My Apologies to Michael Moore and the Health Insurance Industry

In advance of my appearance with Michael Moore on Countdown with Keith Olbermann tonight on MSNBC
(8 and 11 p.m. ET), I would like to offer an apology to both Moore and
his arch enemy, the health insurance industry, which spent a lot of
policyholder premiums in 2007 to attack his movie, Sicko.

I need to apologize to Moore for the role I played in the insurance industry's public relations attack campaign again him and Sicko,
which was about the increasingly unfair and dysfunctional U.S. health
care system. (I was head of corporate communications at one of the
country's biggest insurance companies when I left my job in May 2008.)
And I need to apologize to health insurers for failing to note in my new
book, Deadly Spin, that the front group they used to attack Moore and Sicko -- Health Care America -- was originally a front group for drug companies. APCO Worldwide, the PR firm that operated the front group for insurers during the summer of 2007, was outraged -- outraged,
I tell you -- that I wrote in the book that the raison d'etre for
Health Care America was to disseminate the insurance industry's talking
points as part of a multi-pronged, fear-mongering
campaign against Moore and his movie. An APCO executive told a reporter
who had reviewed the book that I was guilty of one of the deceptive PR
tactics I condemned: the selective disclosure of information to
manipulate public opinion.

Which Industry Was Really Behind "Health Care America?"

Well, shucks. Ignorance is no defense, I know, but no one at APCO
ever told me, even when I was on the insurance industry's side, that
Health Care America's first benefactor was Big Pharma.

Here are the offending sentences, excerpted from the chapter entitled
"The Campaign Against Sicko," in which I described a top-secret meeting
of insurance company flacks -- including me -- where APCO and America's Health Insurance Plans (AHIP), the lobbying group for insurers, laid out the industry's strategy:

(AHIP's Mike) Tuffin and (APCO's Robert) Schooling said
they had already begun recruiting conservative and free-market think
tanks, including the American Enterprise Institute and the Galen Institute, as third-party allies.
Those allies, they said, would be working aggressively to discredit
Moore and his movie. They then mentioned an ally that most of us had
never heard of, Health Care America. It had been created by AHIP and
APCO for the sole purpose of attacking Moore and his contention that
people in countries with government-run systems spent far less and got
better care than people in the United States. The sole reason Health
Care America exists, they said, was to talk about the shortcomings of
government-run systems.

I learned a few days ago from Jack O'Dwyer, longtime watchdog of the PR profession and publisher of O'Dwyer's PR Daily,
that an APCO executive told him I had failed to disclose that APCO had
originally set up Health Care America in 2006 with money primarily from
big drug companies. Big Pharma
was worried at the time that drug makers would be Moore's main target
in the movie. Thinking ahead, they feared that being vilified in Sicko would increase the odds that lawmakers would cast them as the chief villain when the health care reform debate got underway.

O'Dwyer blogged last Tuesday that, "Just about every known evil
practice that PR has ever engaged in is described in 'Deadly Spin.' " He
noted that I had mentioned APCO -- the second biggest firm in the
O'Dwyer ranking, with $100.3 million in fees in 2009 -- several times in
the book. APCO and AHIP must be paying a media monitoring service to
alert them immediately when I am mentioned in the media, as they did for
Michael Moore and Sicko three years ago. Within hours, APCO
Senior Vice President William Pierce sent O'Dwyer an email to challenge
my credibility because of my failure to disclose Health Care America's
original incarnation. He's right --partially. I should have pointed out
in the book that APCO repurposed Health Care America for the insurance
industry and other special interests who were concerned that Sicko
might lead to reforms that would threaten their profits, too. I would
have disclosed it if I had known about it. Unlike PR people who practice
the dark arts of PR, I had no intention of misleading anyone.

