Gutting the Health Care Corporate Strike Force

Health care corruption is a severe problem in the US, and globally.

For years, we have ranted about the US government's lackadaisical - to use an execessively polite term - approach to wrongdoing by big health care organizations.  The trend really got started back in the day when now Governor Chris Christie (R - NJ), then a federal prosecutor, started making deferred prosecution agreements available to corporations which appeared to have committed white collar crimes.  However, these agreements were originally meant to give young, non-violent first offenders a second chance.

Since then, we have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multibillion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

The Health Care Corporate Strike Force

The US Department of Justice during the Obama administration made some modest attempts to decrease such impunity.  One such measure was the formation of a Health Care Corporate Strike Force.

As reported by Law.com,

the strike force was created in the fall of 2015, with five dedicated lawyers working on about a dozen of the most complex corporate fraud cases in the health care space.

Andrew Weissmann, the then-chief of the DOJ’s fraud section, told a health care conference in April 2016 that the section was placing 'a heightened emphasis' on corporate health care fraud investigations. He pointed to the recently established Corporate Fraud Strike Force that he said would focus resources in investigation and prosecution of larger corporate health care law violations, as opposed to smaller groups or individuals.

The Downsizing of the Health Care Corporate Strike Force

But now, after candidate Donald Trump promised to 'drain the swamp,'



and railed against the supposed corruption of former Secretary of State Hillary Clinton (leading tochants of 'lock her up'), the Trump administration will further diminish this tiny attempt to reduce impunity, the Law.com report stated:

the DOJ, under the Trump administration and new U.S. Attorney General Jeff Sessions, has announced new priorities: violent crime, drugs and illegal immigration.

In restructuring to focus on those priorities, the DOJ has gutted the Health Care Corporate Fraud Strike Force, according to at least two high-level sources who worked at the Justice Department until recently. The sources declined to be named, as being identified could affect their current jobs and clients.

The sources said the strike force has been cut from five full-time lawyers to only two – assistant chief Sally Molloy and trial attorney William Chang. And both are splitting their time in the strike force with other duties.

The DOJ declined an interview request for this story. But DOJ spokesperson Wyn Hornbuckle issued this statement: 'The Health Care Corporate Strike Force, as with the entire health care fraud unit, is going strong under steady leadership—continuing to vigorously investigate and hold accountable individuals and companies that engage in fraud, including tackling an opioid epidemic that claimed 60,000 American lives last year.'

The Task Force had resolved one major case against for-profit hospital chain Tenet.  The Task Force alleged but Tenet actually admitted its

supervisors lied to in-house counsel about the purpose of millions of dollars in contracts, which purportedly were for 'services' but really were bribes and kickbacks to clinics and doctors for sending Medicaid patients to Tenet hospitals.

While its settlement included a non-prosecution agreement, the Task Force actions also resulted in two convictions and a pending indictment of actual people.

Still,

The lawyer openings on the strike force were exacerbated when, on April 14, Sessions imposed a hiring freeze on the DOJ’s Criminal Division as well as on U.S. Attorney Offices, as reported by The New York Times, which obtained a copy of the freeze memo.

Some DOJ lawyers believe, sources said, that white-collar crime and corporate fraud resources are being shifted to cover Sessions’ new priorities of violent crime, drugs and illegal immigration. That emphasis, they said, can be seen in who runs the DOJ’s criminal division.

Under former U.S. Attorney General Eric Holder, himself a white-collar crime prosecutor and then corporate defense attorney, assistant attorney general Leslie Caldwell led the division. Caldwell specialized in securities fraud and white-collar crime, and had participated in the Enron Corp. prosecution.

Under Sessions, himself a former law and order prosecutor in Alabama, the criminal division now reports to deputy assistant attorney general Kenneth Blanco. Blanco has a long history of bringing cases centered on drugs and violent crime in the Miami-Dade State Attorney’s Office, in the U.S. Attorney’s Office in Southern Florida, and in Main Justice in Washington, D.C., where he served as chief of the narcotic and dangerous drug section at the DOJ.

Discussion

So the Trump administration proposes two part time attorneys to drain the health care corporate swamp.  That seems like bailing out the Titanic with teaspoons. But should we expect anything else from an administration that is being increasingly identified with corruption and impunity itself?

We have frequently discussed outright corruption in health care as one of the most important causes of health care dysfunction.  Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report did not get much attention.  Since then, health care corruption has been nearly a taboo topic in the US.  When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects benighted less developed countries.  On Health Care Renewal, we have repeatedly asserted that health care corruption is a big problem in all countries, including the US, but the topic remains anechoic,. presumably mainly because its discussion would offend the people made rich and powerful by corruption.

