Riveting Lecture Reveals Election Finance Reform Mess

Congressional reform advocate Lawrence Lessig this week delivered a powerful lecture in the nation's capital showing that control of elections by the wealthy is vastly greater than commonly understood.

Cato_Lessig_Lesterland_0275.JPGJust 159 wealthy U.S. donors provided as much presidential funding as all small donors combined, according to 2008 statistics that Lessig cited as the most recent available. Lessig, a Harvard Law School professor, argued that this small pool of donors essentially decides who is eligible to run for president on the major parties.

Lessig, who disclosed that his given name is the now-unpopular "Lester," said the effect of current campaign funding is as if the entire United States were ruled in a renamed "Lester-land" by a few people each carrying that name and strongly felt agendas. Lessig, shown at left at the podium, spoke as part of a forum presented by the Cato Institute, Campaign Finance after Citizens United: What Happened? What Now?

Other speakers from both major political parties included Robert Bauer, general counsel for the Obama 2012 campaign, and Federal Election Commission member Dan McGahn, a Republican appointed by President George W. Bush. 

I strongly recommend you watch the three-hour video archived by C-SPAN, especially the Lessig segment that began the second panel. "Every time I follow Larry I'm reminded I'm not Mick Jagger," commented the next speaker, John Samples, director of Cato's Center for Representative Government. In the C-SPAN photo at right, Samples is seated. Bauer is at the podium.

Panelists repeatedly stressed that genuine reform of the troubled system is difficult, in part because "reform" efforts often create new problems. Samples, for example, was among the speakers who argued that a Constitutional amendment to overturn the Citizens United decision would be both unlikely and unwise. The Suporeme Court ruled in 2010 that Congress may not prohibit spending on political speech by corporations. Samples noted that the ruling allowed the advocacy group Citizens United to promote a movie opposing the political career of Hillary Clinton, which he described as political speech that should be allowed. 

Among Lessig's insights was his comment that corruption in campaign finance is so widespread that members of the Senate and House encourage donations by stalling on taking action to solve the nation's problems. Such stalling tactics as temporary or delayed legislation, he said, create a necessity for lobbyists to keep spending money. Examples of such temporary fixes abound in current tax and budget negotations, as noted in a Washington Post column excerpted below.

For a complete list of speakers, visit the Cato Institute's forum site, Citizens United: What Happened? What Now? See below for excerpts of relevant commentaries and news articles.

Contact the author Andrew Kreig or comment



Related News Coverage

C-SPAN / Cato Institute, Citizens United: What Happened? What Now? Featuring John Samples, Cato Institute; Robert Bauer, Perkins Coie; Bradley Smith, Capital University School of Law; Ray LaRaja, University of Massachusetts, Amherst; Michael Malbin, Campaign Finance Institute; Don McGahn, Federal Election Commission; and Lawrence Lessig, left, of Harvard Law School.

C-SPAN, Campaign Finance after Citizens United: What Happened? What Now?Jan. 23, 2013. (Video: 3 hours.) Three years ago the United States Supreme Court handed down its decision in Citizens United. Later, lower courts followed Citizens United in deciding SpeechNow v. Federal Election Commission, the legal foundation for Super PACs. The nation has now experienced mid-term and president elections governed by these decisions. This conference will examine the consequences of Citizens United. Did anything change? Our experts will then turn toward the future and ask what policies should be enacted (or not) in light of experience and Supreme Court doctrine.