Now, Even More Info About "Health Care America"

After hearing from O'Dwyer, I discovered even more about Health Care
America than I had recalled. I came across a couple of interesting
articles and a press release from 2006 that Pierce had sent to the
media. (He was listed as the organization's media contact, although he
was an employee of APCO during the entire brief existence of Health Care
America. If you called the number on the press release, you would have
reached Pierce at his APCO office.) I also found Health Care America's
federal tax returns for 2006 and 2007, which were helpful in
understanding just how much of a front group it really was.

In a press release dated April 6, 2006, Pierce announced that Health
Care America -- which he described as a non-partisan, non-profit
organization --had "opened for business as a champion for common-sense
solutions to improving our health care system without furthering
government control."

The Old PR Dodge and Weave

In one of the hardest-working paragraphs of spin I've come across in a long time, the release went on to quote Sarah Berk,
the outfit's executive director, as saying: "We will promote access,
choice, innovation, quality and competition in the U.S. health care
system. And we will highlight how government-controlled systems around
the world limit payment choice, stifle innovation and force thousands to
wait for health care services in the U.S."

(Note to Ms. Berk: Please make plans now to join me next July at the 11th annual Remote Area Medical
Free Health Care Expedition at the Wise County, Virginia Fairgrounds.
If you come early enough, you can help other volunteers scrub and
sanitize the animal stalls where doctors and nurses treat the thousands
of patients who wait for a year to get the care they need, but cannot
afford in the United States of America. Be forewarned, however. The
experience might force you to consider another line of work, as it did
for me when I went to
Wise County in 2007. I knew then that my days as a spinmeister for the insurance industry were numbered.)

The release did not disclose that Ms. Berk had recently left the
American Hospital Association where, according to a story in Roll Call,
she was director of "grassroots" advocacy and federal relations. Roll
Call also reported that she earlier had "worked on health issues" for
former Sen. Rick Santorum (R-Pennsylvania).

So what were the common-sense solutions Health Care America promised
to champion? Well, according to Roll Call, Ms. Berk "declined" to talk
about them.

"We're not there yet," Roll Call quoted her as saying. "We're not here to get in the weeds on issues."

That was not the only declining she did that day. According to Roll Call, "Berk declined to name any specific companies or groups that were backing (Health Care America)." Oh, well.

Roll Call did disclose a tidbit that the Pierce's press
release did not: "Health Care America is represented by public affairs
firm APCO Worldwide and is currently leasing office space from APCO."
One has to wonder how much space APCO's front group leased from APCO.
Berk was identified as the only employee, although she was quoted in Roll Call as saying that she planned to hire at least one other person within three months.

Undisclosed Income Source, Mysterious Expenditures, Virtual Offices ...

According to the Form 990 Health Care America filed with the IRS for
2006, it took in $822,298.00 from undisclosed sources. Of that, $142,500
was paid out in compensation, presumably to Ms. Berk, and $9,000 was
spent for "occupancy." Accounting and legal fees totaled nearly $47,000.
By far the biggest expenditure -- $240,000 -- was for "consultant
services." One has to wonder how much of that went to APCO.

Health Care America's Form 990 for 2007 disclosed that Ms. Berk was
even more handsomely rewarded for her work during the second and
apparently final year of the organization's existence (I could not find a
Form 990 for any subsequent year), one presumes because she apparently
never got around to hiring anyone else and consequently had to work an
average of 60 hours a week, or so she claimed. She was paid $197,917 in
2007. Legal and accounting fees skyrocketed to more than $80,000, and
the amount spent for "occupancy" jumped to $15,870 in 2007.

One has to wonder who got that $15,870. In the 2006 Form 990, Ms.
Berk listed her office address as 1455 Pennsylvania Avenue, N.W., Suite
400, Washington, D.C. 20004. That is not where APCO is located. In fact,
that is the address of a "virtual office" at the Willard Office
Building. Well, of course. How appropriate. Why would a front group need
a real office?

