Summary: the Corruption of Health Care Leadership as a Major Cause of Health Care Dysfunction
As we wrote in August, 2017, 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
the scale of corruption is vast in both rich and poor countries.
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 got little attention. Health care corruption
has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,
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
objectives and towards their own profit maximising interests.
Presumably the leaders of other kinds of corrupt organizations can do the same.
When health care corruption
is discussed in English speaking developed countries, it is almost
always in terms of a problem that affects some other places, mainly
presumably benighted less developed
countries. At best, the corruption in developed countries that gets
discussed is at low levels.
In the US, frequent examples are the “pill mills” and various cheating
government and private insurance programs by practitioners and
patients. Lately these have gotten even more attention as they are
decried as a cause of the narcotics (opioids) crisis (e.g., look here). In contrast, the US government has been less inclined to address the
activities of the leaders of the pharmaceutical companies who have
pushed legal narcotics (e.g., see this post).
However, Health Care Renewal has stressed “grand corruption,” or the
corruption of health care leaders. 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 multi-billion
revenues without admitting guilt. Almost never are top corporate
managers subject to any negative consequences.
We have been posting about this for years at Health Care Renewal, while seeing little progress on this issue. For example, we had long complained that US
law enforcement had not been devoting enough effort going after the
corruption of the leadership of large health care organizations, thus
effectively allowing these leaders’ impunity. However, in the later years of the Obama administration the US
Department of Justice during the Obama administration made some
modest attempts to decrease such impunity, including the
formation of a Health Care Corporate Strike Force.
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.
This little bit of progress was not to last. Unfortunately, that strike force was downsized by the Trump administration as we noted in July, 2017. Then as we noted in May, 2018, even the previously modest efforts by the US government to challenge corrupt acts
by large US health care organizations were decreasing. By that date, we found only one significant settlement made during the year. That month, a report by Bloomberg, appeared with the headline, “White-Collar Prosecutions Fall to 20-Year Low Under Trump,” on May 25, 2018.
Increasing Evidence of Corruption in the Trump Administration
Meanwhile, the Trump administration itself increasingly appeared corrupt. In January, 2018, we first raised the question about how health care corruption could be pursued under a corrupt regime. We noted sources that
summarized Trump’s. the Trump family’s, and the Trump administration’s
corruption.. These included a website, entitled “Tracking Trump’s Conflicts of Interest” published by the Sunlight Foundation, and two articles published in the Washington Monthly in January, 2018. “Commander-in-Thief,” categorized Mr Trump’s conflicted and corrupt behavior. A Year in Trump Corruption,” was a catalog of the most salient cases in these categories in 2017.
In July, 2018, we addressed the Trump regime’s corruption again By then, more summaries of Trump et al corruption had appeared. In April, 2018, New York Magazine published “501 Days in Swampland,” a time-line of starting just after the 2016 presidential election. In June, 2018, ProPublica reviewed
questionable spending amounting to $16.1 million since the beginning of
Trump’s candidacy for president at Trump properties by the US
government, and by Trump’s campaign, and by state and local governments. Meanwhile, Public Citizen released a report on money spent at Trump’s hospitality properties.
The Global Anti Corruption Blog Update
This month, the Tracking Corruption and Conflicts of Interest in the Trump Administration–October 2018 UpDate appeared in the Global Anti-Corruption Blog. It is voluminous, requiring about 26 single-spaced pages to print, with numerous references. But then again…
Poster displayed in front of Trump International Chicago Hotel, displaying the slogan: “Subtlety is not our strength. Indulgence is.”
So let me try to summarize the main points of Trump’s indulgence, keyed to the four sections of the report.
1. U.S. Government Payments to the Trump Organization
One of the most direct ways that President Trump can profit from the presidency is by making decisions that effectively require U.S. government agencies to purchase goods or services from the Trump Organization. Though unseemly and costly to taxpayers, this is one of the less destructive forms of potential profiteering by President Trump, since it does not significantly distort U.S. policy.