Other Elections and Political News

Huffington Post, The Supreme Court's War on the Twentieth Century, Bruce Ackerman, Jan. 31, 2013. Is the Supreme Court about to declare war on the twentieth century? This is the larger question raised by an escalating series of decisions, starting with the recent Obamacare case. In designing its sweeping reform, Congress relied on 70 years of case-law, emerging from the New Deal, that upheld its sweeping regulatory authority under the commerce clause. Yet Chief Justice Roberts, as well as four other conservatives, dramatically challenged this basic element of the New Deal settlement. While Roberts made a last minute doctrinal swerve on another issue to uphold the statute, this should not blind us to the dangers that lie ahead. While his act of statesmanship prevented a head-on confrontation between the presidency and the Court, the conservative majority has issued a fundamental challenge to a basic premise of twentieth century constitutionalism. A similar challenge will arise this year as the Court weighs the fate of the Voting Rights Act. "We Shall Overcome," Lyndon Johnson famously declared in introducing the legislation to Congress in 1965. But it took more than this rhetorical gesture to transform the dreams of Martin Luther King into the law of the land. Johnson had to win the support of a broad bipartisan coalition, including Republican leaders like Everett Dirksen, for a Voting Rights Act that would actually generate real-world results when so many previous statutes had failed. Their success of 1965 has been repeatedly reaffirmed by the political branches -- most recently, when President Bush renewed the law for 25 years after it was passed 390 to 33 in the House and unanimously in the Senate. Nevertheless, the Court's conservative five-judge majority may well strike down key statutory provisions as unconstitutional.

Bill Moyers & Company,  U.S. Rep. Peter Welch on Amgen’s Sweet Senate Deal, Bill Moyers, Jan. 25, 2013. A recent article in The New York Times reported on a cost-control exception provided to Amgen, the world’s largest biotechnology firm. According to the report, the sweetheart deal — hidden in the Senate’s final “fiscal cliff” bill — will cost taxpayers half a billion dollars. Bill talks to U.S. Representative Peter Welch (D-VT) about the bi-partisan bill he recently sponsored to repeal that giveaway, and the political factors that allow such crony capitalism to occur. “When there is this back room dealing that comes at enormous expense to taxpayers and enormous benefit to a private, well-connected, for-profit company, we’ve got to call it out,” Welch tells Bill. “Those members of Congress who are concerned about the institution, about our lack of credibility, about the necessity of us doing things that are in the public good as opposed to private gain, we’ve got to call it out.

Huffington Post, What The 2012 Election Would Look Like Under The Republicans' Vote-Rigging Plan, Aaron Bycoffe and Andrei Scheinkman, Jan. 25, 2013. Republicans have a new strategy for 2016: Change the rules of presidential elections in order to swing the Electoral College in the GOP's favor. On Wednesday, Virginia's Republican-controlled legislature became one of the first to advance a bill that would allocate electoral votes by congressional district. Last week, Republican National Committee Chairman Reince Priebus endorsed pushing through similar proposals in other states with Republican legislative majorities. The strategy would have states alter the way they translate individual votes into electors -- thereby giving Republican candidates an advantage. Had the 2012 election been apportioned in every state according to these new Republican plans, Romney would have led Obama by at least 11 electoral votes. See also, Washington Post, GOP is pushing electoral changes, Nia-Malika Henderson and Errin Haines, Jan. 24, 2013.

OpEdNews, Senator's Denial of News Story Reflects Deep Resistance to "Chained-CPI" Social Security Cut, Richard (RJ) Eskow, Jan. 25, 2013. Here's an "Washington insider" story that could affect every family in the country. Congressional newspaper The Hill reported today that Sen. Chuck Schumer was considering using a special parliamentary maneuver to push a budget deal. But this wasn't just another "inside baseball" story, the kind that fascinates policy wonks and bores all other living beings. This story included an explosive paragraph which seemed to suggest that Schumer, the Senate's #3 Democrat, was interested in a deal that included the "chained-CPI" cut to Social Security benefits. It also included cryptic language about "Medicare reform," words that are often used as Beltway code for raising the eligibility age or other drastic benefit reductions to that program. While the "chained CPI" is often pitched as a "technical adjustment" or "a more accurate say to measure cost-of-living increases," it's neither. The formula is less accurate and less fair than today's already-inadequate formula for calculating expenses for people on Social Security, and would result in a 3 percent benefit cut for the average senior (considerably more for those who live longer).

