Corporations and Public Health: Profits Before People

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Corporations and Public HealthProfits Before
People

• Martin Donohoe

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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

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Corporations Dominate the Global Economy

• Almost 6 million corporations
• 90 of transnational corporations headquartered
  in Northern Hemisphere
• 500 companies control 70 of world trade

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Corporations Dominate the Global Economy

• 53 of the worlds 100 largest economies are
  private corporations 47 are countries
• Wal-Mart is larger than Israel and Greece

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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)

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Corporations

• Internalize profits
• 2.1 trillion (2013)
• Externalize health and environmental costs

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Corporate Taxation

• Corporations shouldered over 30 of the nations
  tax burden in 1950 vs. 8 today
• Nearly 1/3 of all large U.S. corporations pay no
  annual tax

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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

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Reasons for Inadequate Corporate Taxation

• Corporate tax breaks/loopholes
• Corporate welfare
• Cheating and under-payment common

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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

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Ugland House, Cayman Islands18,000 Corporations
Registered Here
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Job Creators?
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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

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Exorbitant CEO Pay

• Median U.S. CEO salary (for S and P 500
  corporations) 11.7 million (2014)
• CEO salaries up 997 since 1978
• Average worker pay up 11

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Exorbitant CEO Pay

• The average CEO makes 373X the salary of the
  average U.S. worker (1960 - 41X)
• Mexico 451
• Britain 251
• Japan 101
• US Military 201 (top rank lowest rank)
• US ratio of average CEO to minimum wage worker
  7741

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Minimum Wage ? Living Wage

• Federal minimum wage 7.25/hr
• 18 states and DC have higher minimum wages
  (Oregon 9.10/hr, 2014)
• 10,423/yr for full-time job
• Real value down 42 compared with 1968
• Inadequate to pay rent, buy food and clothing

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Minimum Wage ? Living Wage

• Increasing to 9.25/hr on Jan 1, 2015
• Movements supporting 15/hr (still inadequate)
• Over ½ of nations basic public assistance funds
  go to working families (substitute for benefits,
  therefore, taxes support corporations)

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SolutionsLiving Wage

• Over 140 municipalities have adopted living wage
  laws
• Including NY, LA, SFO, Seattle, Chicago, and
  Philadelphia
• 15 states now have minimum wages that exceed the
  federal requirement
• 10 states have passed pre-emptive laws forbidding
  cities and counties from raising the minimum wage

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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

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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

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Greenwash

• Public relations / ad campaigns
• BP invests 100 million annually in clean energy
  amt. it spends annually to market itself as
  moving Beyond Petroleum

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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
• Exxons Energy Cube
• -Gasoline is simply solar power hidden in
  decayed matter
• -Offshore drilling creates reefs for fish

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Sponsored Environmental Education Materials
(Examples)

• American Coal Foundations Power from Coal
• The earth could benefit rather than be harmed
  from increased carbon dioxide.

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Academics/Professional Organizations Affected

• Increasing corporatization of academia
• ?Private commercial funding of university
  research
• Undone research
• Secrecy/Gag Clauses
• Corporate-sponsored harassment of scientists
• For-profit colleges growing, marked by
  corruption, high interest rates on loans to the
  un- and under-qualified

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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

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Union of Concerned Scientists (2015)
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The Media

• 5 corporations control majority of US media (down
  from 50 in 1983)
• Extensive corporate-media links
• American Council on Science and Health

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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 20043061686-7
• (Study covers 1993-2003)

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Lobbying

• Approximately 40,000 lobbyists (11,781 full-time)
• Estimates of return on lobbying range from 28 to
  212 for every 1 spent (higher values more
  likely)
• Return on campaign contributions for elections
  for the most politically active companies 760
  per 1 spent

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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

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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

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Campaign Cash and Lobbying

• Citizens United
• Lobbying promotes international
  non-cooperation/isolationism

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• The alliance between GE Medical Systems and
  NY-Presbyterian Hospital

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General Electric

• Ranked by Forbes as worlds 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

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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

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General Electric

• Charles Wilson (CEO of GE pre- and post-WW II
  helped oversee U.S. military production during WW
  II)
• The revulsion against warwill 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.

