Corporations and Public Health: Profits Before People 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 corporations  90% 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 51% 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); 17% for corporations with assets over $10 million

Reasons for Inadequate Corporate Taxation • Corporate tax breaks/loopholes • Corporate welfare • Cheating and under-payment common

Offshore tax havens shelter capital • • • Up to $32 trillion estimated (1/3 of all global wealth) $11.5 trillion in individual wealth • U.S. GDP = $16 trillion Cayman Islands: • Population 150,000 • Home to 92,000 corporations

Ugland House, Cayman Islands 18,000 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 • 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 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

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

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 – ↑Private commercial funding of university research – Undone research – Secrecy/Gag Clauses For-profit colleges growing, marked by corruption, high interest rates on loans to the un- and under-qualified

• Academics/Professional Organizations Affected 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 • American Council on Science and Health

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 • Lobbying promotes international non cooperation/isolationism

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 states 2014 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”

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

Drug Companies’ Cost Structure • • • • • Manufacturing – 35% Marketing – 27% Profits (after taxes) – 18% R and D – 13% Taxes – 7%

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

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 • $240 million dollars spent on lobbying in 2011 – 2.3 lobbyists 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

PPACA Patient 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 Overturn Citizens United Proportional representation Instant runoff voting Halt disenfranchisement, overturn voter restriction laws Vote

Solutions • Activism / Letter writing / Protesting / Whistleblowing • Work in groups • 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 – 0.9% of the total federal budget, 1.6% of the discretionary budget – Charitable giving approximately $250 billion/year (2.5% of income vs. 2.9% at height of Great Depression) Sign, ratify, and adhere to major international treaties

Solutions • • • Based on Precautionary Principle Recognize nature’s net worth Measure 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.org

[email protected]