OpEdNews, Three Strategies to Block the Gerrymandering of the Electoral College, John Nichols, Jan. 26, 2013. As Republican National Committee chairman Reince Priebus promotes one of the most blatant assaults on democracy in modern times -- a scheme to gerrymander the Electoral College so that the loser of the popular vote could win key states and the presidency -- the number-one question from frustrated citizens is: What can we do about it? After so many assaults on voting rights and the electoral process itself have been advanced, it is easy to imagine that Priebus, Karl Rove and their team could get away even with so audacious an initiative as the rigging of presidential elections. Priebus is counting on precisely that cynicism, as well as the neglect of the story by major media, to enable the plan to have Republican legislatures and governors in key swing states -- Florida, Michigan, Ohio, Pennsylvania, Virginia and Wisconsin -- arrange for the distribution of electoral votes not to winners of the popular vote statewide but to the winners of individual congressional districts. Because of the gerrymandering of congressional district lines, the scheme would in 2012 have shifted the circumstance so that, in Pennsylvania for instance, the losing candidate, Republican Mitt Romney, would have won the overwhelming majority of the state's electoral votes.

Palm Beach Post, Boca Raton database pioneer Hank Asher dead at 61, Jeff Ostrowski, Jan. 11, 2013. Hank Asher, an entrepreneur who pioneered the use of databases and spent millions of his fortune fighting child pornography, died this week. He was 61. Officials at TLO, Asher’s Boca Raton company, said he “died peacefully in his home” Friday. “He was a wonderful human being who, through his philanthropy, saved thousands of children,” said former Florida Attorney General Bob Butterworth, who worked for Asher for a time. Asher’s database work also led to the arrests of the Beltway snipers who killed 10 people in the Washington area in 2002.

FireDogLake, Election Rigging Plotted on ABC’s Scandal: The Real Life Backstory, Sheila Parks, Jan. 24, 2013. In a flashback scene on last Thursday night’s (1/17/2013) episode of ABC’s searing political drama Scandal, a cabal of five voted to rig the upcoming presidential election to ensure that their man “Fitz” won. The personal agendas of four of them were revealed to viewers. Ultimately, Hollis – the gang leader – made a call to a computer wiz he knew and told him “It’s a go!” Was a recent episode of scandal based on real events? Who is the nerd that Hollis called to rig the election? Could the character be based on the late Michael Connell, the hard-right-anti-abortion-true-believer, who many allege handed George W. Bush the 2004 election by rigging in Ohio?  I think so.  As a national expert on election rigging, I have evaluated what we know and I believe we can trace how Connell fixed the Ohio election through computers in Chattanooga, Tennessee, via a company called SMARTech. Connell was Karl Rove’s high tech operative.  He died, suspiciously perhaps, in a small airplane crash.  Like the characters in Scandal, he also had a personal agenda. He viewed abortion as murder and wanted an anti-abortion president. In fictional Scandal, the election was rigged via the touchscreen electronic voting machines in Defiance, Ohio; we saw this earlier in the “Defiance” episode. Thursday night, in the flashback, viewers learned that the vote in three counties in Ohio — Defiance, Franklin and Summit — could cause Fitz to lose Ohio.  In the real-life 2004 presidential election in Ohio, Franklin and Summit went to Kerry; Defiance went to Bush. In real life, Richard Hayes Phillips a scholar and the author of Witness to a Crime: A Citizens Audit of an American Election, provides a detailed report about what happened in thirteen counties in Ohio in the 2004 presidential election where there was evidence of fraud.

Crooks & Liars, Maddow Slams Reid for Failing on Filibuster Reform: 60 is the New 60, Heather, Jan. 25, 2013. Rachel Maddow took viewers through the litany of statements made by Senate Majority Leader Harry Reid about the need to reform the filibuster rules to prevent the Republican minority from forcing 60 votes on every single bill, but as she noted, what ended up passing this Thursday was nothing that anyone could consider any type of meaningful reform. About the only issue I'd take with Rachel's reporting on the subject is that I'm not sure if it's fair to lay all of the blame at Reid's feet, or if it's what I believe is a more likely scenario, which is that he'd have gladly signed onto the reforms himself if he thought he had the votes within his own caucus, which he did not. If that is the case, I'd like to know which Senators he was dealing with that refused to go along with stopping the unprecedented obstruction we've seen from the Republicans since Barack Obama was elected president.

