[Congressional Record Volume 150, Number 77 (Friday, June 4, 2004)]
[Extensions of Remarks]
[Pages E1038-E1040]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DEMOCRACY ON DRUGS
______
HON. FORTNEY PETE STARK
of california
in the house of representatives
Thursday, June 3, 2004
Mr. STARK. Mr. Speaker, I rise to draw my colleagues' attention to a
new report by Common Cause, ``Democracy on Drugs, The Medicare
Prescription Drug Bill: A Study on How Government Shouldn't Work.''
This report does a very good job of highlighting the egregious methods
used to gain passage of the Medicare prescription drug legislation. I
encourage each of you to review this report to remind yourselves how
democracy was trampled in the passage of the Medicare prescription drug
law.
The Medicare/Prescription Drug Bill: A Study in How Government
Shouldn't Work
Democracy on Drugs
(A report by Common Cause)
Introduction
Our Constitution reflects the over-arching concern of the
Founding Fathers that the rights of the minority be jealously
preserved and protected, even in the presence of a strong
majority. From start to finish, the $535 billion Medicare
bill passed by Congress and signed by President Bush late
last year has been a study in shutting out opposing voices
and suppressing the flow of vital information.
This Common Cause report chronicles a series of incidents,
large and small, that add up to a consistent effort by the
Administration and Congressional leadership to bypass or
undermine the rules and laws that are in place to ensure that
our government works in an open and accountable manner and
that all voices are heard on critical public policy issues.
The Medicare bill (see appendix) is the product of a
process that included:
Charges of bribery, delayed votes, inappropriate cabinet
member lobbying and censoring of C-SPAN cameras.
The Administration misleading Congress by withholding its
own cost estimates for the prescription drug legislation--
estimates that greatly exceeded what the President was
telling the public. A career civil servant being threatened
with his job if he told Congress the truth.
Congressional Members excluded from the House-Senate
conference committee that finalized the bill. Only a
``coalition of the willing'' was invited to participate.
A principal author of the bill was forced to step down as
head of a powerful House committee after it was reported that
he was negotiating a $2 million a year lobbying job with the
drug industry while he was moving the proposal through his
committee. And a key Administration official involved in
pushing the legislation was also offered lucrative private
sector healthcare jobs.
The drug industry showered Congress with campaign
contributions and spent millions of dollars on highly paid
lobbyists who swarmed Capitol Hill while the bill was being
considered.
A propaganda campaign waged by the Department of Health and
Human Services. The Administration paid people to pose as
journalists in television segments that praised the benefits
of the new Medicare law, and spent tens of millions of
dollars on a campaign promoting the new program.
Charges of Bribery on the House Floor
At the break of dawn on Nov. 22, 2003, Representative Nick
Smith (R-MI) was about to cast his vote against a Medicare/
prescription drug bill so flawed and controversial that the
Republican House leadership held the vote open for three
hours while they pressured their own Republican colleagues to
vote for the bill. Votes in the House typically are open
for 15 minutes.
Strong-arming Members of the House to vote with the
leadership is routine business, but what went on in those
early morning hours appears to have slid over the line from
political pressure to outright bribery.
A Nov. 23, 2003 column written by Rep. Smith appearing on
his website reads: ``I was targeted by lobbyists and the
congressional leadership to change my vote, being a fiscal
conservative and being on record as a no vote. Secretary of
Health and Human Services Tommy Thompson and Speaker of the
House Dennis Hastert talked to me for a long time about the
bill and about why I should vote yes. Other members and
groups made
[[Page E1039]]
offers of extensive financial campaign support and
endorsements for my son Brad who is running for my seat. They
also made threats of working against Brad if I voted no.''