Examples included the Secret Service and Department of Defense renting expensive space in Trump Tower in New York; the Secret Service paying the Trump Organization in order to protect President Trump during the many occaisions (208 days at that point) he has spent at Trump Organization luxury properties; payments to the Trump Organization for Secret Service and other government staff presence at overseas Trump properties when visited by the President on ostensibly government business; and payments to the Trump Organization when Trump and his family fly on his private planes for non-government business.
Note that these payments seem in gross violation of Article II, section 1 of the US Constitution, which states:
The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be encreased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.
This has been called the “domestic emoluments clause,” and is supposed to prohibit a kind of conflict of interest, that is, a President getting paid by some part of the US government, or by state governments separate from his regular salary and benefits. Nonetheless, Trump has been effectively paid, again and again, through the Trump Organization by the US government.
2. Use of the Power of the Presidency To Promote Trump Brands
Donald Trump and his family can also enrich themselves by taking advantage of the unique status and exposure of the President of the United States to promote Trump family brands.
While distasteful, this brand-promotion activity is also one of the less harmful ways in which the Trump Administration may seek to profit from the Presidency, as it does not involve significant distortions of U.S. policy. Nonetheless, the overt attempts to use the presidency as a marketing opportunity indicate a troubling underlying attitude.
Examples included the White House website promoting Melania Trump’s jewelry line; WH senior advisor KellyAnne Conway, speaking in the Briefing Room, endorsing Ivanka Trump’s fashion line; various activities that served to promote Trump Organization luxury properties, particularly Mar-a-Lago and Bedminster; promotion of Ivanka Trump’s fashion line via her official participation in a World Bank Women Entrepreneurs Finance Initiative; the Voice of America and State Department promoting Ivanka Trump’s book; the Trump Organization’s apparently illegal use of the Presidential Seal to promote golf products; Trump Organization’s discount promotion of golf merchandise to WH staff; and Trump Campaign and Republican National Committee events at Trump properties.
3. U.S. Government Regulatory and Policy Decisions that Benefit the Business Interests of the Trump Family and Senior Advisors
Federal government decisions—on regulation, law, enforcement, and discretionary spending—may be influenced or manipulated in ways that benefit the private commercial interests of the Trump Organization or other businesses closely tied to President Trump, his family, or his senior advisors. This is a much more serious problem, as it involves not only enrichment of the Trump family and associates at taxpayer expense, but also potential distortions of U.S. policy.
This has occurred on such a massive scale that
The extent of the Trump Organization’s business interests makes it impossible to summarize all of the potential conflicts of interest that might arise. For example, the Trump Organization has been involved in labor disputes; Trump businesses regularly apply for visas for foreign workers (see here, here, and here); and Trump businesses are subject to countless federal safety and environmental regulations. (See here for an in-depth analysis of many of these potential conflicts.) As head of the executive branch, President Trump might have influence over numerous decisions that affect the Trump Organization’s business interests.
Some of the examples provided were government actions that affected the Housing and Urban Development (HUD) subsidies being received by Trump Organization properties; the Dakota Access Pipeline, which was being built by a company in which Trump owned stock; the Clean Water Act, whose rollback would benefit Trump Organization golf courses; the General Services Administration lease held by the Trump Organization to operate the Trump International Hotel in Washington, DC; the decision to demolish the current FBI headquarters, possibly allowing a competitor to the Trump International Hotel in Washington to be built across the street; various business interests of Ivanka Trump and her husband; the proposed infrastructure project which could variously affect the Trump Organization; the Justice Department investigation of Deutsche Bank, a large source of loans to Trump and his family; offshore oil drilling which could affect the attractiveness of Trump properties like Mar-a-Lago; Fannie Mae and Freddie Mac, controlled by the government, but whose investors include a large hedge fund in which Trump has a stake; the travel ban so as not to affect countries in which the Trump Organization has operations; H2B visa applications which supply workers to Trump properties; the tax reform plan which greatly affected Trump’s taxes; and the choice of US Attorneys in jurisdictions in which the Trump Organization operates and whose offices may be in a position to investigate Trump, the Trump Organization, and Trump associates.