Washington Post, Can Obama’s second term make good on his first? Ezra Klein, Jan. 25, 2013. President Obama begins his second term confronting a familiar and frustrating incongruity: the gap between how much he has changed and how little about the country seems different. A partial accounting of Obama’s first term reveals more accomplishments than most presidents secure in two. But analysts agree that Washington is holding the recovery back. House Republicans’ strategy of forcing a seemingly endless series of cliffs, ceilings, sequesters and potential shutdowns has cast a pall over the economy. Every business that considers expanding confronts another potentially disastrous political showdown in the weeks, or months, ahead. Each high-wire conflict gives business a reason to pause rather than invest. If Washington would simply stop threatening the recovery — forget actually making it better! — the economy would probably look a lot better in four years than it does now.

Huffington Post, Obama Labor Board Recess Appointments Are Unconstitutional, Federal Court Rules, Sam Hananel, Jan. 25, 2013. In an embarrassing setback for President Barack Obama, a federal appeals court panel ruled that he violated the Constitution in making recess appointments last year, a decision that would effectively curtail a president's ability to bypass the Senate to fill administration vacancies. A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit said that Obama did not have the power to make three recess appointments last year to the National Labor Relations Board because the Senate was officially in session – and not in recess – at the time. If the decision stands, it could invalidate hundreds of board decisions.

Consortium News/ OpEdNews, What to Make of Barack Obama? Robert Parry, Jan. 22, 2013. American progressives tend to have two conflicting views of President Barack Obama: one that he had good intentions but inherited a poisonous mess from George W. Bush and then faced partisan, even racist obstructionism, or two that he was always a phony with a great smile who turned out to be "worse than Bush." Of course, there is much middle ground in assessments of Obama among progressives as from other political perspectives, but some prominent critics on the Left have opted for the latter point of view and berate anyone who takes the more forgiving position as an Obama "apologist."

Rightwing Watch, Klayman: 'Revolution' Needed to Bring Down 'Black-Muslim' Obama, Brian Tashman, Jan. 7, 2013. In his latest WorldNetDaily column, Larry Klayman calls for a literal revolution to overthrow President Obama that mirrors the American Revolution against King George III. Klayman, the founder of Judicial Watch, claims in his column “Revolution!” that the recent fiscal cliff deal, the “moral decay that has swept the nation” and the unsuccessful birther legal challenges to Obama’s eligibility (among other reasons) provide a rationale to topple the “black-Muslim, anti-white, anti-Semitic and anti-Christian ‘Manchurian candidate’ fraudster socialist tyrant in the Oval Office.” “I am currently in a deep contemplative mood on how to try to do this peacefully without resort to violence,” Klayman writes, “The Founding Fathers, however, ultimately concluded that peaceful means were not possible.”

Martin H. Bosworth, ChoicePoint-FBI Deal Raises New Privacy Questions, May 16, 2006,  While the NSA's practice of collecting billions of telephone records drew outrage in many quarters, another potential threat to individual privacy flew smoothly under the public radar -- the lucrative extension of a contract between the Federal Bureau of Investigation and notorious data broker ChoicePoint. Last month, the FBI awarded a five-year, $12 million contract for ChoicePoint to improve the agency's software systems for investigation and analysis. The deal was sharply criticized by Sen. Patrick Leahy (D-Vt.), who called the Alpharetta, GA-based information seller "the poster child for lax security." Leahy was referring to the infamous data breach of ChoicePoint's records by a ring of Nigerian identity thieves, leading to the theft of information on nearly 150,000 people. The theft sparked public awareness of the relationship between data brokers and identity theft, and led to several convictions and a $15 million fine for ChoicePoint by the Federal Trade Commission (FTC). Attorney General Alberto Gonzales defended the FBI-ChoicePoint deal, saying that the contract was for technology and hardware, not data services. "Obviously, there were mistakes made by ChoicePoint, and they suffered the consequences for that," he said. FBI Director Robert Mueller said the deal was absolutely necessary in order to upgrade the FBI's outdated information technology infrastructure and systems.

