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How Interest Groups Behind Health-Care Legislation Are Financed Is Often Unclear
Many of the Washington interest groups that are seeking to shape final health-care legislation in the coming weeks operate with opaque financing, often receiving hidden support from insurers, drugmakers or unions.
The groups, some newly formed and others reappearing with different sponsors, have spent months staging noisy protests, organizing letter-writing campaigns and contributing to a record $200 million advertising blitz on health-care reform.
Now, interest groups are making a last-minute push as Democrats begin working out the differences between the House and Senate health-care bills. House Speaker Nancy Pelosi (D-Calif.) said after a White House meeting Wednesday that negotiators are "very close" to an agreement.
The compressed time frame gives outside groups one more chance to attempt to derail the legislation or influence it to their advantage. But in many cases, it is hard to tell where their money is coming from.
The Institute for Liberty, for example, was a one-man conservative interest group with a Virginia post office box and less than $25,000 in revenue in 2008. Now, the organization has a Web site, a downtown Washington office and a $1 million advocacy campaign opposing President Obama's health-care plans.
Andrew Langer, the group's president, said the organization receives no funding from health-care firms but declined to provide details. "This year has been really serendipitous for us," he said. "But we don't talk about specific donors."
The biggest spenders in the health-care debate are well-known Washington veterans with clear constituencies, including the U.S. Chamber of Commerce, which is representing corporate titans who are against reform, and a well-organized network of labor organizations pushing for the legislation. Health Care for America Now, for example, is a consortium of unions and liberal groups that expects to spend $42 million on its wide-ranging pro-reform campaign.More elusive groups
But outside such established interest groups is a significant but more elusive collection of organizations, many of them particularly energized in opposition to Democratic health-care reform efforts. Most are organized as nonprofits, meaning they do not have to reveal many financial details beyond basic revenue and expenses. Some are bankrolled by charitable foundations with a political bent or by industries with a financial stake in the debate; nearly all use names that seem designed to obscure their origins.
The Partnership to Improve Patient Care, for example, headed by former congressman Tony Coelho (D-Calif.), was formed by the drug industry in November 2008 to lobby against binding government effectiveness studies, which could be used to determine what insurance companies must cover. The American Council on Science and Health is an industry-friendly group whose board member Betsy McCaughey helped set off the "death panels" frenzy last year.
"It's sort of like money-laundering their PR," said Lisa Graves, executive director of the Center for Media and Democracy, a liberal-leaning group that runs a Web site called PRWatch.org. "A lot of these groups are heavily funded by corporations and then don't reveal it. They try to imply that they are funded primarily by individuals, but that's clearly not the case."
The Center for Medicine in the Public Interest (CMPI) is a New York-based think tank headed by Peter Pitts, a former Food and Drug Administration official who appears frequently on newscasts condemning Democratic health-care proposals. CMPI is an offshoot of the San Francisco-based Pacific Research Institute, which has received foundation grants over the years from Philip Morris, Pfizer and the Pharmaceutical Research and Manufacturers of America, according to public records.
While serving as president of CMPI, Pitts also works as the global health-care chief at Porter Novelli, a New York public relations firm whose clients include Johnson & Johnson, GlaxoSmithKline, Wyeth and Pfizer. He acknowledges that CMPI also receives money from the pharmaceutical industry, which is supporting reform legislation in exchange for a White House promise to limit cuts.
Pitts said he sees no conflict between his two roles, saying the jobs "are completely separate." Tax filings show that Pitts earned a $250,000 salary from CMPI in 2007, when he also headed another firm's global health-care practice.
"We support health-care reform, we just want to do it appropriately," Pitts said of CMPI. "Sometimes it puts us in the same camp as pharmaceutical companies; sometimes it doesn't."
Many of the groups on the right receive funding from a network of influential conservative foundations, including those connected to the Koch brothers of Wichita, Kan., who run the largest private energy firm in the United States. Records show that the Koch-connected Claude R. Lambe Charitable Foundation, for example, has given $5.7 million to FreedomWorks and $3.1 million to Americans for Prosperity, both of which have taken a leading role in organizing "tea party protests" and other anti-reform efforts.
Chris Harris, communications director for the liberal Media Matters Action Network, which tracks conservative groups, said "the conservative movement has been hijacked by a handful of wealthy corporations and right-wing foundations."
Conservatives counter that liberal groups are beholden to labor unions and liberal foundations with deep pockets. HCAN, which occupies a leading role in advocating for health-care reform, has received$8 million from the AFL-CIO, the Service Employees International Union and other labor groups, said Richard Kirsch, the group's national campaign director. But the bulk of the group's funding comes from Atlantic Philanthropies, a private liberal foundation created by billionaire Charles F. "Chuck" Feeney, he said.
"We're transparent about which of the groups or stakeholders in the health system fund us," Kirsch said. "I think that sets us apart from most other groups in this debate."
One of the leading anti-reform groups, Conservatives for Patients' Rights, was founded last year by Rick Scott, a former hospital executive who runs a chain of walk-in clinics in Florida. Scott, who was pushed out as chief executive at Columbia/HCA amid a fraud investigation in the 1990s, has personally paid for more than half of a $10 million ad campaign by his group, a spokesman said.History of opposition
Other groups have a long history of opposition to government involvement in health care. The Tucson-based Association of American Physicians and Surgeons was formed in the late 1940s in reaction to early efforts at universal care and has opposed government involvement in medicine since then, including Medicare, Medicaid and mandatory vaccination programs. The group garnered attention last year for staging anti-reform rallies featuring doctors in white medical coats. Spokeswoman Kathryn Serkes said the group relies on $325 in annual dues from about 4,000 members for its operating costs.
Another major player, the 60 Plus Association, bills itself as a conservative alternative to AARP, the 40 million-member seniors group. Sixty Plus has saturated the airwaves with more than $9 million worth of television spots in recent months, alleging that senior citizens could lose their doctors and that the government "will decide if older patients are worth the cost."
Founder and President James L. Martin declined to provide details about the group's funding, but said it has received no donations from drugmakers, insurers or the Republican Party. In 2007 -- the last year for which tax information is available -- 60 Plus reported less than $2 million in revenue and no membership dues.
"We've never claimed to be a dues-paying membership group," Martin said. "We're a voluntary organization with over 500,000 supporters who have made donations over the years. . . . This wasn't a big concerted effort, I don't care what the left says about it."