Recent posts about corporations

Corporations Spend Millions to Sway Democrats

Source: New York Times, March 15, 2010

As the year-long fight over health care reform draws to a close, corporations are once again pouring big money into influencing the debate. The U.S. Chamber of Commerce has already spent $11 million just this month to try and get 27 Democrats who supported the health care bill last year to oppose it. Pharmaceutical companies have bought $12 million worth of advertising to try and defeat the measure. The total amount of money being aimed at swing Democrats during this round of lobbying could total $30 million before week's end. The corporate front group Americans for Prosperity, financed by the billionaire conservative oil man David Koch, has also jumped into the fray, funding an anti-reform ad campaign that cost nearly $1 million. As several on-the-fence Democrats try to sort out their constituents' feelings towards the bill, the lobbying is becoming deafening.

For-Profit Schools Leading Students into Debt

Source: New York Times, March 13, 2010

studentdebt.jpgAds for private, for-profit colleges and trade schools like the University of Phoenix, ITT Tech and Corinthian Colleges, Inc., lure students by leading them to believe that after graduation, they will land well-paying jobs that will help them get to a solid middle-class life. But graduates often end up seeing more bills than paychecks as they struggle to pay back massive student loans -- often at double-digit interest rates --after landing low-income jobs. A two-year associates degree at ITT Technical Institute, for example, costs around $40,000. The Le Cordon Bleu culinary school in Portland, Oregon arranged one student a loan of almost $14,000 that carried a a 13 percent interest rate and a $7,327 "finance charge." Experts say recruiters for these schools use aggressive, sometimes deceitful recruiting practices that can mislead students into poverty. The schools derive the bulk of their revenue from federal loans and grants, and the percentages have been climbing rapidly. The Apollo Group, which owns the University of Phoenix, derives 86 percent of it revenue from federal student aid sources, up from 69 percent two years earlier. Critics argue that these institutions profit at taxpayer expense while delivering questionable benefits to students. The Obama administration has floated a proposal to protect students from predatory practices by barring for-profit schools from loading them up with more debt that is justified by the salaries of the jobs they would likely pursue. The proposal has sparked fierce lobbying from the for-profit educational industry, which is pushing to maintain the status quo.

Study Debunks Insurers' Explanation for Exorbitant Rate Hikes

Source: Health Care for America Now

Fingers CrossedThe pro-health care reform group Health Care for America Now has released a study (pdf) that contradicts insurance companies' claims that their recent, exorbitant rate hikes were driven by increases in the cost of medical care. The study shows that over the last eight years premiums have almost doubled, while medical inflation only increased by 40 percent. HCAN found that insurance companies are raising their rates more than 20 percent faster than the amount they are paying out to doctors, and twice as fast as their underlying costs of medical care are rising. In short, insurance companies are hiking premium prices much more quickly than their costs are increasing. HCAN also found that insurance companies are spending the extra money on perks. For example, Anthem spent $27 million on 103 executive retreats to locations like Hawaii in 2007 and 2008 alone. From 2000 to 2008, insurance companies spent $716.4 billion of their premium dollars on administrative costs, salaries for their CEOs, and investor profit -- practically enough to fund the entire health reform bill.

CMD's Wendell Potter to Appear on Bill Moyers' Journal

Wendellpelosi"Wendell Potter with House Speaker Nancy PelosiThe Center for Media and Democracy's own Wendell Potter, former head Corporate Communications for CIGNA, and now the Center for Media and Democracy's Senior Fellow on Health Care, is going to New York City to tape an interview with Bill Moyers for his show, Bill Moyers' Journal, to be broadcast Friday night, March 5.

Big Pharma Funds Trips for California Medicaid Officials

Source: California Watch, March 1, 2010

Tropical drinksCalifornia officials who oversee the spending of billions of dollars in California's Medicaid prescription drug program failed to disclose free flights, hotel rooms and meals funded by pharmaceutical companies. One of the officials, the chief of the pharmacy division at California's Department of Health Care Services, helps decide which drugs will be among the $8.5 billion worth of medication that California will dispense to low income people. Pharmaceutical companies funneled money for the officials' trips through several non-profit business groups that exist solely for the purpose of funding meetings and conferences. The groups raise money by charging drug company executives who do business with Medicaid programs up to $2,000 in registration fees. The groups have raised about $1.8 million from corporate executives since 2005, and spent the money on travel, lodging and entertainment for California's Medicaid pharmacy directors. Under Medi-Cal policy, state officials are prohibited from accepting gifts worth over $320 from any firm, subsidiary or person that "has financial dealings with the department," and are supposed to report the trips as gifts. After the investigative journism group California Watch revealed the gifts, a Medi-Cal spokesman confirmed that pharmacy officials had taken about a dozen trips since 2006, acknowledged that they should have been reported as gifts and said the omissions would be corrected.