Catching Our Attention on other Justice, Media & Integrity Issues

FireDogLake, Drones Are a Local Issue, David Swanson, Jan. 31, 2013. I write from Charlottesville, Va., but am hopeful that this message applies to your city, town, or county as well. In the absence of state or federal laws, localities around the United States are proceeding to put unmanned aerial vehicles in our skies as they see fit.  The federal government has authorized the flight of 30,000 drones, and the use of drones up to 400 feet by police departments, at least 300 of which already have surveillance drones in operation. States and localities can ban or regulate such actions. Or they can proceed to endanger our health and our civil rights.

New York Times, Ex-Officer for C.I.A. Sentenced to 30 Months in Leak Case, Michael S. Schmidt, Jan. 25, 2013. The first Central Intelligence Agency officer to face prison for disclosing classified information, was sentenced on Friday to 30 months in prison by a judge at the federal courthouse here. The judge, Leonie M. Brinkema, said that in approving the sentence, she would respect the terms of a plea agreement between the former C.I.A. agent, John C. Kiriakou, and prosecutors, but “I think 30 months is way too light.” The judge said “this is not a case of a whistle-blower.” She went on to describe the damage that Mr. Kiriakou had created for the intelligence agency and an agent whose cover was disclosed by Mr. Kiriakou.

The Cool Justice Report / Litchfield County Times, What is up with judge bribery case in Badaracco homicide? Andy Thibault, Jan. 29, 2013. Judges, bribery, buried cars, grand jury; the twisted tale of Mary Badaracco's murder and since then: The Mary Badaracco homicide case is like a riddle jumbled in a hall of mirrors. The mirrors are usually foggy, with a rare burst of light and clarity. All that’s missing is the White Rabbit. The case began in earnest six years too late. Over the next 22½ years it generated some hope for justice, only to fall apart. One has to wonder whether all cylinders of Connecticut law enforcement were ever operating in concert.  [ "Cool Justice" by Andy Thibault, right, is a column popularized by his book, Law & Justice In Everyday Life.]  

OpEdNews, Empire Project Failing in Syria Says French Foreign Minister, Michael Collins, Jan. 27, 2013. The survival of the Syrian government represents a major failure of the empire project to recolonize and dominate energy-rich Middle Eastern and North

Associated Press / Mississippi Business Journal, U.S. Supreme Court weighing appeal of Scruggs, Minor, AP Staff, Jan. 24, 2013. The U.S. Supreme Court will hold a conference Feb. 15 to decide on whether to hear an appeal from Zach Scruggs, who was implicated as having knowledge of a judicial corruption scheme that toppled his father, plaintiffs’ lawyer Richard “Dickie” Scruggs. The conference will also make a decision in the case of former attorney Paul Minor, who was also found guilty of judicial corruption. In Zach Scruggs’ case, court officials say a decision could be announced shortly after the conference. The 5th U.S. Circuit Court of Appeals in New Orleans upheld Scruggs conviction last October. The younger Scruggs, a law partner with his father, pleaded guilty to failing to report a conspiracy to improperly influence a judge in a dispute with other lawyers over $26.5 million in legal fees. He served a 14-month prison sentence and also lost his law license. Richard Scruggs and three others were convicted in the bribery scheme. Minor has asked the nation’s high court to overturn his sentence in a Mississippi judicial corruption case. Court officials say a decision could also be announced shortly after the conference. The 5th U.S. Circuit Court of Appeals last August upheld the sentences of Minor and former judges Wes Teel and John Whitfield. Prosecutors said Minor backed loans for the judges in exchange for favorable court rulings. In court documents, Minor has argued prosecutors didn’t prove he received something in return for guaranteeing loans for Teel, a Chancery Court judge, and Whitfield, a Circuit Court judge.