On Dec. 1, 2003, in a radio interview with Kevin
Vandenbroek of WKZO in Kalamazoo, Mich., Rep. Smith said:
``They started out by offering the carrot, and they know
what's important to every member, and what's important to me
is my family and my kids. And I've term-limited myself, and
so Bradley my son is running for [my congressional seat] and
so the first offer was to give him $100,000-plus for his
campaign and endorsement by national leadership. And I said
No, I'm gonna stick to my guns on what I think is right for
the constituents in my district.''
Since Rep. Smith went public with his allegations, he has
made several attempts to modify his original statement.
Speaking to David Frownfelder of the Daily Telegram in
Adrian, Mich. Rep. Smith said: ``I was told there would be
aggressive, substantial support for my son, Brad [in his race
for Congress] if I could vote yes on the bill. There were
offers of endorsements and so maybe a member [of Congress]
sitting close by said, `Boy that really could be big money.'
Tens of thousands or hundreds of thousands. But never was I
offered any exact amount of money in exchange for my vote.
Technically, in the legal description that I later reviewed
on what a bribe is, probably it didn't meet the legal
description of a bribe.''
Censoring C-SPAN
C-SPAN cameras perched above the House floor have for 25
years allowed the public to see for themselves how their
representatives are carrying on the public's business. But
the night of the vote on the prescription drug bill, the
House leadership censored the public's view of the chamber.
In an interview on the 25th anniversary of C-SPAN's
television coverage of Congress, the head of C-SPAN, Brian
Lamb, noted that the congressional leadership has always
controlled the cameras in the House and Senate chambers,
generally focused on whoever is speaking, but also panning
across the chamber to show activity on the floor. Lamb
pointed out how the leadership's control of the cameras can
subvert C-SPAN's studiously nonpartisan, objective coverage
of Congress. Lamb said: ``You saw what happened in the middle
of the night over the vote on Medicare on the floor of the
House of Representatives, when they controlled the cameras.
And I noticed that the camera wasn't moving from--it usually
moves constantly from side to side. For almost the entire two
or three hours that they had it open, the camera was showing
the Democratic side. And that's where people don't get a fair
shot.''
In other words, the Republican leadership of the House
intentionally diverted the C-SPAN cameras away from the
Republican side of the House floor. Consequently, there is no
visual record of who was talking to who that night while
votes were sought by the leadership.
HHS Secretary on the House Floor
Rep. Smith said he was pressured during the three-hour vote
by his own House leadership, but also, to his surprise, by
the Department of Health and Human Services (HHS) Secretary
Tommy Thompson, who made an unusual appearance on the House
floor that night.
While House rules allow federal department heads to be in
the House chamber, it is rare for such an official to be
lobbying for legislation being considered by the House.
According to National Journal's CongressDaily, Secretary
Thompson defended the fact that he had broken House customs
by lobbying members on the House floor during the final,
three-hour roll call vote on the Medicare reform bill. ``I
spent five months working on this bill. I think it was only
proper my being on the floor,'' Thompson said. But it appears
Thompson's activities that night were a sharp departure from
House customs.
Misleading Congress and Withholding Pivotal Information
In 1997, Rep. Bill Thomas (R-CA) added language to the
Balanced Budget Act conference report citing the importance
of access by Congress to the estimates of HHS chief actuary
(then, as now, Richard Foster). Some of that language in the
conference report reads as follows: ``It is important to
emphasize that the Senate Committee on Finance, the House
Committee on Ways and Means, and the House Committee on
Commerce all rely on their ability to seek estimates and
other technical assistance from the Chief Actuary, especially
when developing new legislation. . . . The process of
monitoring, updating and reforming the Medicare and Medicaid
programs is greatly enhanced by the free flow of actuarial
information from the Office of the Actuary to the committees
of jurisdiction in the Congress. When information is delayed
or circumscribed by the operation of an internal
Administration clearance process or the inadequacy of
actuarial resources, the Committees' ability to make informed
decisions based on the best available information is
compromised.''