As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,  there is so much money to be made through pharmaceutical (and by implication, other health care corruption) that the corrupt have the money, power, and resources to protect their wealth accumulation by keeping it obscure.  In the TI Report itself,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

I might as well repeat myself once again.  As I wrote in 2015, if we are not willing to even talk about health care corruption, how will we ever challenge it? 

So to repeat an ending to one of my previous posts on health care corruption....  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Musical Interlude

What else, the Honey Island Swamp Band, playing "Prodigal Son,"

Health Care Corruption No Longer a Taboo Topic?

We have been going on about the ruinous effects of health care corruption, the role of impunity in enabling worsening corruption, our lack of good ways to challenge these problems, and our ongoing inability to even discuss what amounts to taboo topics (which we dubbed the "anechoic effect.") But as  corruption, and crime are increasingly linked to the most powerful leaders in the US, it becomes harder to deny that we have a huge problem with corruption in general, and thus maybe it becomes harder to deny we have a huge problem with health care corruption (see also our posts on conflicts of interest, crime, and specifically bribery, extortion, fraud, and kickbacks in health care.)

US Governmental Corruption in the Headlines

Last month we noted that mainstream media are now beginning to discuss how the US has a history of not adequately investigating corruption, and has developed a culture of impunity that is fostering corruption.

Yesterday, the Washington Post reported that 200 US Representatives (all Democrats) filed a lawsuit charging the President of the US with accepting emoluments (payments or gifts meant to influence him, that is, the moral equivalent of bribes) from foreign governments, and charged that this violated the US Constitution.  While there is controversy about whether these lawmakers have the "standing" to pursue this lawsuit, at least some legal scholars insisted that it is corruption that is at issue:

Legal scholars consulted by the congressional plaintiffs said their complaint is distinctive because of the special standing granted to Congress.

'The Framers of our Constitution gave members of Congress the responsibility to protect our democracy from foreign corruption by determining which benefits the president can and cannot receive from a foreign state,' said Erwin Chemerinsky, the incoming dean of the law school at the University of California at Berkeley.

'When the president refuses to reveal which benefits he is receiving — much less obtain congressional consent before accepting them — he robs these members of their ability to perform their constitutional role,' Chemerinsky said. 'Congressional lawmakers . . . have a duty to preserve the constitutional order in the only way they can: by asking the courts to make the President obey the law.'

The same article noted that this is just the latest lawsuit on this matter:

News of the lawsuit emerged less than 24 hours after attorneys general in the District and Maryland, both Democrats, filed suit alleging that payments to Trump violated the Constitution’s anti-corruption clauses. In another lawsuit filed against Trump by business competitors, the Justice Department recently defended Trump’s actions, arguing that he violated no restrictions by accepting fair-market payments for services.

That article also explained that the lawsuit was about corruption, albeit not in so many words.

The conflicts created are so vast, Frosh said, that Americans cannot say with certainty whether Trump’s actions on a given day are taken in the best interest of the country or that of his companies.

'Constituents must know that a president who orders our sons and daughters into harm’s way is not acting out of concern for his own business,' Frosh said. 'They must know that we will not enter into a treaty with another nation because our president owns a golf course there.'

Recall that Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In response to these lawsuits, today an op-ed in the Guardian asserted

We’re now witnessing kleptocracy on an unprecedented scale in America. And there’s barely even a fig leaf of cover. Trump has openly enmeshed his private financial interests in national policy. To say that this creates an appearance of corruption would be far too polite. This is the real deal: sketchy dealings all the way down.

Health Care Beginning to be Characterized by the Taboo Word "Corruption"  


Meanwhile, much more quietly, people in health care are starting to talk more openly about the possibility that health care corruption is as real a problem as government corruption.  Last November, I attended the first academic conference explicitly about health care corruption, albeit in Canada.  In May, I was on a panel at a plenary session entitled "Corruption and Patient Harm in the Medical-Industrial Complex" at the Lown Institute/ RightCare Conference in the Boston area (agenda here).

Late in May, the leaders of the Lown Institute and RightCare (Vikas Saini and Shannon Brownlee) published an article in the Huffington Post entitled, "Corrupt Health Care Practices Drive Up Costs And Fail Patients." The authors asserted:

'Corruption' is not a term most Americans would probably apply to what goes on inside American health care. But if corruption is defined as persons or institutions wielding power for their own gain, then our health care system is riddled with it. And it is not only costing us billions of dollars, it is harming untold numbers of patients like Ralph Weiss. Examples abound.