Nieman Journalism Lab, Newsonomics, The Tribune’s Metro Agony, Ken Doctor, Jan. 24, 2013.  Soon, the next act of the Tribune newspaper agonies will play out. That’s agonies, as in a Biblical passion play. The Tribune papers have endured a special kind of agony, the Hell of Zell, but really their story is the story of metro newspapers throughout the U.S. and now largely across the developed world. It’s a moment that will mark another major passage in American newspapering, and one that reopens big questions about the fate of metro dailies in American life.  The Tribune Company owns eight newspapers, six of them metros. Two — the Los Angeles Times and Chicago Tribune — are in top 10 of U.S. dailies; five — adding in the Orlando Sentinel, South Florida Sun-Sentinel, and Baltimore Sun — are in the top 40, while the Hartford Courant ranks 60th. Their likely sale will be the single largest sale of metro newspapers in the U.S. since McClatchy bought Knight-Ridder in 2006. (That sale included the Philadelphia Inquirer, Philadelphia Daily News, San Jose Mercury News, Miami Herald, Kansas City Star, Fort Worth Star-Telegram, Saint Paul Pioneer Press, Charlotte Observer and Akron Beacon Journal.)

Massachusetts Lawyers Weekly, The Swartz suicide and the sick culture of the DOJ, Harvey A. Silverglate, Jan. 23, 2013. The ill-considered prosecution leading to the suicide of computer prodigy Aaron Swartz is the most recent in a long line of abusive prosecutions coming out of the U.S. Attorney’s Office in Boston, representing a disastrous culture shift. It sadly reflects what’s happened to the federal criminal courts, not only in Massachusetts but across the country. It’s difficult for lawyers to step back and view the larger picture of the unflattering system from which we derive our status and our living. But we have an ethical obligation to criticize the legal system when warranted. Who else, after all, knows as much about where the proverbial bodies are buried and is in as good a position to tell truth to power as members of the independent bar? Yet the palpable injustices flowing regularly out of the federal criminal courts have by and large escaped the critical scrutiny of the lawyers who are in the best position to say something. And judges tend not to recognize what to outsiders are serious flaws, because the system touts itself as the best and fairest in the world. Since the mid-1980s, a proliferation of vague and overlapping federal criminal statutes has given federal prosecutors the ability to indict, and convict, virtually anyone unfortunate enough to come within their sights.

Black Agenda Report, FCC Opens Rulemaking Process To Lower Price of Prison Phone Calls, Bruce A. Dixon, Jan. 16, 2013. The families of millions of federal, state and local prisoners have been viciously squeezed by the legal collusion of long distance phone companies with jailers from the Federal Bureau of Prisons down to state departments of corrections and local sheriffs. Federal regs require phone companies to deliver cheap local phone service, with a locality usually defined as the telephone exchange, the first three digits after the area code. Rates for calls outside an exchange however, were classified as “long distance,” and not subject to rate controls. Phone companies made deals with jailers for exclusive access to their prisons and jails in return for lucrative one time kickbacks or a percentage of the gross, along with the occasional campaign or charitable contribution. For the jailers and phone companies it was a classic win-win situation in which everybody at the table got over, except of course prisoners and their families. Researchers attempting to gather information on the actual rates across the country have often been met with non-cooperation on the part of state and local officials reluctant to divulge their manifestly corrupt deals which have constructed this onerous toll booth blocking communication between prisoners and their families. Ten years ago a grandmother filed a petition with the FCC noting that a five minute call with her grandson cost $18. In the decade since agitation and organizing across the country has finally moved the Federal Communication to take the first tentative step to remedy the problem. On December 28, 2012, the FCC finally issued a "Notice of Proposed Rulemaking,” the beginning of the period in which it assembles information and takes public comment prior to the issuance of new rules.

Cato Institute, On Benghazi, the Buck Stops with Hillary,  Malou Innocent, Jan.  23, 2013. Secretary of State Hillary Clinton will face the wrong questions when she testifies today on the September 11, 2012, terrorist attack in Benghazi. The buck stops with Secretary Clinton—and it should. But members of Congress will focus on politically charged and distracting issues. The terrorist attack on the consulate was abhorrent. However, a broader discussion about the NATO-led regime change in Libya—and its unfolding political aftermath in Mali—would be a better use of Congress’s time. The consequences of intervention should not be ignored, and its antecedents must be explored.