Flying in the face of this statement, Foster, who has been
the chief auditor in HHS for several years, said that he was
threatened with dismissal if he released his official
estimate of the cost of the prescription drug bill. His
estimate added $156.5 billion to the estimated cost and
likely would have led to several conservative Republicans
voting against the bill.
In a public statement, Foster said: ``For many years my
office has provided technical assistance to the
administration and Congress on a nonpartisan basis. But in
June 2003, the Medicare administrator, Tom Scully, decided to
restrict the practice of our responding directly to
Congressional requests and ordered us to provide responses to
him so he could decide what to do with them. There was a
pattern of withholding information for what I perceived to be
political purposes, which I thought was inappropriate.''
Foster has said that he gave analyses in June 2003 to the
White House and the Office of Management and Budget--which
were not shared with Congress--predicting that prescription
drug benefits being drafted on Capitol Hill would cost about
$156 billion more than President Bush said he wanted to
spend. Since Congress passed the Medicare bill, the
Administration has revised its estimated 10-year cost of the
program to $534 billion. Its original estimate was $395
billion.
Foster, the government's chief analyst of Medicare costs,
says that he was warned repeatedly by his former boss, Thomas
A. Scully, the Medicare administrator for three years, that
he would be dismissed if he replied directly to legislative
requests for information about prescription drug bills
pending in Congress. In an email released by Foster, Scully's
assistant, Jeffrey Flick, instructed the actuary to answer
Republican queries regarding provisions in the Medicare bill
but was warned--in bold font--not to provide information for
Democratic requests ``with anyone else until Tom Scully
explicitly talks with you--authorizing release of
information. The consequences for insubordination are
extremely severe,'' Flick wrote in bold type. Interviews
with federal officials, including Foster and Scully, make
clear that the actuary's numbers were circulating within
the Administration, and possibly among some Republican
supporters of the bill on Capitol Hill, throughout the
second half of last year, as Congress voted on the
prescription drug bill, first in June and again in
November.
At a hearing on Feb. 10, Secretary Thompson told lawmakers
as much. Thompson said, ``we knew all along'' that the
administration's cost estimates would be higher, but said he
did not have a final figure until Dec. 24, 2003, after the
bill was already signed into law.
On April 26, the Congressional Research Service issued a
letter on the legality of Scully's decision to withhold
information from Congress. Its conclusions read in part as
follows: ``. . . actions which purposefully result in the
transmission of knowingly false information to the United
States Congress, and actions that involve the intentional and
active prevention of the communication of accurate
information to Congress in derogation of Federal law or
responsibilities, might in certain circumstances involve
activities which constitute violations of federal criminal
provisions . . . The issuance by an officer or employee in a
department or agency of the Federal Government of a `gag
order' on subordinate employees, to expressly prevent and
prohibit those employees from communicating directly with
Members or committees of Congress, would appear to violate a
specific and express prohibition of federal law.''
Conference Committee Lockout
When the House and Senate each passed their own version of
the Medicare bill, the Republican leadership at first
followed routine procedure by appointing a 17-member
conference committee to work out the differences between the
two pieces of legislation. Seven Democrats were appointed to
the committee. However, only two of those Democrats, Senators
Max Baucus (MT) and John Breaux (LA), were included in the
closed-door meetings that had actually produced the final
legislation. Why? Because they were among the few Democrats
who would not raise significant objections to the bill.
According to conference members from both parties, when the
bill was made available to the rest of the committee, they
were given just one hour to review the 678-page document
before they voted.
The ranking Democrat on the Ways and Means Committee, Rep.
Charles Rangel (NY), was among the members of the original
conference committee. However, he was excluded from the
closed-door meetings. He arrived uninvited to one meeting,
and Rep. Thomas, the conference chairman, stopped substantive
discussion of the legislation until Rep. Rangel left.
Democrats and others have complained the tactics like those
employed during the conference on the Medicare bill are
becoming more common. Similar lockouts were staged during
crucial conference committee meetings on huge energy and
transportation bills. More and more the role of the full
conference committee is perfunctory while the details of the
legislation are hammered out in closed meetings that include
only a small coterie handpicked by the party leadership.