Also late in May, the Hastings Report included an article entitled "Closed Financial Loops: When They Happen in Government, They're Called Corruption; in Medicine, They're Just a Footnote" by Kevin De Jesus-Morales, and Vinay Prasad. The authors accused the medical profession from hiding true corruption in the guise of manageable conflicts of interest, per the abstract:

Many physicians are involved in relationships that create tension between a physician's duty to work in her patients’ best interest at all times and her financial arrangement with a third party, most often a pharmaceutical manufacturer, whose primary goal is maximizing sales or profit. Despite the prevalence of this threat, in the United States and globally, the most common reaction to conflicts of interest in medicine is timid acceptance. There are few calls for conflicts of interest to be banned, and, to our knowledge, no one calls for conflicted practitioners to be reprimanded. Contrast our attitudes in medicine with public attitudes toward financial conflicts among government employees. When enforcement of rules against conflict of interest slackens in the public sector, news organizations investigate and publish their criticism. Yet even when doctors are quoted in the media promoting specific drugs, their personal financial ties to the drug maker are rarely mentioned. Policies for governmental employees are strict, condemnation is strong, and criminal statutes exist (allowing for corruption charges). Yet the evidence that conflict is problematic is, if anything, stronger in medicine than in the public sector. Policies against conflicts of interest in medicine should be at least as strong as those already existing in the public sector.

I will just ignore the irony presented by our apparent inability so far to actually affect what appears to be massive corruption affecting the current US government.

Summary

We live in perilous times, but at least people are starting to recognize some perils, rather than hiding them with euphemisms or treating their very mention as taboo.  If the US republican experiment survives, at least maybe we can learn from the experience to address conflicts of interest, crime, and corruption in spheres outside of government, particularly health care.

 So to repeat an ending to one of my previous posts on health care corruption....  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Trumping Up a Health Care Charity - Trump Organization Received Increasing Revenue from a Children's Cancer Care Charity

While health and health care are clearly not central interests of the current US President, Donald J Trump, we have noted some disturbing stories about the effects of his leadership on health care.  Most importantly, prior to the election, a story appeared alleging that Mr Trump licensed his name, and actively supported the Trump Network, which sold dodgy vitamin supplements to gullible consumers based on the results of urine tests of unproven, at best, accuracy (look here). While Mr Trump is controversial, to say the least, on multiple levels, never in modern history can I recall a president who was alleged to have been a major player in what appears to be a health scam.

Moreover, since Mr Trump was elected we have noted his proposed and actual appointments to positions of power over health and health care people with severe conflicts of interest, sometimes with no or limited experience in and knowledge of health and health care, and sometimes who had acted against the values of health care professionals  (look here, here, here, here, here, here, here, here, and here ).  (Please note that since while our focus in health care dysfunction, we emphasize cases that are not extensively reported in the media and/or medical and health care literature.  So this list is hardly exhaustive.)

Now we have in the public arena a case in which Mr Trump apparently subverted the good intentions of a charity designed by his son to benefit children with severe illness, resulting in apparent private gain for Mr Trump.

The Beginnings of the Eric Trump Foundation and its Support of St Jude Childen's Research Hospital

An article in Forbes published this week recounted how Eric Trump set up a charity whose main goal was to support children's cancer care, and which would channel the maximum amount of money raised directly to reputable health care organizations.

Eric Trump set up his foundation as a public charity, a classification that allows it to raise most of its money from outside donors. In 2007, when he was 23, the first Eric Trump golf tournament took place, raising $220,000. A compelling sales pitch evolved--the free golf course and the donated goods and services assured donors that every penny possible went to charity. The Eric Trump Foundation employed no staff until 2015, and its annual expense ratio averaged 13%, about half of what most charities pay in overhead. His original seven-person board was made up of personal friends, an innocuous lot who helped sell tournament tickets, which last year ranged from $3,000 for a single all-day ticket to $100,000 for a pair of VIP foursomes.

For the first four years of the golf tournament, from 2007 to 2010, the total expenses averaged about $50,000, according to the tax filings. Not quite the zero-cost advantage that a donor might expect given who owned the club but at least in line with what other charities pay to host outings at Trump courses, according to a review of ten tax filings for other charitable organizations.

That is all admirable, to say the least. But apparently it was not to continue.

