Ethics

The "Chez Sludge" scandal in San Francisco, involving the city giving away free toxic sewage sludge as "organic Biosolids compost" for gardeners, took another turn on July 13, 2010.

President Obama is calling a big part of the health care reform bill he signed into law last March a "Patients' Bill of Rights", suggesting that many of the consumer protections contained in the new law were the same ones the health insurance industry succeeded in killing time and again over many years through a fear-mongering campaign it secretly financed.

Obama is right -- but only to a point. An important right was missing from his list of consumer protections because, once again, insurers had made sure it would not be part of any bill that reached his desk.

The insurance industry defeated many attempts to pass a Patients' Bill of Rights in the 1990s and 2000s, despite considerable bipartisan support in both the House and Senate. It did this by funneling millions of dollars through a big PR firm it hired to set up a front group -- the Health Benefits Coalition -- whose sole purpose was to scare people away from the legislation. The industry also had one especially important ally: Obama's predecessor in the White House, George W. Bush. Bush threatened to veto any Patients' Bill of Rights that he (read: the insurance industry and its business allies) didn't like. Lawmakers were never able to agree on a single bill that Senators and House members could agree to (the House approved a weakened version of the bill Bush presumably would sign but the Senate refused to weaken its bill), so they eventually just gave up.

Front group king Rick Berman, who has worked in the shadows for years, is starting to draw closer scrutiny from the IRS, the media and the public for the unique, self-dealing business model he developed to champion for big business. Berman, a former lobbyist, set up six nonprofit organizations with innocuous names like the Center for Consumer Freedom, the American Beverage Institute and the Employment Policies Institute. Despite their nonprofit designation, together these groups provide as much as 70 percent of the revenues of his for-profit enterprise, Berman and Company. The Center for Consumer Freedom, for example, took in $1.5 million in revenues in 2008, of which 93 percent went to Berman and his firm. The American Beverage Institute took in $1.7 million, of which 82 percent went to Berman and his firm. None of his non-profit groups have independent offices or staff, and all of them pay Berman's for-profit business for services like accounting, copying, writing, operating Web sites, placing opinion-editorials, and bookkeeping, which is managed by Berman's wife, Dixie Lynn Berman. Rick Berman sits on the boards of his organizations, holds a total of 24 positions within them, and he serves as Executive Director for most of them. Sounds fishy, right?