Furthermore, government decisions may have affected the financial fortunes of Trump associates such as Commerce Secretary Wilbur Ross, special advisor Carl Icahn, confidant Rupert Murdoch, Tennessee Valley Authority nominee Kenneth Allen, Department of Homeland Security Secretary Kirstjen Nielsen, Interior Secretary Ryan Zinke, former director of the Centers for Disease Control Brenda Fitzgerald, Housing and Urban Development Secretary Ben Carson, etc, etc, etc
4. Private and Foreign Interests Seeking To Influence the Trump Administration Through Dealings with Trump Businesses
Another significant concern is that individuals, private firms, and foreign governments may believe—rightly or wrongly—that they can curry favor with the Administration and increase their odds of favorable policy decisions by engaging in private business transactions with companies owned by or connected to President Trump—or, in the case of foreign governments, granting favorable regulatory treatment to Trump business operations in their countries. This is one of the most serious concerns related to the Trump family’s interest in profiting from the presidency, as it gives rise both to the appearance of corruption and the risk of actual corruption.
While again the scope of this problem was again “too broad to summarize,” let me give some examples:
– Bookings made at the Trump International Hotel in Washington DC by foreign governments including Bahrain, Saudi Arabia, Kuwait, Turkey, Malaysia, the Phillipines, and Afghanistan.
– Events at other Trump properties, the renting and purchasing of Trump properties, Trump Organization developments in countries including Indonesia, India, Panama, Turkey, United Arab Emirates, Scotland, Dominican Republic, and Taiwan.
– Trump Organization seeking trademarks in China.
– Membership in Trump golf courses
– Trump real estate transactions with secretive buyers
– A large number of business dealings by Jared Kushner, Trump’s son-in-law involving China, Qatar, Russia, Israel, and Japan
– former Trump lawyer and “fixer” Michael Cohen’s consulting company’s dealings with Russia, and allegedly creating a “slush fund” to be used by Trump
Note that any of the payments made to Trump via the Trump Organization by
foreign govenments could violate the “foreign emoluments clause” of the
US Constitution, that is, Article I, Section 9
No Title of Nobility shall be granted by the United States: And no
Person holding any Office of Profit or Trust under them, shall, without
the Consent of the Congress, accept of any present, Emolument, Office,
or Title, of any kind whatever, from any King, Prince, or foreign State.
again is supposed to prohibit a species of conflict of interest, any
payment to a US government official, including the President, by a
foreign government, without the express consent of the US Congress.
There are several lawsuits in progress on this matter, but no action has been taken by the Trump regime, or its supporters in Congress, to curtail these foreign emoluments.
In addition, the Trump Organization has had dealings with US state governments that may violate the domestic emoluments clause of the US constitution. These included tax breaks recently given to new Trump hospitality properties by the state of Mississippi.
Meanwhile Corruption, Even of a President, Remains a Virtually Taboo Topic
The scope of conflicts of interest and corruption affecting US President Donald Trump, his vast business empire, his family and associates seems incomprehensively big.
And still, corruption remains a nearly taboo topic.
In November, 2017, we noted that once again, a report by
Transparency International that showed that in an international survey
of corruption perceptions, substantial minorities of US respondents
thought that US corruption was increasing, and was a particular
affliction of the executive and legislative branches of the national
government, other government officials, and top business executives.
There was virtually no coverage of these results in the US media, just
as there was virtually no coverage of a 2013 survey that showed 43% of US respondents believed that US health care was corrupt.
Similarly, the reports about Trump related corruption listed above have generated little discussion.
Despite the extensive and ever-increasing list of apparently corrupt
acts by the Trump and cronies, grand corruption at the top of US
government, with its potential to corrupt not just health care, but the
entire country and society, still seems like a taboo topic. The US news
media continues to tip-toe around the topic of corruption, in health
care, of top health care leaders, and in government, including the top
of the US executive branch. As long as such discussion seems taboo, how
can we ever address, much less reduce the scourge of corruption? The
first step against health care
corruption is to be able to say or write the words, health care
But even if we can take that step, when the fish is rotting from the
head, it makes little sense to try to clean up minor problems halfway
towards the tail. Why would a corrupt regime led by a president who is
actively benefiting from corruption act to reduce corruption?
The only way we can now address health care corruption is to excise the
corruption at the heart of our government.