Extortion (40 page)
Authors: Peter Schweizer
Securities Regulation Law Journal:
quoted,
[>]
“self-audit” regulations,
[>]
–
[>]
Semler, Eric,
[>]
Senate Judiciary Committee: online piracy legislation and,
[>]
Sessions, Pete,
[>]
SGT, Inc.,
[>]
The Shame of the Cities
(Steffens),
[>]
Shapiro, Gary,
[>]
Shell Oil Company,
[>]
Shirley, Jon,
[>]
Shulman, Douglas,
[>]
Signatures restaurant,
[>]
Silicon Valley.
See
high-tech industry
Sillerman, Bob,
[>]
Silverglate, Harvey,
[>]
,
[>]
,
[>]
–
[>]
Simon & Schuster,
[>]
Skadden, Arps, Slate, Meagher & Flom LLP,
[>]
,
[>]
Small Company Capital Formation Act (H.R. 1070),
[>]
–
[>]
Smith, Brad (FEC Commissioner),
[>]
Smith, Bradley,
[>]
Smith, Gordon,
[>]
Solomon, Howard,
[>]
SOPA.
See
Stop Online Piracy Act (SOPA)
Southwestern Bell,
[>]
SOX.
See
Sarbanes-Oxley Act (SOX)
Speaker of the House: leadership PACs and,
[>]
–
[>]
; toll taking and,
[>]
–
[>]
.
See also
Boehner, John; Hastert, Dennis
special interests: public focus on,
[>]
–
[>]
; reform efforts and,
[>]
,
[>]
–
[>]
.
See also
lobbyists for firms and industries
Spilotro, Tony (“The Ant”),
[>]
Steelman, Sarah,
[>]
Steffens, Lincoln,
[>]
Stewart, James B. (
Times
writer),
[>]
Stewart, Jimmy (actor),
[>]
,
[>]
Stop Online Piracy Act (SOPA),
[>]
,
[>]
,
[>]
“strike bills,”
[>]
.
See also
“milker bills”
Sunlight Foundation,
[>]
Sunstein, Cass,
[>]
Susman, Sally,
[>]
“sweeps,”
[>]
TARP.
See
Troubled Asset Relief Program (TARP)
taxes, and Wall Street,
[>]
–
[>]
Telecom Industry Association,
[>]
Tenenbaum, Samuel,
[>]
Tenn PAC,
[>]
Texas Freedom Fund (PAC),
[>]
Thirty-Second Republican Legislative District Committee,
[>]
Thompson, John,
[>]
Thompson Communications,
[>]
–
[>]
Thune, John,
[>]
Tiberi, Pat: tax extenders and,
[>]
Tillman, Benjamin (“Pitchfork Ben”),
[>]
Tillman Act of 1907,
[>]
Time Warner Cable,
[>]
T-Mobile,
[>]
; AT&T merger with,
[>]
–
[>]
,
[>]
–
[>]
tobacco industry,
[>]
“tollbooth” method,
[>]
,
[>]
–
[>]
.
See also
legislative process
Toward Tomorrow PAC,
[>]
Towns, Ed,
[>]
Transparency International,
[>]
Troubled Asset Relief Program (TARP),
[>]
20th Century Fox,
[>]
Udall, Mark,
[>]
Udall, Tom,
[>]
underground Washington economy: contributions to other politicians and,
[>]
–
[>]
; loans to campaign committees and,
[>]
–
[>]
; party dues and,
[>]
–
[>]
; payments to family members and,
[>]
–
[>]
; pressure to extort in,
[>]
–
[>]
; time spent fund-raising in,
[>]
–
[>]
.
See also
campaign contributions; family members of politicians; fund-raising; legal system; legislative process; party dues
United Auto Workers,
[>]
U.S. Telecom Association (USTA),
[>]
Upton, Fred,
[>]
Valenti, Jack,
[>]
Van Scoyoc, Stewart,
[>]
Van Scoyoc Associates,
[>]
Verizon,
[>]
,
[>]
,
[>]
,
[>]
,
[>]
,
[>]
Vess Oil,
[>]
Viacom,
[>]
Vote to Elect Republicans Now PAC,
[>]
Waggoner, Michael,
[>]
Wall Street: FCPA cases and,
[>]
,
[>]
; Obama administration and,
[>]
–50y; Republicans and,
[>]
,
[>]
–
[>]
Wall Street Journal
,
[>]
; quoted,
[>]
,
[>]
,
[>]
Walton, Alice,
[>]
Walton, Jim,
[>]
Warner Music Group,
[>]
Washington, George (U.S. president),
[>]
Welch, Ronald,
[>]
Welsh, Carson, Anderson & Stone (investment firm),
[>]
West, Tony,
[>]
Westbrook, Amy,
[>]
Westling, Richard,
[>]
Wireless Tax Fairness Act of 2011 (H.R. 1002),
[>]
–
[>]
Wolf, Frank,
[>]
Woodbury, Bruce,
[>]
World Bank,
[>]
World Economic Forum,
[>]
“worldwide governance indicators,”
[>]
Xi Jinping (Chinese vice premier),
[>]
Young, Cindy,
[>]
Zhou, DeLing,
[>]
Zucker, Jeff,
[>]
Zuckerberg, Mark,
[>]
Acknowledgments
This book would not have happened without the dedicated work of Rick White, David Healy, Jr., Sally Jo Roorda, and Wynton Hall. My sincere thanks also goes to Stuart Christmas, Michelle Chandler, Eric Eggers, Peggy Sukhia, Jay Woodham, Tony Mock, Brian Baugus, Bryan Trochessett, Jerome Hudson, Zach Huffman, Mary Francis Dunlap, Blaine Cherry, Joshua Eller, and Sandy Schulz. Thanks also to the board of the Government Accountability Institute who made this possible: Chairman Stephen K. Bannon, Vice Chairman Rebekah Mercer, Ron Robinson, Owen Smith, and Hunter Lewis. Thanks, too, to John Raisian of the Hoover Institution for his friendship and support.
