Crimes Against Liberty Page 21

  A year after the dismissal, Todd Gaziano, a member of the U.S. Commission on Civil Rights, told the Washington Times he believes “a racist application of the voting rights laws may have been at play” in the decision to dismiss the case. Gaziano said he “wanted to believe” there were “wrongheaded but not racist reasons” leading to the dismissal, but “there apparently is a culture in the civil rights division” of the Justice Department where section chiefs and other supervising attorneys “don’t believe the voting rights laws should ever be enforced against blacks and other minorities.” If there were a “good reason for something (dismissal), and the reason has been called into question, a decent law enforcement agency . . . would want to provide the reasonable explanation—and they still haven’t done that.” Additionally, the DOJ refuses to allow the commissioners to interview key department employees they have subpoenaed and others.74

  Chris Coates, the DOJ career voting section chief, reportedly shocked his coworkers at his going-away luncheon by reciting a written defense of his decision to file the case against the NBPP members. In the memo, Coates said he did his best “to enforce all our voting statutes for all Americans, and I leave here with my soul rested that I did the right thing to the best of my ability.” Republican congressman Frank Wolf, speaking before the Commission on Civil Rights, said, “Although the Attorney General will not allow the career attorneys to testify before this commission, I believe this anecdote helps to convey the ardent opposition of the department’s career attorneys to the dismissal of this voting rights case.” Wolf called on the Attorney General to comply with the subpoenas and permit the career attorneys to testify.75

  Christian Adams, a trial attorney with the DOJ’s voting rights section, later resigned over the government’s refusal to prosecute the case or to allow him and his colleagues to testify before the commission despite being subpoenaed. In his resignation letter, Adams cited the “explicit federal statute” upon which the subpoena is based. He also invoked the increasing belligerence of the NBPP defendants toward the attorneys who brought the case, and his intimate knowledge of “the criminal character and violent tendencies of the members of the New Black Panther Party.”76

  Adams later made the explosive allegation that the Justice Department had dismissed the case because under Holder, it simply refuses to prosecute voting rights cases when the victims are white. As Adams ominously noted, the dismissal “raises serious questions about the department’s enforcement neutrality in upcoming midterm elections and the subsequent 2012 presidential election.”77

  The New Black Panther Party’s methods are hardly worse than those of the Obama administration. Though Obama doesn’t use a nightstick to intimidate people from voting, his subordinates protect those who do. Though Obama doesn’t shove a gag into his opponents’ mouths, he presides over agencies that are furiously searching for ways to silence his critics. He talks a good game of transparency while using secretive and corrupt methods to pass legislation; he speaks of openness, while avoiding questions and sometimes mocking the once starry-eyed White House press corps; and he insists on bipartisanship while White House operatives troll the Internet to malign and snitch on everyday citizens who dissent from his agenda. It is no wonder his cynical, ruthless administration has ushered in among Americans a seething discontent with the governing majority in Washington.

  Chapter Eight

  OBAMA THE IMPERIOUS

  CRIMES AGAINST THE PRIVATE SECTOR, PART 1

  Obama’s assault on the private sector began early in his term. His main tactic was pitting people against people and groups against groups with unprecedented stridency. He couldn’t just push for a “fairer” tax system; he first had to vilify lobbyists, “special interests,” the wealthy, and corporate America. When he called for an end to tax breaks for U.S. corporations doing business abroad, he blamed “a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.”