Associated Press / Mississippi Business Journal, U.S. Supreme Court weighing appeal of Scruggs, Minor, AP Staff, Jan. 24, 2013. The U.S. Supreme Court will hold a conference Feb. 15 to decide on whether to hear an appeal from Zach Scruggs, who was implicated as having knowledge of a judicial corruption scheme that toppled his father, plaintiffs’ lawyer Richard “Dickie” Scruggs. The conference will also make a decision in the case of former attorney Paul Minor, who was also found guilty of judicial corruption. In Zach Scruggs’ case, court officials say a decision could be announced shortly after the conference. The 5th U.S. Circuit Court of Appeals in New Orleans upheld Scruggs conviction last October. The younger Scruggs, a law partner with his father, pleaded guilty to failing to report a conspiracy to improperly influence a judge in a dispute with other lawyers over $26.5 million in legal fees. He served a 14-month prison sentence and also lost his law license. Richard Scruggs and three others were convicted in the bribery scheme. Minor has asked the nation’s high court to overturn his sentence in a Mississippi judicial corruption case. Court officials say a decision could also be announced shortly after the conference. The 5th U.S. Circuit Court of Appeals last August upheld the sentences of Minor and former judges Wes Teel and John Whitfield. Prosecutors said Minor backed loans for the judges in exchange for favorable court rulings. In court documents, Minor has argued prosecutors didn’t prove he received something in return for guaranteeing loans for Teel, a Chancery Court judge, and Whitfield, a Circuit Court judge.

Fiscal Cliff Claim: Drug-Maker Amgen Received $500 million Sweetheart Deal

New York Times, Fiscal Footnote: Big Senate Gift to Drug Maker, Eric Lipton and Kevin Sack, January 19, 2013. Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs. The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients. The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.

New York Times via Salt Lake Tribune, N.Y. Times: Amgen’s gift from Sen. Hatch, Jan. 24 2013. The following editorial appeared Wednesday in The New York Times: Supporters of the delay — notably, Sen. Max Baucus, D-Mont., who leads the Senate Finance Committee, and Orrin Hatch of Utah, the ranking Republican on that committee — say it is needed to give the Medicare system and dialysis providers time to absorb other complicated changes in federal reimbursements for kidney care. But there is good reason to suspect other factors were involved as well. Both senators have political and financial ties to Amgen, as does Mitch McConnell, the Senate minority leader, who exerted great influence over the fiscal negotiations and praised the Medicare provisions. A top aide to Hatch, who was involved in negotiating the dialysis delay, previously worked as a health policy analyst for Amgen. The current lobbyists for Amgen include former chiefs of staff for both Baucus and McConnell. And the three senators have received substantial contributions from Amgen’s employees and its political action committee since 2007 — almost $68,000 to Baucus, $59,000 to Hatch and $73,000 to McConnell. Amgen’s strong influence prevailed even though it had pleaded guilty just weeks ago to marketing an anti-anemia drug illegally and agreed to pay criminal and civil penalties of $762 million, a record settlement for a biotechnology company. This dreadful episode is a classic example of the power of special interests to shape legislation and shows how hard it may be to carry out the reforms needed to cut health care costs.

Amgen, Amgen Response to Recent New York Times Stories and an Editorial That Are Based on Misunderstanding of the Facts, Jan. 29, 2013. Amgen is disappointed by recent reporting by the New York Times. Through its misunderstanding of important key facts, the Times has done a disservice to dialysis patients, who are among our nation’s most chronically ill, representing disproportionately high numbers of minority and elderly patients.  In its original story “Fiscal Footnote: Big Senate Gift To Drug Maker,” a more recent editorial, and then another story “What the Small Player Can Expect When Using a Lobbyist”, the paper has taken an important Medicare provision in recent legislation out of context.

Huffington Post, Orrin Hatch Defends Costly Amgen Provision In Fiscal Cliff Deal, Ryan Grim and Paul Blumenthal, Feb. 2, 2013. Utah Sen. Orrin Hatch angrily defended the inclusion of a controversial provision in the fiscal cliff deal that will pay major dividends to a single biopharmaceutical company, Amgen. The top Republican on the Senate Finance Committee, Hatch teamed with panel chairman Max Baucus (D-Mont.) to include a host of tax extenders, credits and other provisions that added billions to the price tag of the bipartisan bargain.

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