Corporations Hide Flight Records From Public View

Source: ProPublica, February 26, 2010

A federal district court ruled that the public interest journalism group ProPublica can obtain a list of corporate-owned airplanes whose flight information was blocked from public view. ProPublica first sought the list in 2008 under the Freedom of Information Act, after the CEOs of General Motors, Ford and Chrysler flew to Washington, D.C. on corporate jets to ask Congress to bail out their companies. Those flights became known because the Federal Aviation Administration (FAA) provides real-time flight information that the public could see. But the bad publicity over the flights led General Motors to try and stop the public from tracking its planes in the future. A little-known law called the Block Aircraft Registration Request Program permits companies to ask that their corporate jets' flight information be blocked from public view. The National Business Aviation Association (NBAA) filed a lawsuit to block ProPublica's request, saying hiding flight information is necessary to corporate executives' security, and prevent disclosure of business trips that could affect stock prices or reveal information about potential deals to a company's competition. But the judge ruled against those arguments, saying they are overly expansive and are outweighed by the public's right to access taxpayer-funded government records. She also pointed out that even if someone were to look up past flights, they couldn't determine who was on the flight or what the purpose of the flight was.

First Blackwater, Then Xe, and Now Paravant: Still Armed and Dangerous

Source: ABC News, February 25, 2010

The private military contractor Blackwater -- which rebranded itself as "Xe" in February, 2009 to distance itself from negative incidents like the September, 2007 shooting in Baghdad's Nisoor Square that killed at least a dozen people -- has created a shell company called "Paravant" to try and keep winning lucrative government military contracts. Both Paravant and Xe are owned by Eric Prince, owner of Blackwater. Paravant won contracts to operate in Afghanistan without identifying its affiliation with Blackwater/Xe to the U.S. government. Paravant has been operating as a subcontractor to global defense contractor Raytheon, but the new name and hidden identity haven't changed Blackwater/Xe/Paravant's behavior. In September, 2008, a Paravant employee signed out more than 500 AK-47 assault rifles from a bunker in Afghanistan that held weapons designated for the Afghan National Police and Army. The employee signed the weapons out using the name "Eric Cartman," the racist, obnoxious character from the cable TV cartoon "South Park." The rifles were signed out even though employees had been denied permission to carry weapons on several occasions. Some of the weapons were still unaccounted for for months afterward. Two days after the rifles were taken from the bunker, a Paravant contractor shot another contractor in the head after his AK-47 accidentally discharged.

CMD's Wendell Potter Speaks at Introduction of House Bill

Source: PR Newswire, February 23, 2010

CMD's Wendell PotterCMD's Senior Fellow on Health Care, Wendell PotterThe House of Representatives today introduced legislation to repeal an exemption to federal anti-trust laws that the insurance industry, including health insurers, has enjoyed since 1945. The McCarran-Ferguson Act of 1945 gave states the authority to regulate the insurance business without interference from federal regulation, unless federal law expressly provides otherwise. Federal anti-trust laws protect consumers by preventing unfair business practices like price-fixing, bid-rigging, and allocation of markets, and are aimed at helping keep competition honest. House Speaker Nancy Pelosi held a press conference February 23 to announce the "Health Insurance Industry Fair Competition Act," and the Center for Media and Democracy's Senior Fellow on Health Care, Wendell Potter, was invited to speak at the event. Mr. Potter, who worked inside the insurance industry for 20 years, said the exemption for insurers has "contributed to a health care system that has become one of the most dysfunctional and one of the most expensive in the world. And it is time that the health insurance industry begins to abide by the same rules and regulations that every other industry in this country has to abide by." Democrats hope the bill will lower premiums by giving consumers more choices. The White House supports the legislation. The insurance industry's trade group, America's Health Insurance Plans, opposes the measure, saying that their industry is already highly regulated and that mergers and other business practices are already subject to federal anti-trust laws. They also say the law would create "legal uncertainty," which would be bad for the industry. Read Mr. Potter's entire statement in support of the bill here.

Here's Looking at You, Kids

Source: Newsweek, February 19, 2010

Few cell phone users know that mobile phone companies like AT&T, Verizon and Sprint can track the locations of cell phones in real time, thanks to small global positioning sensors (GPS) placed inside phones. They can also analyze how a call is routed through towers, to pinpoint a phone's location to an area the size of a city block. The feature was originally designed to help police and emergency personnel follow up on 911 calls, but the FBI and other law enforcement agencies have been obtaining more and more cell phone location records, without notifying the target or obtaining judicial warrants that establish probable cause. Cell phone companies started getting so many requests from law enforcement to trace cell phone data, that Sprint Nextel set up a dedicated Web site that allows law enforcement agencies to access people's cell phone location records directly from their desks -- although they must give passwords to long on, and provide valid court orders for non-emergency requests. Information about the increasing clandestine cell phone tracking by law enforcement emerged the same week that a Philadelphia couple filed a lawsuit against their son's school district in which they accused his high school of activating a Webcam embedded in their son's school-issued laptop computer and covertly photographing the 15 year-old at home. How did they discover the school was spying on their son? The suit states that on November 11, an assistant principal at the high school informed their son that he had been "engaged in improper behavior in his home," and, as evidence, showed him a photo taken from the Webcam embedded in his laptop.

WellPoint's Heart-Stopping Rate Increase

Cash or Credit onlyA congressional hearing next week into the proposed 39 percent rate increase in California by health insurance giant WellPoint could breathe new life into health care reform efforts on Capitol Hill, especially if lawmakers broaden their investigation into the outrageous rate increases other insurers are also demanding from coast to coast.

WellPoint found itself in Congressional investigators' crosshairs after the California Department of Insurance challenged the company's planned increase in the rates it charges its customers who cannot get coverage through the workplace, but have to go it alone in what is called the individual market.

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