  While advocating almost any legislation, Obama identified some nefarious, private-sector villain he claimed needed to be put in line. Introducing his plan to revamp the student loan program, he said, “We have a student loan system that’s rigged to reward private lenders without any risk.” During his efforts to strong-arm a restructuring of Chrysler, he accused the firm’s secured creditors of 201 seeking “an unjustified taxpayer-funded bailout”—when they were just trying to defend their legal rights that the administration was trampling in favor of Chrysler’s union. He accused credit card companies of dishonestly imposing “all kinds of harsh penalties and fees,” and he lambasted large U.S. companies for diverting some of their profits overseas. Jade West, a lobbyist for the National Association of Wholesale-Distributors commented, “It is traditional class-warfare rhetoric. It’s a little bit frightening.”1

  DEMONIZING BIG PHARMA

  When ObamaCare was being debated, Obama was determined not to repeat the mistakes of the Clintons, who had been outmaneuvered by opponents of socialized medicine in the early nineties. One thing he would do more effectively was to shore up support, or at least nullify major opposition from, certain sectors such as the American Medical Association and pharmaceutical companies. He was willing to do whatever it took to pass healthcare, including resorting to the bullying and bribery described in previous chapters.

  While campaigning, Obama talked tough against the drug companies, saying, “We’ll tell the pharmaceutical companies ‘thanks, but no, thanks’ for the overpriced drugs—drugs that cost twice as much here as they do in Europe and Canada.”2 But in summer 2009, he reached a mutually shameful deal with the drug-makers’ main lobbying group, Pharmaceutical Research and Manufacturers of America (PhRMA), whereby drug-makers agreed to cut drug costs by $8 billion a year for ten years in exchange for Obama’s commitment not to further cut Medicare’s payments to them and not to push for importing drugs from Canada3—directly contradicting his campaign promise. “It’s got to be a little awkward,” said Senator Tom Carper, in reference to Obama’s about-face.4

  An unlikely source, the Left-wing website the Huffington Post, exposed the shady deal’s details based on an internal memo “prepared by a person directly involved in the negotiations.” The White House agreed to oppose any congressional attempts to push for lower drug prices or to import drugs from Canada. It also pledged “not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements.” Both PhRMA and the White House denied the memo’s accuracy, but critics nevertheless accused Obama of reneging on his promises both to use government to reduce drug costs to Medicare and to conduct his negotiations in the open.5

  Other mainstream media sources cast further suspicion on the White House’s denial of a backroom deal. The New York Times’ David Kirkpatrick reported that the White House “assured drug makers that the administration stood by a behind-the-scenes deal to block any congressional effort to extract cost savings from them beyond an agreed-upon $80 billion.” Reports that the White House wasn’t standing behind the deal led Billy Tauzin, a former congressman and PhRMA’s lead lobbyist, to publicly confirm a deal had been struck: “We were assured: ‘We need somebody to come in first. If you come in first you will have a rock-solid-deal. . . . Who is ever going to go into a deal with the White House again if they don’t keep their word? You are just going to duke it out instead.” The Times reported that White House deputy chief of staff Jim Messina had confirmed Tauzin’s version of the deal.6

  Tauzin was firm about the White House’s involvement in the deal. He said the White House had tracked negotiations from the beginning and had “assented” to the deal’s basic components: not negotiating prices or importing drugs from Canada in exchange for the $80 billion—“no more, no less. Adding other stuff changes the deal.” Tauzin even said he met twice at the White House on the matter with top Obama operatives Messina, Rahm Emanuel, and Nancy-Ann DeParle. “They blessed the deal,” said Tauzin.
7

  But another complication developed. House Democrats were miffed at being cut out of the negotiations, though their counterparts in the Senate Finance Committee (primarily represented by Senator Max Baucus) had been included. Raul M. Grijalva, the Democratic co-chairman of the House progressive caucus, called the deal “disturbing.” “We have all been focused on the debate in Congress, but perhaps the deal has already been cut. That would put us in the untenable position of trying to scuttle it,” he said.

