and Republicans received 56%, but since that time health care related contributions to Republicans has increased astronomically.  For example, contributions from pharmaceutical manufacturers to Republicans increased nearly 600% from 1992-2002, while contributions to Democrats increased only 79%.  Overall, pharmaceutical manufacturers have contributed $46,964,230 to members of Congress since 1999, with 23 and 77 percent going to Democrats and Republicans respectively.  The result, according to the report is higher profits for the pharmaceutical industry, which is already the most profitable in the world, and expensive and unsafe prescription drugs for the American public. 

In its case study on prescription drugs, the report uses Medicare’s new prescription drug benefit as an example of legislation that preserves lucrative profits for pharmaceutical manufacturers without sufficiently expanding access.  President Bush and Congressional supporters of the bill said it would give senior citizens, who often have the greatest need for prescription drugs, more choices and more control over their health care but consumer advocates disagree. 

Gary Zuckett, with WV Citizen Action Group said the $534 billion drug plan, offers little significant discount to seniors. “The ‘discount cards only offer a savings of 10 to 25% on prescription drug price – prices that will continue to rise. And there is nothing in the bill to keep the companies that issue the cards from raising drug prices as often, and much, as they like. What this plan really does is put greed before need. Congress and President Bush sold out America ’s seniors and people with disabilities to pharmaceutical manufacturers like Eli Lilly, Merck and Pfizer.” 

The U.S. House of Representatives passed the bill on November 21, 2004 by a vote of 220-215, and the U.S. Senate voted 54-44 in favor of the legislation. In the House, members voting in favor of the legislation received an average of $27,616 in contributions from pharmaceutical manufacturers, while member who voted against it received an average of $11,308.  Senate members voting for and against the bill received an average of $52,049 and $30,320 respectively. 

Among West Virginia’s Congressional delegation, Rep. Shelly Moore Capito, a Republican who voted for the legislation, was the top recipient of contributions from pharmaceutical manufacturers, receiving $46,500 between 1999 and 2003, according to the Center for Responsive Politics (www.opensecrets.org), which provided campaign contribution data for the PAYBACKS report.  Rep. Alan Mollohan and Rep. Nick Rahall, both Democrats, received $8,250 and $1,000 respectively.  Both voted against the bill, as did Democratic Senators Jay Rockefeller and Robert Byrd.  Senator Rockefeller received $19,700 in pharmaceutical contributions and Byrd received $4,000.

The WV-People's Election Reform Coalition, which has been tracking the sources of contributions in West Virginia since 1996, has observed similar correlations of contributions from health care related interests and votes in the state legislature, according to Janet Fout, coordinator for the group.  “Although in 2003, the legislature passed the first tax increase on cigarettes in more than 25 years, the tobacco industry has not sat by idly.  A cigarette tax was first proposed in 1997, and the tobacco companies rose to the occasion – between 1996 and 1998 tobacco contributions to members of the legislature increased 830%,” Fout said. 

According to a PERC-WV report on tobacco and the 2003 legislature, contributions from tobacco related interests continued to increase over the next two election cycles reaching record-breaking proportions in 2002.  That year, tobacco interests gave $91,601 to legislative candidates.  Overall, tobacco interests have contributed a total of $230,701 to legislative candidates since 1998. 45% of tobacco contributions came from lobbyists, 20% from retailers and wholesalers and 35% from tobacco companies and their political action committees.

“In addition to stalling the cigarette tax increase for a number of years, donations from tobacco and its distributors have halted passage of a smokeless tobacco tax and helped the industry get legislation introduced to take away the authority of local health departments to regulate smoking,” said Fout. 

According to the PERC tobacco report, there was a significant trend for the major recipients of tobacco contributions in the House to vote against the smokeless tobacco tax. Of the top twelve House recipients of tobacco contributions in 2000, only one Delegate voted for the tax. It passed by a vote of 60 to 38, with two absent. In the Senate, there was no recorded vote on the passage of the tax, however the of the eight sponsors of preemption legislation, which is intended to eliminate local health regulations to restrict smoking, six were among the top ten recipients of tobacco money in the Senate for 1998 and 2000.

“It is in everyone's best interest to reduce tobacco use,” said Fout “yet despite years of efforts by public health advocates, hundreds of thousands of Americans still die every year from the effects of smoking and the medical costs associated with treating smoking related illnesses total in the billions.  Our research on contributions to West Virginia political campaigns and reports like PAYBACKS highlight the need for comprehensive campaign finance reform at both the state and national level.”

Public Campaign and the WV People’s Election Reform Coalition (PERC-WV) are advocates for Clean Money/Clean Elections campaign finance reform, which is already law in five states—Arizona, Maine, North Carolina, New Mexico, and Vermont. Candidates who agree to abide by strict spending limits and to raise no private money can qualify for full and public financing for their campaigns. In Arizona , candidates who ran “clean” in the 2002 election now hold nine out of eleven statewide elected offices, including the governor, secretary of state, attorney general and treasurer.

Arizona Governor Janet Napolitano, is the first governor in the nation to take office without financial ties to special interest groups.  And thirty-two out of ninety members (36%) of the Arizona legislature were elected using the Clean Elections system. In Maine , 77% of the senate and 55% of the house ran “clean.” Overall, 53% of Maine and Arizona 's elected officials who took office in 2003 participated in the voluntary Clean Elections system. 

More and more states are following Maine and Arizona 's lead and considering versions of the Clean Elections concept.  This year at least eight states including West Virginia , had Clean Elections legislation introduced in their state legislatures, and similar legislation has been introduced in Congress. 

In Maine and Arizona , there are already signs that Clean Elections is giving lawmakers freedom to enact significant health care reforms.  For example, on the day she was sworn into office, Arizona Governor Janet Napolitano issued an executive order establishing low-cost prescription drug subsidies for seniors.  In 2001, Maine overcame corporate opposition to pass a successful plan for universal health care. While Congress was passing the Medicare prescription drug bill, Maine was putting the finishing touches on Maine Rx+, a program that enables all but the wealthiest families in Maine to buy any drug on the Medicaid list for the Medicaid price.

“In many ways, Clean Elections reform is the reform that makes other reforms possible by returning our political process to a system where elected officials are beholden to citizens not special interests,” said Gary Zuckett of Citizen Action. “While it will never take all the private money out of the process, Clean Elections show that it is possible to reduce the influence of special interests and pass health care reforms that are in the public interest.”

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Public Campaign (www.publicampaign.org) is a nonprofit, nonpartisan organization dedicated to sweeping reform that aims to dramatically reduce the role of big special interest money in American politics.

The West Virginia People’s Election Reform Coalition is a joint project of the Ohio Valley Environmental Coalition (www.ohvec.org), West Virginia Citizen Action Group (www.wvcag.org) and Mountain State Research and Education Foundation.  PERC-WV’s primary mission is to focus attention on how special interests influence our democratic institutions in West Virginia .  PERC-WV underscores problems and proposed solutions based on its research.