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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 GEs US reactors found to be defective

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General Electric

• Operates coal-burning power plants
• Major releasers of toxic mercury
• Produces nearly 40 technologies used in fracking
• Increasing investments in fracking

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General Electric

• Operates a large financial services group
• Responsible for over 50 of companys 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

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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

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GEs 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

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GEs Record

• Sued radiologist who brought to light dangers of
  GEs 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 BDs Isovue

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GEs Record

• Americas largest corporate polluter
• 116 Superfund sites nationwide
• Approximately 13 in NY

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GEs 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

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GEs Record

• Eliminated 34,000 US jobs between 2000 and 2010
• Added 25,000 overseas jobs over same period
• One of nations top out-sourcers of jobs

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GEs 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

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GE CEO Jeffrey Immelt

• 2014 total compensation 37.2 million (up from
  25.8 million in 2013)
• Named Worlds Best CEO in 3 separate Barrons
  polls
• 2006 - 2011 - On Board of NY Federal Reserve Bank

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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)

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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!

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GEs Record

• Named Americas Most Admired Company by Forbes
• Named one of the Worlds Most Respected
  Companies in polls conducted by Barrons and The
  Financial Times

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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

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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

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Concerns About the Agreement

• Patients with developmental anomalies and cancers
  caused by GEs pollution diagnosed with GE
  scanners and treated with GE-manufactured
  therapeutic devices, increasing GEs profit

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• A macabre twist on cradle to grave care

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Health Insurance Industry

• Dubious practices
• Delisting
• Cherry picking
• Pre-existing conditions
• Limiting coverage of medications for high cost
  illnesses
• Often lower quality of care
• High administrative costs
• 15-30 (vs. 2-3 for Medicare and Medicaid)

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Health Insurance Industry

• Large profit margins
• Loyalty shareholders (not patients)
• Corruption

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Drug Companies Cost Structure

• Manufacturing 35
• Marketing 27
• Profits (after taxes) 18
• R and D 13
• Taxes 7

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Pharmaceutical Industry

• Only 10 of new drugs treat life-threatening
  conditions
• 90 of new drugs little or no better than
  pre-existing agents (or cause harm)
• Thus only 1 of new drugs life-saving

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Pharmaceutical Industry

• Pay-for-delay costs consumers and taxpayers 3.5
  billion in additional drug costs/yr
• Over 40,000 drug-related deaths not reported to
  FDA, as required, over last decade

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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

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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

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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

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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

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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

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PPACAPatient Protection and Affordability Care
Act

• Career arc of Elizabeth Fowler (architect of
  plan)
• VP for Public Policy and External Affairs
  (informal lobbying) at WellPoint (nations
  largest insurer)
• Chief health policy counsel to Senator Max Baucus
  (who drafted legislation)
• Head of Global Health Policy at pharmaceutical
  giant Johnson and Johnson

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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

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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

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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

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Solutions

• Living wage laws
• Work with corporations
• Benefit corporations
• Healthy PR
• Shareholder activism
• Risks/benefits

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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

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Solutions

• Activism / Letter writing / Protesting /
  Whistleblowing
• Work in groups
• Lobby legislators
• Run for office

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Solutions

• Increase funding of public education
• Independent scientific review of school curricula
• Prohibit use of sponsored curricula

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Solutions

• Establish safeguards re corporate involvement in
  academic research
• Higher standards of journalism
• Support alternative media

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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

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Solutions

• Based on Precautionary Principle
• Recognize natures net worth
• Measure prosperity based on Genuine Progress
  Index or Global Happiness Index, rather than
  Gross Domestic Product

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• All men are created equal
• Declaration of Independence
• Some people are more equal than others
• George Orwell

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Voltaire

• The comfort of the rich rests upon an abundance
  of the poor

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Hudson River, 2009
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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.

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Günter Grass

• The first job of a citizen is to keep your mouth
  open.

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African Proverb

• If you think you are too small to have an
  impact, try going to bed with a mosquito in your
  tent

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Contact Information and References

• Public Health and Social Justice Website
• http//www.publichealthandsocialjustice.org
• http//www.phsj.org
• martindonohoe_at_phsj.org