Donald Trump Demands His Pound of Flesh

Eric Trump's plans to minimize his charity's overhead soon collided with the wishes of his father, Donald J Trump, then CEO of the Trump Organization, now President of the United States.  Per Forbes, 

But in 2011, things took a turn. Costs for Eric Trump's tournament jumped from $46,000 to $142,000, according to the foundation's IRS filings. Why would the price of the tournament suddenly triple in one year? 'In the early years, they weren't being billed [for the club]--the bills would just disappear,' says Ian Gillule, who served as membership and marketing director at Trump National Westchester during two stints from 2006 to 2015 and witnessed how Donald Trump reacted to the tournament's economics. 'Mr. Trump had a cow. He flipped. He was like, 'We're donating all of this stuff, and there's no paper trail? No credit?' And he went nuts. He said, 'I don't care if it's my son or not--everybody gets billed.''

Katrina Kaupp, who served on the board of directors at the Eric Trump Foundation in 2010 and 2011, also remembers Donald Trump insisting the charity start paying its own way, despite Eric's public claims to the contrary. 'We did have to cover the expenses,' she says. 'The charity had grown so much that the Trump Organization couldn't absorb all of those costs anymore.' The Trump Organization declined to answer detailed questions about the payments.

Furthermore, the amount of money demanded by the Trump Organization rapidly increased.

The cost for Eric's golf tournament quickly escalated. After returning, in 2012, to a more modest $59,000--while the event brought in a record $2 million--the listed costs exploded to $230,000 in 2013, $242,000 in 2014 and finally $322,000 in 2015 (the most recent on record, held just as Trump was ratcheting up his presidential campaign), according to IRS filings. This even though the amount raised at these events, in fact, never reached that 2012 high.

The Forbes article alleges this occurred despite Eric's protestations to the contrary.

Remember, all those base costs were supposedly free, according to Eric Trump. The golf course? 'Always comped,' he says. The merchandise for golfers: 'The vast majority of it we got comped.' Drinks: 'Things like wine we were normally able to get donated.' And the evening performances from musicians like Dee Snider of Twisted Sister and comedians like Gilbert Gottfried: 'They did it for free.'

The Trump Organization Takes Over the Eric Trump Foundation

The move to claw back increasing amounts of charitable proceeds from the Eric Trump Foundation as payments to the Trump Organization seemed to coincide with a shift in the governance of the Eric Trump Foundation. Per Forbes,

In 2010, the year the economics of the tournament suddenly pivoted, four of the seven original board members, who were personal friends of Eric, left. Those 4 were eventually replaced by 14 new board members, the majority of whom owed all or much of their livelihoods to the Trump Organization. Six of them were effectively full-time employees, including Trump lawyer Michael Cohen and executive vice president Dan Scavino Jr., who both serve in political roles for President Trump. Another owns a company that billed the Trump campaign $16 million. Add in Eric himself, as well as his wife, Lara, and 9 of the 17 Eric Trump Foundation board members had a vested interest in the moneymaking side of the Trump empire. The foundation had become a de facto subsidiary of the Trump Organization.
 
'They were wearing two hats,' says Langan, the former director of golf, who says he sat in on meetings where he couldn't tell where the business ended and the charity began. 'You're dealing with people talking about the event and the charity who also at the same time are thinking about it as a corporation and as a business. It's a for-profit club. You know, they're trying to make money.'

Why this happened, and who orchestrated it were not clear. However, it does suggest that at best, the charitable nature of the Eric Trump Foundation was diluted, to the point that it conceivablye became a de facto part of the for-profit Trump Organization, a company whose majority owner was, and still is Donald J Trump.

Eric Trump Launches an Ad Hominem Attack Against Critics of His Charity

Within a day of the Forbes article, Eric Trump was interviewed by the British Tabloid, the Daily Mail. Its headline was:

Eric Trump says critics of his children's charity are 'sick' and 'disgusting' after news report clobbers him for paying his company $100K for expenses – and he insists there was 'zero profit' to his family

To make a long story short, Mr Trump perseverated about the total amount of money his charity brought to St Jude, and fixated on the amount of a single payment made by the Trump Organization to the charity of $100,000 supposedly to offset the bills sent to the charity from the Trump Organization.

But $100,000 in one year's revenues for his family's company pales in comparison to the millions the foundation raises each year for child cancer research.

He maintained that

none of the money resulted in actual profit to the Trump organization - only reimbursements for costs that couldn't be paid through specific donations.

However, the Daily Mail article included no discussion of the escalating payments after 2011, allegedly reaching as high as $322,000 in 2015, and no justification that these were required only to cover costs.  Calling critics "sick" or "disgusting" was an ad hominem attack.  However, Mr Trump never did contradict the rising unexplained payments made by his foundation to his father's company. 