The Web site for the virtual office at the Willard lists these
amenities: a prime business address; a "live" receptionist; a lobby
greeter, a business support center, a client drop-off/pick-up point; and
mail forwarding, all for $125 a month. That's a heck of a deal for an
"office" in the heart of arguably the most important city on the planet.
Note, however, that you will have to pay extra to have your
organization's name in the lobby directory and to actually use a real
office or conference room. You can rent a real office for $10-$35 an
hour, which for some reason reminds me of the fleabag motels I've heard
about that rent rooms by the hour. Make no mistake, though, the Willard
is no fleabag. Here's a fun fact, noted on the Web site for Suite 400:

The Willard Office Building is nestled between the famous
Willard Intercontinental Hotel, where the term 'lobbyist' was coined,
and the Occidental Restaurant, where D.C.'s power brokers negotiate
deals over fabulous American fare."

Go ahead. Google the address. You'll find that oodles of
organizations claim to occupy Suite 400. Let's hope that all those folks
don't show up for work on the same day.

Operating Front Groups Isn't Criminal, Just Shameful

While the Forms 990 disclosed some interesting information, they
didn't disclose the details that would be most helpful in determining
who is really behind Health Care America. The government doesn't require
such disclosure, even though front groups play a major role in
persuading people to think the way the groups' financiers want them to
think and to do what they want them to do, such as disrupting
Congressional Democrats' town hall meetings. The ultimate goal, of
course, is to influence public policy.

"Where's the felony Potter is saying took place?" Pierce asked O'Dwyer.

There was no felony (that I have personal knowledge of), and I never
said that anyone at APCO had committed one. That's the problem. Setting
up and operating front groups -- and not having to disclose who is
behind them -- is shameful and, according to the code of ethics of the Public Relations Society of America, unethical. But it's perfectly legal.

So APCO, I've apologized for failing to disclose something I didn't
know when I wrote Deadly Spin. Now it's your turn. How about you
apologizing to the American people for the role you played in making it
necessary for me to write the book in the first place.

P.S.: I just received a message from an APCO spokesperson who wrote
to chastise me for writing that the insurance industry would "push Moore
off the cliff" in a worst-case scenario. "You know there was never any
suggestion to do anyone personal harm," she wrote. Yes, I knew that and I
wrote that. She should read the book. Here's what I wrote on page 38 of
the chapter about Sicko:

"Tuffin and Schooling wrapped up their presentation with a 'worse-case scenario' plan. If Sicko
showed signs of being as influential in shaping public opinion on
health care reform as An Inconvenient Truth had been in changing
attitudes about climate change, then the industry would have to consider
implementing a plan 'to push Moore off the cliff.' They didn't
elaborate, and no one asked what they meant by that. We knew they didn't
mean it literally--that a hit man would be sent to take Moore out.
Rather, an all-out effort wuld be made to depict Moore as someone intent
on destroying the free-market health care system and with it, the
American way of life."

The APCO spokesperson denied the firm had done research on Moore's
family and said APCO "did not attempt to suppress turnout for the
movie." I'll let the PR plan, which I first discussed on Bill Moyers
Journal in July 2009, speak for itself. Moyers' staff obtained copies
of May 2007 and June 2007 versions of the PR plan developed by APCO and
AHIP. To view the interview and PDF versions of the documents, click this link.

P.P.S: I also want to apologize to Moore for not disclosing until now
that, while I was still working for the insurance industry, I traveled
as an industry spy to his hometown of Bellaire, Michigan, to attend the
official U.S. premiere of Sicko on June 16, 2007. Moore and I
actually met that day, although he doesn't know it. (I didn't tell him
who I was or who I worked for). The picture accompanying this blog,
taken at a pre-screening reception by another movie-goer, shows me on
Moore's left and my son, Alex, on his right. Alex, who has always been a
big fan of Moore's, traveled with me on the reconnaissance mission.
Moore even autographed a Sicko poster for Alex. It's quite a momento.