Bruce Nichols of Houghton is not only a superb editor but also a man of keen insight and wisdom. Thanks, Bruce, for another great ride together. And my agent, Glen Hartley, never ceases to amaze me in his ability to keep a project focused. The same goes for Lynn Chu.
A special appreciation goes to my children, Jack and Hannah, who have inspired me with their grace and character during difficult times. I love you both very much.
The author alone is the responsible for the contents of this book.
1
THE DRUG TRADE
O
VER THE PAST
half century there has been a massive web woven between the federal government and the health care industry. Whether due to special taxes, fines, regulations, subsidies, or mandates, there have been enormous sums of money at stake in governmental decision-making for health care companies—and the companies’ investors. By 2007, federal government programs like Medicare, Medicaid, and others accounted for 46% of all health care spending in the United States.
1
Knowing what changes might be in store for those programs, and having advance notice of details of other health care legislation, could translate into a lot of profits. For a sitting United States senator, trading stocks at the same time you are pushing and writing legislation could net you millions in capital gains.
Throughout 2009, Washington was consumed by the Patient Protection and Affordable Care Act, or what became commonly known (at least to its critics) as Obamacare. It began as a campaign promise, became a debate, and ended with horse-trading, political threats, and partisan muscle. The bill that was eventually passed by Congress and signed by President Obama was 2,500 pages long. Very few members actually knew everything that was in the bill or what it all meant. Some members had not even had a chance to read it. The health care industry and pharmaceutical companies employed thousands of lobbyists to shape the legislation. When the dust finally settled, clear winners and losers emerged. The details that determined who came out ahead and who didn’t were almost always hammered out behind closed doors. A single event could cause the price of a stock to swing wildly. For example, when six senators announced on July 27, 2009, that they were going to eliminate the “public option”—a government-run insurance policy—from their version of the health care reform bill, the share prices of three major insurance companies surged by between 8% and 10% the next day. Trading stocks in such an environment could be highly profitable, especially if you knew about such events in advance.
One of those at the center of shaping the bill was Senator John Kerry of Massachusetts. Kerry, first elected to the Senate in 1984, had been a longtime advocate of health care reform. He serves as a member of the Health Subcommittee on the powerful Senate Finance Committee. The former Democratic nominee for President is a member of the wealthy Forbes family and is the beneficiary of at least four inherited trusts. In 1995, his wealth jumped dramatically when he married Teresa Heinz, the widow of Pennsylvania Senator John Heinz, heir to the Heinz family fortune. Teresa Heinz Kerry is worth hundreds of millions of dollars.
Like other very wealthy people, John Kerry is an investor. His family trusts are relatively small, worth less than $1 million, according to his 2009 financial disclosures. By themselves they could hardly sustain his lifestyle. The bulk of the Kerrys’ wealth resides in a series of marital trust and commingled fund accounts. All together, these funds include significant investments in stocks of many corporations. It is his buying and selling of health care stocks during the debate over health care reform that is particularly interesting. While some have reported that the Kerrys’ assets are in a blind trust, they have not been designated as such on his financial disclosure forms.
2
Contrary to public perception, the major pharmaceutical companies were in favor of Obama’s health care bill. The President’s new program was expected to increase the demand for prescription drugs by making health care more accessible. Big Pharma, as the companies are collectively known, decided it could not stop the bill, so it might as well try to influence its provisions. Back in 1994, when the Clinton administration (and notably Hillary Clinton) had pushed for dramatic changes in the health care system, several effective ads sponsored by the pharmaceutical industry, starring “Harry and Louise,” helped defeat “Hillarycare.” In 2009, Big Pharma hired the two actors again. Only this time they were fifteen years older—and they were in favor of the bill. “Well, it looks like we may finally get health care reform,” said Harry, in one ad.