Scully Cashes In
In December 2003, as the ink of the President's signature
was drying on the Medicare bill, Thomas A. Scully, the
government official responsible for Medicare, announced that
he was leaving the government for lucrative healthcare jobs
in the private sector. He joined Alston & Bird, a law firm
that represents hospitals, drug manufacturers and other
companies in the health care industry.
[[Page E1040]]
Scully also accepted a job with Welsh, Carson, Anderson &
Stowe, a New York investment firm specializing in
telecommunications and health care.
Surprisingly, even though federal law generally bars
presidential appointees such as Scully from discussing
possible employment with firms involved in matters handled by
those officials, Scully obtained a waiver from the HHS ethics
officer so that he could negotiate with potential
employers while he helped write the Medicare law. These
jobs did not just drop into his lap in December. He had
apparently been negotiating with healthcare-related firms
at the same time he was helping the Administration push
the controversial prescription drug legislation through
Congress, which directly affected those industries.
Apparently in response to criticism of Scully's waiver, the
White House ordered federal agencies to cease issuing ethics
waivers for senior Administration appointees that would allow
them to pursue jobs with private companies while influencing
federal policies that could affect those companies. A memo
issued on Jan. 6, 2004 by the White House Chief of Staff
stated that, effective immediately, such waivers could only
be approved by the White House.
Tauzin Negotiates PhRMA Job While Negotiating Prescription
Drug Bill
As Medicare chief Scully was job searching while also
helping pass the drug legislation, a powerful Member of
Congress was also looking for a new job.
The Pharmaceutical Research and Manufacturers Association
(PhRMA), the trade group for name-brand drug producers,
reportedly offered Representative Billy Tauzin (R-LA) the top
position at PhRMA and a compensation package that ``would be
the biggest deal given to anyone at a trade association,''
around $2 million a year, according to The Washington Post.
The offer came just two months after Rep. Tauzin helped
negotiate a $534 billion Medicare prescription drug bill
widely viewed as a boon to pharmaceutical companies, which
stand to make billions in profits while avoiding government
price restrictions.
In February 2004, Common Cause called on Tauzin to resign
his chairmanship of the powerful House Energy and Commerce
Committee, saying ``Even if your job negotiations with PhRMA
began after your work on the Medicare bill was over, as you
have reportedly said, it leaves one wondering whether you
were trying to please PhRMA and what PhRMA may have promised
you in return.''
Tauzin denied there were any dealings with industry in
exchange for his work on the bill, but he stepped down from
the chairmanship of the House Energy and Commerce Committee
in early February, while negotiations over the PhRMA lobbying
post continued. The job remains open and Tauzin may still be
eligible if it remains open at the end of his term.
Drug Industry Money Undermined the Process
As the Congressional fight on prescription drugs loomed,
the drug industry drew up plans for raising millions of
dollars to defeat efforts to reduce drug prices. The
financial stakes were huge and the industry began to spend
enormous amounts of money on campaign spending, lobbying, and
advertising to influence the outcome of the legislation.
No group epitomized this more than PhRMA. PhRMA not only
had a tremendous stake in the bill, but also turned out to be
a major winner. The law prohibits the federal government from
negotiating for lower drug prices and prohibits the
reimportation of prescription drugs that are produced in the
U.S. but sold for significantly less in other countries,
which would also bring down the price of drugs.
PhRMA increased its yearly budget 23 percent to $150
million in anticipation of the upcoming Medicare fight. While
PhRMA's interests range from international policy to local
initiatives, industry protection in the Medicare reform bill
was its top priority. According to published reports, PhRMA
planned to spend $1 million for an ``intellectual echo
chamber of economists--a standing network of economists and
thought leaders to speak against federal price control
regulations through articles and testimony, and to serve as a
rapid response team.'' Says one PhRMA document, ``Unless we
achieve enactment this year of market-based Medicare drug
coverage for seniors, the industry's vulnerability will
increase in the remainder of 2003 and in the 2004 election
year.''
