Drug Money

October 22, 2001
By

How PhRMA’s front groups buy elections

By Merrill Goozner

WHO ARE THOSE GUYS? Connecticut voters can be forgiven for asking themselves that question after being inundated with radio and television spots sponsored by two senior-citizen groups that few had heard of before. The ads tout the Republican-backed Medicare prescription-drug bill that narrowly passed the U.S. House of Representatives in June and go on to lavishly praise two Republican House incumbents — Nancy Johnson and Robert Simmons — who voted in favor of the drug-industry-backed bill. Not coincidentally, both incumbents face strong Democratic candidates in extremely tight races that could determine which party controls the House next January. Also not coincidentally, many of the ads, which will run right up to Election Day, were bought and paid for by the pharmaceutical industry.

Not that you’d know that from the ads. The tag lines credit two organizations with senior-friendly sounding names: United Seniors Association and the 60 Plus Association. Neither of those groups has anywhere near the resources necessary to run the spots. Based on a sampling of the media buys, it now appears that United Seniors have launched a $ 12 million ad blitz in at least 16 states, which is more than twice the size of the campaign United Seniors officially announced in early September. It’s also three times the size of the campaign that the Pharmaceutical Research and Manufacturers of America (PhRMA) bankrolled through United Seniors this past spring, when the bill was up for passage. The media buy in Hartford alone will exceed a million dollars.

Yet the two organizations combined did not bring in that much money last year, according to Internal Revenue Service records. And most of what they did raise was spent on mass mailings to keep checks rolling in from conservative seniors who can be appealed to with calls to eliminate the estate tax and privatize Social Security. So where did the money for the current campaign come from? Well, 60 Plus claims its smaller radio ad budget was self-financed but PhRMA confirms it gave “educational grants” to both United Seniors and 60 Plus. Jeffrey Trewhitt, a spokesman for the industry’s main lobbying arm, refused to discuss either the size or the purpose of the grants, other than to say that they were “unrestricted.”

So who are those guys? The predecessor group to United Seniors was launched in the late 1980s by right-wing direct-mail guru Richard Viguerie as a scheme to bolster his faltering enterprise. It failed. The current group emerged from a reorganization orchestrated by J. Curtis Herge, whose legal career traces its roots to Richard Nixon’s law firm and wound through Ronald Reagan’s transition team. After that, Herge ended up as an assistant general counsel in James Watts’ Interior Department. Herge also helped incorporate the 60 Plus association in 1992.

That same year, United Seniors earned the rebuke of the House Ways and Means Subcommittee on Social Security when one of United Seniors’ mailings alleged, “All the Social Security trust fund money is gone,” according to a July report issued by Public Citizen, the watchdog group founded by Ralph Nader. In the late 1990s, United Seniors got into hot water again — this time with its Republican friends — after one of its cash appeals alleged, “You may not ever be able to use personal funds to pay for your health care if you are eligible for Medicare.” “It was a serious mistake to use the kind of statements contained in this letter that only resulted in scaring seniors,” Sen. William Roth (R-Del.) complained.

In its latest incarnation as the main conduit for PhRMA’s surrogate ads, United Seniors has been run for the past year and a halfby 52-year-old Charles Jarvis. He previously worked with Herge at the Department of the Interior and later served as chairman of Gary Bauer’s presidential campaign and vice president of Bauer’s Focus on the Family. An independent political action committee, United Seniors PAC, has recently run afoul of the Federal Elections Commission for failing to disclose the names and occupations of many of its contributors.

The smaller 60 Plus Association, which is handling the radio spots, is run by James Martin, a retired Marine whose postmilitary career includes stints at the National Conservative Political Action Committee and Americans Against Union Control of Government. He claims to have given President George W. Bush his first job out of college: working on a Florida Senate campaign. The 60 Plus 10th anniversary bash, scheduled for early October, was to have featured Karl Rove, President Bush’s chief political operative, as its keynote speaker, but he bowed out because of scheduling conflicts.

The ads themselves are textbook examples of candidate-promoting issue spots that obfuscate the underlying issues. The House-passed industry bill would actually cost seniors nearly half of the first $ 2,000 of their drug bills and provide nothing for the next $ 1,800 of bills before it finally pays for catastrophic coverage. The drug industry was particularly enamored with the law (which it helped write after donating $ 30 million to a Republican fundraiser, according to a report from the Center for Responsive Politics, a research group that tracks campaign financing) because it put the insurance industry in charge of senior citizen drug policy. The drug industry prefers dealing with HMOs — the devil it knows — over a government-run program that might one day rule that some of the latest copycat and patent-extending drugs coming out of industry labs aren’t worth taxpayers’ (or seniors’) money. Yet the ads describe the House bill as “meaningful prescription drug coverage . . . for all seniors” before going on to mention the local congressman who voted for the bill at least three times. One Connecticut television ad, for instance, concludes with a screen calling for voters to “Support Congresswoman Johnson’s plan to add prescription-drug coverage to Medicare.”

Johnson is facing off against Jim Maloney, a popular Democratic incumbent. The two were thrown into a face-off after Connecticut lost a seat through redistricting. Simmons, who is running for re-election for the first time, faces a strong challenge from former Democratic state Sen. Joe Courtney.

It’s not surprising that PhRMA uses groups such as United Seniors as fronts. The drug industry’s faltering image took an extra whack in Connecticut after Pfizer Inc. took tens of millions of dollars in free land and tax breaks and destroyed a neighborhood in downtown New London to build a new research facility. A front-page story in The Wall Street Journal in early September documented how dozens of local businesses and institutions lost millions of dollars investing in schemes tied to redevelopment plans that never materialized.

To maintain appearances as an official lobbying group for seniors instead of an arm of the National Republican Congressional Committee or the drug industry, Jarvis insists that the ad campaign’s targets were chosen to bolster the pending bill’s chances of passage in the Senate. “I chose people who were very good in the debate and who worked very hard,” he said. “I’m not interested in any races. These are people who can talk to senators who might have some influence.” Yet a list of United Seniors’ 20 targeted districts reads more like a swing-seat election-night checklist.

MERRILL GOOZNER, a professor of business journalism at New York University and a Kaiser Media fellow, is writing a book about the pharmaceutical industry.From The American Prospect

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