  Grijalva was concerned Congress was being ignored in favor of lobbyists, and that this might set a precedent for the Obama White House to follow on other issues. “It is a pivotal issue not just about health care,” said Grijalva. “Are industry groups going to be the ones at the table who get the first big piece of the pie and we just fight over the crust?” Adding further tension, House Speaker Nancy Pelosi reportedly asserted the House was not bound by any deals between the White House and the Senate.8

  The White House was forced to distance itself from its own deal amidst public criticism after the terms had been leaked. Communications Director Linda Douglass, for example, confirmed PhRMA’s commitment to reduce drug costs by $80 billion but, incredibly, denied PhRMA was promised anything in return—as if the $80 billion were a spontaneous act of altruism. “The issue,” claimed Douglass, “was not discussed.”9

  Her denial contradicted Tauzin’s account as well as the statements of White House press secretary Robert Gibbs. According to ABC News’ Political Punch, Gibbs tacitly confirm the deal when he told CNN’s Ed Henry, “We feel like $80 billion is—is an appropriate amount.” When Henry asked if “there is a deal that you won’t squeeze any more?” Gibbs responded, “Well, I hate to blow our cover here, but we announced it publicly.” When Henry asked why the White House had privately told Democratic senators there was no such deal, Gibbs replied, “I don’t know where that’s coming from. I don’t know what that’s being based on.”10

  Given Obama’s reputation for brilliance, it’s surprising he failed to foresee the drug companies would raise their prices in anticipation of the promised cost cutting. As the Boston Globe reported in November 2009, “Big Pharma has taken savings off the table. A new AARP analysis has found that drug companies raised their prices for prescription drugs by 9.3 percent over the last year, amounting to $10 billion in revenues. That is $2 billion more than the promised annual cost cuts.”11

  One explanation of the drug-makers’ apparent double-cross is that perhaps they had never agreed to any cost cutting measures at all. In other words, Obama might have merely been trying to make it appear he had extracted concessions to give him cover for a unilateral bribe—promising not to negotiate prices or import drugs from Canada in exchange for PhRMA’s support for ObamaCare. Perhaps that explains why drug companies had given up their longstanding support for Republicans to endorse Obama. 12

  Regardless of what PhRMA had ultimately promised, the deal showed the White House to be a hardball player of Chicago-style politics, willing to violate campaign pledges or political deals to accomplish its goals. It was all on display here. Obama promised he would make no deal with pharmaceuticals, and he reneged. He presented Big Pharma’s support of the bill as a result of some magical conversion they’d undergone toward his socialized medicine scheme, when in fact they were simply bought off. He said he would operate openly, but this deal was so secretive even his own staff couldn’t get their stories straight, and his congressional allies were kept out of the loop. He said he would reduce the influence of lobbyists. Instead, he elevated their influence on a deal involving one-sixth of the U.S. economy, giving unelected people he had previously demonized a bigger seat at the table than the elected members of the House of Representatives, thereby empowering the “special interests” he routinely decried.

  There is also a lesson in this story for drug companies and others who deal with Obama: as soon as he gets what he wants and doesn’t need you anymore, you’re expendable. For shortly after the deal was allegedly struck, the drug companies found themselves targeted again by the administration—this time over exclusive rights to produce drugs called “follow-on biologicals (FOB)” that treat certain major diseases. Biologicals are not, according to a FOX News report, drugs like Prozac, which the company patents for a period of years until other companies are allowed to replicate generic forms of the drug. They are among a group of some 600 “cutting-edge, new-wave drugs derived from living plant and animal cells and can cost upwards of $20,000 to $25,000 per year.”

  So far Congress had supported “data exclusivity” for these biologicals for twelve years, when other companies could not develop similar versions. The administration was pushing to reduce the data exclusivity period to seven years, but the drug companies were resisting, based in part on the enormous cost of bringing a biological to market—an average of $1.2 billion, which doesn’t count another $250 to 500 million to build a facility and manufacture the drug.13

  Eventually, the drug companies threatened to withdraw their support for ObamaCare if the White House persisted. Billy Tauzin said, “We are letting everyone we know hear that we could not support the bill if this happens.” PhRMA senior vice president Ken Johnson added, “This well-intentioned effort will ultimately fail if it becomes a roadblock to medical progress in America.”14 The administration must have taken Tauzin’s and Johnson’s threats seriously, as the final ObamaCare bill did not reduce the twelve year data exclusivity period.15