PhRMA is well known as one of Washington's most powerful
lobbying forces. The trade group alone spent $16 million on
lobbying in 2003, according to federal lobby disclosure
reports filed with the Senate Office of Public Records.
Including lobbying spent by all of PhRMA's companies, the
group spent at least $72.6 million lobbying in 2003--or
roughly $135,701 per member of Congress.
PhRMA has capitalized on hiring former Members of Congress
and their staffs as part of its lobbying army. According to
reports, PhRMA lobbyists include former Reps. Vic Fazio (D-
CA), Vin Weber (D-MN) and Bill Paxon (D-NY). Other drug
industry lobbyists include David W. Beier, former domestic
policy advisor for Vice President Al Gore; Dave Larson,
former health policy advisor to Senator Bill Frist (R-TN);
and Edwin A Buckham, former chief of staff to Rep. Tom DeLay.
The industry maintains a constant presence among
policymakers. For example, in the weeks following the House
and Senate's passage of their respective Medicare bills in
June, pharmaceutical companies organized parties for
congressional staffers that worked on the legislation.
According to The Washington Post, the drug company Johnson &
Johnson planned a cocktail party near the Capitol. The
invitations read, ``in recognition of your part in the
historic passage of Medicare drug bills by both houses of
Congress . . .'' After Common Cause sent letters to Senate
conferees and House leaders stating that attendance by staff
members to the party could violate congressional ethics
rules, the leadership discouraged their staff from going and
the party was later cancelled. Congressional staff still had
the opportunity, however, to attend a ``Rooftop Rendezvous''
thrown by PhRMA and hospital trade groups.
HHS Propaganda Campaign
Once legislation passes Congress and is signed into law by
the President, it is the job of the executive branch to
implement the new law, including informing the public of the
effect or the benefits of the new law. HHS, charged with
implementing the new prescription drug law, immediately
launched a multi-million dollar campaign promoting the new
prescription drug benefit under the guise of public service
advertising.
Early this year, HHS created a TV ad designed to educate
the public on the new drug benefits, but many criticized the
ads as being political advertisements for the Administration
that mislead the public about the facts of the new program.
Adding to the concern about politicization of the
prescription drug program was a contract for $9.5 million for
producing and distributing the ads that went to a partisan
media company, National Media, Inc.
HHS has also produced videos that were sent to broadcasters
around the country touting the new program. The videos
feature hired ``reporters'' who appear to be delivering
straight news stories, but do not identify the government as
the producer. Two videos end with the voice of a woman who
says, ``In Washington, I'm Karen Ryan reporting.'' The
``reporter'' in the commercial is reading from a script
written by HHS.
The General Accounting Office (GAO) is now investigating
these `fake video news' clips. The GAO will determine if they
constitute illegal ``covert propaganda.'' Federal law
prohibits the use of federal money for ``publicity or
propaganda purposes'' not authorized by Congress.
Conclusion
Posted on Congressional websites is a document called ``How
Our Laws Are Made.'' [http://thomas.loc.gov/home/
lawsmade.toc.html]. No one really believes the process
meticulously detailed in the document is followed exactly--
legislating is a messy process. But the laws, rules and
procedures cited in the document are there to ensure that
democratic principles are not empty words in the
Constitution, but inform the way our government operates on a
daily basis.
This report has told a tale of the rush to pass a thinly
supported prescription drug bill that was a prime political
goal of the Administration. In that rush, supporters showed
disregard for the law, congressional rules, and other
procedures and customs. We must reform and strengthen some of
those laws and rules and, perhaps more importantly, those
public officials must be held accountable. Americans must be
assured that democracy is not just another word, but an
integral part of how our government operates.
____________________