Summary

Eric Trump ought to be commended for his original goal, to benefit pediatric cancer care through a charity which had minimal overhead expenses.  While he apparently was able to maintain this mission for several years, it appears that his father, Donald J Trump, CEO of the Trump Organization and now President of the United States, was able to siphon increasing amounts of money from the charity back into his family-owned corporation, and to position his cronies as trustees of his son's charity.

While the Eric Trump Foundation seems to be continuing to raise substantial money for pediatric oncology care, his claims that the organization has virtually no overhead, and his own control of the foundation now appear dubious.  His father's ability to convert donated money into corporate revenue appeared at the least to compromise the stated mission of the Foundation

to support St Jude Children's Research Hospital

In the last few years its mission also appeared to be to support the revenue of the Trump Organization. Thus the transformation of the Eric Trump Foundation seems to fit the ethical definition of corruption per Transparency International

the abuse of entrusted power for private gain

albeit that the Eric Trump Foundation was entrusted to support St Jude at minimal overhead cost, and that the gain accrued privately not to Eric Trump, but to the Trump Organization and presumably its principal owner at the time, Donald J Trump.

This case, of course, just adds to many others in which non-profit health care organizations threaten their own missions at the apparent behest of and/or for the apparent benefit of their leaders, and in this case, their leaders' relatives.  So I could simply again point out that we need leadership of health care organizations that puts mission, and patients' and the public's health ahead of all other considerations, including revenue enhancement, and particularly ahead of the leaders' enrichment.

This is a special case, though, because the person who seemed to gain the most benefit from the machinations was not just another corporate CEO, but the future president.  Now, as president, Donald J Trump is the de jure leader of the entire government health care apparatus, including the Department of Health and Human Services, and all its associated agencies, and is the de jure leader of the entire government law enforcement apparatus, including the Department of Justice.  The leader of the US Internal Revenue Service, which enforces the laws and regulations about non-profit organizations, incidentally also answers to the President.

Thus as an advocate for more functional health care, disquieting is far too polite a term to describe the presidency in the hands of someone who apparently so cavalierly re-engineered for his personal benefit a charitable foundation meant to help sick children, who so cavalierly supported conflicted and ill-informed leadership of government health care agencies, and who so cavalierly licensed his name to a sketchy vitamin sales scheme.    

Will the Current Crises Finally Prompt America to Address How it is Haunted by Corruption and Impunity?

There is one tiny silver lining in the political storm clouds swirling over the US.  Some of the issues about which we have been ranting on Health Care Renewal are no longer so easily dismissed.  We have long harangued about the ruinous effects of health care corruption, the role of impunity in enabling worsening corruption, our lack of good ways to challenge these problems, and our ongoing inablity to even discuss what amounts to taboo topics (which we dubbed the "anechoic effect.")  In response, we have been called alarmists, nay-sayers, and worse.  Now the parade of crises created by the Trump regime have made these problems salient to American society.

Corruption is a Huge Problem and We are Ill-Equipped to Deal With It

We have frequently discussed outright corruption in health care as one of the most important causes of health care dysfunction.  Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report did not get much attention.  Since then, health care corruption has been nearly a taboo topic in the US.  When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects benighted less developed countries.  On Health Care Renewal, we have repeatedly asserted that health care corruption is a big problem in all countries, including the US.  But even after Pope Francis decried health care corruption, the topic remained anechoic.

Yet somehow, a substantial minority of US citizens, 43%, seemed to believe that corruption is an important problem in US health care, according to a TI survey published in 2013 (look here).  But that survey was largely ignored in the media and health care and medical scholarly literature in the developed world, and when it was discussed, it was again in terms of results in less developed countries.  Health Care Renewal was practically the only source of coverage in the US of the survey's results.

So imagine my surprise when Vox published an article on May 17, 2017 entitled "The US is Terrible at Investigating Politicians.  Blame the Constitution."   The article opened with a discussion of mechanisms in place in some other countries explicitly designed to cope with severe corruption of public officials.  The author then noted,

Designing investigations into high-level misconduct is extremely difficult. Every nation has tough choices to make, and none has come up with a perfect solution — though it’s clear that the US system is uniquely bad.

The author noted that the US Constitution provides no clear mechanisms for addressing corruption, and in their absence, at best "we'ver jerry-rigged things instead."

So it is good that there is now some minimal public recognition that we in the US have not developed an effective approach to corruption.  The unasked question, of course, is why not.  Just becauses our constitution is more than 200 years old is not really an excuse.  Constitutions can be amended and laws can be written.  I submit that we have been in a long-standing state of denial about the existence of corruption, based perhaps on an erroneous conception of American exceptionalism, and enabled by those who have gotten rich off corruption, and for a long time have been using substantial resources to keep the problem anechoic.