  WAR ON INSURANCE COMPANIES

  The drug companies were lucky enough to strike a deal with Obama early, thus avoiding his presidential wrath. The insurance companies, in contrast, became the quintessential bogeyman. Even before he realized how unpopular socialized medicine was in this freedom loving country, Obama had demonized health insurers. But after his healthcare scheme encountered heavy resistance, he ratcheted up his assault on them, reframing his entire healthcare reform as “insurance reform.” At one point, he implied Americans didn’t understand the implications of their own preferences. After acknowledging some polls revealed as many as 80 percent of Americans were satisfied with their health insurance, Obama scoffed, “The only problem is that premiums have been doubling every nine years, going up three times faster than wages.”16

  In addition to deliberately inflating the number of uninsured as described in chapter three, Democrats bludgeoned health insurance companies for their “obscene profits.” House Speaker Nancy Pelosi declared, “I’m very pleased that [Democratic leaders] will be talking, too, about the immoral profits being made by the insurance industry and how those profits have increased during the Bush years.” Congressman Chris Van Hollen argued, “Keeping the status quo may be what the insurance industry wants. Their premiums have more than doubled in the last decade, and their profits have skyrocketed.” The vilification reached something of a crescendo with a MoveOn.org ad claiming, “Health insurance companies are willing to let the bodies pile up as long as their profits are safe.”17

  During the healthcare debate, Obama vehemently denied he favored government-run healthcare. But his right-hand lady, Health and Human Services secretary Kathleen Sebelius, was not so circumspect in May 2009, when she told a House panel that a government-run plan was needed to exert better control over private insurers that often allegedly fail to serve the public interest. She said, “The president is committed to—and I’m committed to—a design that needs to level the playing field, and it’s on two fronts.”

  The two fronts were a more regulated private sector and a government-run public option insurance plan, which Obama was selling at the time under the Orwellian argument that it would enhance competition.18 Obama claimed the public option was “an important tool to discipline insurance companies,” which “have been spending more time thinking about how to take premiums and then avoid providing people coverage than they have been thinking about ‘how can we make sure that insurance is there, healthcare is there, when families need it.’”

  Obama also p
romoted the myth that Medicare and other government-run plans have lower administrative costs than private healthcare plans, saying if the government-run program “is able to reduce administrative costs significantly . . . I’d like the insurance companies to take note and say, ‘Hey, if the public plan can do that, why can’t we?’”19 In her book The Top Ten Myths of American Health Care: A Citizen’s Guide, Sally Pipes cites this as the very first myth. Pipes demonstrates the inaccuracy of studies purporting to show lower administrative costs for Medicare, studies that also fail to account for Medicare’s enormous hidden costs. For example, unlike the Medicare Trustees report, private healthcare providers include such items as marketing costs and managers’ and administrators’ salaries as administrative expenses. Additionally, because of its low reimbursement rates, Medicare passes off a huge portion of its costs to private payers .20

  It was against this disgraceful backdrop that Obama, during a prime-time news conference in July 2009, launched his assault on insurance companies for making too much money. “There have been reports just over the last couple of days of insurance companies making record profits, right now,” he declared. “At a time when everybody’s getting hammered, they’re making record profits, and premiums are going up. What’s the constraint on that?...Well, part of the way is to make sure that there’s some competition out there.”

  The entire campaign against insurers was based on a lie—insurance industries profits were not at a record high. The St. Petersburg Times’ fact-checking operation, PolitiFact.com, found that United-Health Group, one of the largest publicly traded health insurance companies, had net income for the previous quarter of $859 million, which was far short of the $1.23 billion it had earned during the same quarter in 2007. Rating Obama’s claims as “false,” Polit-Fact reported, “We reviewed the income statements of the other largest publicly traded health insurance companies—WellPoint, Aetna, Cigna, Humana and Coventry Health Care—and found similar trends.”21