Now we pay the penalty for our perhaps wilfull ignorance.

Impunity Enables Worsening Behavior

We have long railed against the impunity of top leaders in health care.  We have gone on ad infinitum about the parade of legal settlements made by large health care organizations after allegations of often egregious misbehavior, including episodes of bribery, fraud, kickbacks, and other crimes.  Typically, such settlements allowed the organizations to walk away after paying a monetary penalty that may have appeared big, but was tiny compared to the monay that could have been made from the misbehavior.  In particular, almost never does anyone at the organizations who authorized or directed the bad behavior, particularly top executives, suffer any negative consequences at all, even when they may have made huge bonuses because of the revenues such behavior generated.  The continuing impunity of top health care leaders only seems to encourage future bad behavior.

So imagine my surprise when Vox published on May 18, 2017, an article entitled, "Trump isn’t a toddler — he’s a product of America’s culture of impunity for the rich."

Its author, Matthew Yglesias, indicted President Trump as a long time beneficiary of impunity, whose behavior was enabled by impunity, and who is thus typical of American corporate leaders.

He’s a man who’s learned over the course of a long and rich life that he is free to operate without consequence. He’s the beneficiary of vast and enormous privilege, not just the ability to enjoy lavish consumption goods but the privilege of impunity that America grants to the wealthy.

Trump’s 'law and order' attorney general wants to throw the book at relatively small-time drug offenders. Trump himself has spent his entire career skating away from lawbreaking with a fine paid here and a political contribution there. He’s an unusual figure, but also very much an exemplar of his era and a product of a decades-long ideological campaign to do as much as possible to empower the wealthy and powerful.

Imagine my increased surprise when USA Today published on May 17, 2017, and ediorial by Christian Schneider that similarly asserted that Trump has a

core belief that as long as you're an A-lister, there are no rules worth obeying.

Trump as a Long-Time Beneficiary of Impunity

Trump asserted on the infamous Access Hollywood tape

And when you're a star, they let you do it. You can do anything.

Mr Yglesias documented,

What’s beyond question, however, is that Trump’s expressed view that a rich and famous man like him can get away with anything is both sincere and largely correct. From his empty-box tax scam to money laundering at his casinos to racial discrimination in his apartments to Federal Trade Commission violations for his stock purchases to Securities and Exchange Commission violations for his financial reporting, Trump has spent his entire career breaking various laws, getting caught, and then essentially plowing ahead unharmed. When he was caught engaging in illegal racial discrimination to please a mob boss, he paid a fine. There was no sense that this was a repeated pattern of violating racial discrimination law, and certainly no desire to take a closer look at his various personal and professional connections to the Mafia. 

Mr Schnider noted

His entire adult life, Trump has been able dodge legal trouble simply by using his bank account as a shield. When Trump Management was sued by the government in 1973 for refusing to rent apartments to people of color, Trump and his father were able to settle without any admission of guilt. When students at Trump University sued him for defrauding them, Trump simply wrote a check for $25 million to make it all go away.

Marriage in the tank? He's got a pre-nup. Casino business going belly-up? He goes to bankruptcy court, walks away, and writes another book praising his own genius.

Trump's Impunity is the Current Vivid Case of a Problem of Historic Proportions

Trump's current actions are, per Mr Yglesias,

entirely emblematic of America’s post-Reagan treatment of business regulation. What a wealthy and powerful person faced with a legal impediment to moneymaking is supposed to do is work with a lawyer to devise clever means of subverting the purpose of the law. If you end up getting caught, the attempted subversion will be construed as a mitigating (it’s a gray area!) rather than aggravating factor. Your punishment will probably be light and will certainly not involve anything more than money. You already have plenty of money, and your plan is to get even more. So why not?

I might quibble that the US problem with corruption and impunity goes back years before President Reagan's administration.  However, still

beyond Trump, America is desperately in need of a larger political reckoning as well.

The entire culture of civil fines and settlements without admission of wrongdoing that dominates American business regulation is fundamentally odd. If the rules say you can’t keep your casino afloat with an unapproved loan and you respond to that by getting a shady secret unapproved loan to keep your casino afloat, shouldn’t you be out of the casino game? If compliance with money laundering rules is mandatory and you don’t comply, shouldn’t you be shut down?

Any given case obviously presents its nuances, and not every case can be taken to the mattresses. But the settlement racket too easily lets regulators feel like they’re putting points on the board even while criminals continue to roam the streets, having learned the lesson that they’re untouchable. That, fundamentally, is Trump’s problem. Not that he can’t control himself, but that he’s been taught he doesn’t have to. 

Summary

Sometimes crises do illuminate long festering problems.  If the US survives the current serial crises, maybe we will be able to develop a more open, rational and effective approach to corruption and impunity, including their health care variants.  

So to repeat an ending to one of my previous posts on health care corruption....  if we really want to reform health care, in the little time we may have before our health care bubble bursts, we will need to take strong action against health care corruption.  Such action will really disturb the insiders within large health care organizations who have gotten rich from their organizations' misbehavior, and thus taking such action will require some courage.  Yet such action cannot begin until we acknowledge and freely discuss the problem.  The first step against health care corruption is to be able to say or write the words, health care corruption.

Through the Revolving Door, Darkly

While the rare appointments to top health care positions by the Trump administration deservedly get considerable media coverage, lower level appointments sneaking through the revolving door do not.  So we hereby present our latest roundup of same, in chronological order by first coverage.

Lance Leggitt from Health Care Lobbyist at Baker Donelson to Chief of Staff for the Secretary of Health and Human Services

This appointment first appeared in StatPlus on March 2, 2017 but was behind a paywall.  It was more recently covered in the New York Times in a long article about revolving door appointments not specific to health care.  From the Times,

Lance Leggitt, who serves as chief of staff to Tom Price, the health and human services secretary, worked last year as a lobbyist for 10 different health care companies, including United States Medical Supply and Advanced Infusion Services. He focused largely on lobbying the agency related to Medicare billing rules, as well as rules for health care supplier accreditations, lobbying disclosure reports show. All these issues are routinely handled by the agency he helps oversee.

Note that a lobbyist for many large health care corporations would now be next door to the leader of government policy on health care. 

Makan Delrahim from Lobbyist at Brownstein Hyatt Farber Schreck to Assistant Attorney General for Anti-Trust

This was first reported by Reuters on March 17, 2017, and has health implications beyond the headline above,

Before coming to work at the White House following Trump's inauguration in January, Delrahim was a lobbyist with the law firm Brownstein Hyatt Farber Schreck, LLP.

Furthermore,

Another client in 2016 was health insurer Anthem Inc, which this year lost a court fight with the Justice Department over whether it would be allowed to merge with rival Cigna. Anthem is appealing the loss.

In addition, per David Sirota, writing in the International Business Times,

Makan Delrahim served as one of the healthcare conglomerate’s top lobbyists working on antitrust issues as the company pushed the Justice Department to approve its controversial proposal to merge with Cigna.

Delrahim would head the office that Anthem is pushing to approve the merger, which physicians and consumer groups say could raise healthcare prices and reduce medical coverage for up to 53 million Americans.

And,

According to federal lobbying records, Anthem paid $370,000 in lobbying fees to Delrahim’s firm, Brownstein Farber, between 2015 and 2016. Those fees paid for the lobbying services of Delrahim and William Moschella. Delrahim had previously served in the Justice Department’s antitrust unit under George W. Bush, and Moschella was also a top Justice Department official during Bush’s presidency. The lobbying records said Delrahim and Moschella were working on 'antitrust issues associated with Anthem's proposed acquisition of Cigna.' Lobbying records show Delrahim has also lobbied on antitrust issues for Pfizer, Qualcomm, Ardent Health Services and WMG Acquisitions.

Delrahim was last listed as an Anthem lobbyist five months ago. He is currently serving as President Donald Trump’s deputy White House counsel.

News of Delrahim’s appointment to the nation’s top antitrust job comes weeks after Anthem lawyers told a Delaware judge that they are relying on the Trump administration to settle the antitrust division’s current lawsuit blocking its Cigna merger. Between those court statements and Delrahim’s appointment, President Trump had a personal telephone call with Anthem’s CEO, Joseph Swedish. Anthem gave $100,000 to Trump’s inaugural committee, and after Trump assumed office, the Securities and Exchange Commission helped Anthem quash a shareholder resolution designed to force it to disclose its lobbying expenditures.

Note that Mr Delrahim has worked to promote consolidation of already large health care corporations, yet now would be charged with regulating such consolidation.


John Bardis from MedAssets CEO to Assistant Secretary of Health and Human Services for Administration

This first appeared in Modern Healthcare on March 22, 2017,

John Bardis, the founder and former CEO of MedAssets, has been named HHS assistant secretary for administration.

Alpharetta, Ga.-based MedAssets was a publicly traded group purchasing and revenue-cycle management company. Bardis founded it in 1999 and grew it into one of the largest healthcare group purchasing organizations. He oversaw the firm's diversification into other areas, like revenue-cycle services, for hospital and health system clients.

Bardis stepped down as CEO of MedAssets in early 2015.

 Note that most recently Mr Bardis was the CEO of a health care financial firm and thus was responsible for that company's financial fortunes.  While he has previous experience running other health care related companies, he seems to have no direct experience in health care or public health, per his official biography.

A Prelle Pfuelle from Lobbyist for the Mining Industry to Occupational Safety and Health Administration Administrator

This first and only appeared so far in the Managed Care Matters blog on April 2, 2017,

The Trump Administration’s pick to lead OSHA will push the President’s deregulation agenda far and deep as he shifts OSHA to a more 'business friendly' focus. According to Administrator-designee A. Prelle Pfuelle, the watchword will be 'compliance assistance' instead of enforcement.

Reports indicate the new Administrator, a former lobbyist for the mining industry, will provide 'leadership to curtail funding for enforcement, rescind rules under deregulatory orders, and drop defense of regulations facing legal challenges.' The mining industry has been actively applauding initial moves by President Trump to revoke, rescind, or withdraw several regulations and enforcement actions; Pfuelle may have been instrumental in those early actions.

Pfuelle’s past experience includes stints working as a manager in a diamond mining firm in South Africa, labor relations in Liberia’s oil industry, workplace safety officer in the Pakistani ship-breaking association and most recently lobbyist for the Oklahoma natural gas industry.

 Note that while the OSHA mission is to protect the health and safety of workers, this appointee's past work has involved the financial interests of the mining industry.  Health and safety protections may cost this industry money.  Furthermore, the article suggests that the appointee may be more "friendly" and sympathetic to corporations that employee workers than to to the workers whose health and safety he ostensibly would be protecting.  Note further that he seems to have no experience in public health or health care.

Brett Giroir from CEO of VibraCyte to Assistant Secretary of Health and Human Services

This was first reported by the Bryan (TX) Eagle on April 25, 2017,

President Donald Trump intends to nominate the former executive vice president and CEO of Texas A&M’s Health Science Center to a U.S. Department of Health and Human Services leadership position, according to a White House announcement.

Brett Giroir, who currently serves as president and CEO of biopharmaceutical company ViraCyte and as an adjunct professor at the Baylor College of Medicine in Houston, would serve as assistant secretary of health for the department.

 Note that Dr Giroir is currently responsible for the financial health of a biotechnology company.  He is however, unlike many of these other appointments, a physician.

Summary

When we started Health Care Renewal, the topic of conflicts of interest in health care got little attention in the media or in the medical and health care literature.  The topic of health care corruption was virtually taboo.  Through the years these topics have become somewhat more prominent.  But it took the Trump campaign and then the Trump transition and administration to really put them in the headlines.

So, for example, up to now we did not much discuss the amazing collection of conflicts of interest affecting the Trump administration's pick for leadership of the US Food and Drug Administration, Dr Scott Gottlieb.  His case has been well covered since he was named the nominee.  For example, the NY Times article noted above included:

 Dr. Scott Gottlieb, the nominee to lead the Food and Drug Administration, received more than $350,000 in payments in 2014 and 2015 from nearly a dozen different pharmaceutical companies, including Vertex Pharmaceuticals, whose two approved drugs are seen as breakthrough treatments for cystic fibrosis. (They carry list prices of more than $250,000 a year.) Dr. Gottlieb, who has never been registered as a lobbyist but has served as the director of eight pharmaceutical companies and one laboratory company, wrote in a letter that he was prepared to recuse himself as necessary to avoid any conflicts.

I should note that we have discussed previous examples, in 2007 and 2008 (look here, here, here and here), of Dr Gottlieb's strident promotion of the interests of pharmaceutical and biotechnology companies.  After 2008, I though we thought further discussion of this topic would be redundant.  Who would have thought that Dr Gottlieb, such a noisy champion of pharma and biotech, would be a nominee to run the FDA in 2017?  Whou would have thought.... 

But now headlines about conflicts of interest and corruption are so frequent that the less vivid but still important cases, as those discussed above, may get lost in the shuffle.  So the case of Dr Gottlieb is just the most prominent example of how the latest administration has set the revolving door spinning.  (See also previous posts here, here, and here.) 

As we noted previously, the revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The ongoing parade of people transiting the revolving door from industry to the Trump administration once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry. The latest cohort of revolving door transits suggests that regulatory capture is likely to become much worse in the near future.

So, as we have said before.... The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.