More than 100 top regulatory officials represented industry as lobbyists, lawyers… – Denver Post

Mon, 24 May 2004

To understand why government policies affecting healthcare, drug safety, food safety and the environment appear to promote industry interests at the expense of public safety and health, the Denver Post has investigated the administration’s top regulatory officials (excerpt below). Anne Mulkern found that 100 top government regulators appointed by President Bush are advocates for the industries they are supposed to regulate.

“In at least 20 cases, those former industry advocates have helped their agencies write, shape or push for policy shifts that benefit their former industries. They knew which changes to make because they had pushed for them as industry advocates.”

Daniel Troy, FDA’s chief counsel was a pharmaceutical company litigator who sued the FDA.

Thanks to Troy’s efforts, “The FDA is now in the business of helping lawsuit defendants, specifically the pharmaceutical companies.” Troy has aggressively invoked FDA’s pre-emption authority, intervening in court cases brought against pharmaceutical companies. The Post reports that Troy even invited pharmaceutical companies to “pitch us lawsuits that we can get involved in.”

“If Troy’s legal position prevails, O’Reilly said, it would be catastrophic for consumers hurt by drugs. He said it would bar cases like the one filed against the makers of fen-phen, the combination of diet medications tied to heart problems. The makers of those drugs are settling with consumers for $14 billion.”

Ann-Marie Lynch, former lobbyist for PhRma–the drug industry’s trade group–is deputy Assistant Secretary for DHHS, setting department policy. Lynch is reported to have blocked a dozen research reports that were critical of drug companies. One such suppressed report found that Bush’s Medicare drug policy would be more expensive and not serve rural areas.

Thomas Scully, a former hospital lobbyist, headed Medicare Medicaid Services until he went to an investment company that represent Medicare providers. The Denver Post reports that “Eight months after Scully arrived at the Medicare and Medicaid agency, it moved to settle final claims involving HCA Inc., a hospital chain that was the biggest member of Scully’s former employer, the Federation of American Hospitals. HCA Inc. faced allegations it fraudulently overbilled the government for Medicare cases.”

The Post further reports that Scully had settled the case for a pittance, protecting the company “from a full review of its cost reports and the triple- damage civil fines that can be imposed in fraud cases.” John R. Phillips, an attorney who represented whistle-blowers in the case, said “The $250 million was a total sellout by Scully, who totally negotiated it behind Justice’s back.”

Charles Lambert, a long time lobbyist for the National Cattlemen’s Beef Association former, was installed in the US Dept. of Agriculture as a food safety regulator. Lambert opposed meat labeling to protect the public against Mad Cow disease.

Jeffrey Holmstead, a lawyer who oversees the Environmental Protection Agency division governing air pollution, formerly worked for a firm that represents utility companies, which are among the biggest air polluters. At least 12 paragraphs of the proposed rule changes to air pollution under Holmstead “were identical to or closely resembled a Sept. 4, 2003, proposal given to the Bush administration by Latham & Watkins, a law firm that represents utility companies.” The Post reports that “168 of 236 Western-based plants, including those in Colorado, would not be required to reduce those emissions at all.” Even EPA Administrator Mike Leavitt objects to how this language was lifted.

J. Steven Griles, a veteran energy industry lobbyist, was appointed as the Department of Interior’s second-highest official in June 2001. “Griles earned $585,000 a year as a lobbyist, representing an array of oil, gas and other energy interests. As Interior’s deputy secretary, he continues to receive $284,000 a year for four years to pay him for the value he had created for the firm by bringing in clients.”

His tenure was labeled an “ethical quagmire” by the agency’s inspector general, who stated: “Mr. Griles’ lax understanding of his ethics agreement and attendant recusals, combined with the lax dispensation of ethics advice given to him, resulted in lax constraint over matters in which the deputy secretary involved himself.”

The Denver Post reports that according to government / legal experts, government ethics standards are part of the problem because they don’t fully address the kind of issues that now permeate Washington. Whereas the rules focus mainly on direct financial conflicts, other, more nuanced conflicts–such as future positions and earnings–aren’t addressed.

“There are so many ways around, over and under these (ethics) bans .. they almost never work,” said Paul Light, who for decades has studied the appointment process for the Brookings Institution, a think tank in Washington. “There are more screen doors than steel doors.”

No one is enforcing ethics rules to prevent the revolving door through which industry advocates do a stint as regulators, promoting those industries’ interests, then return to industry as high paid lobbyists.

Contact: Vera Hassner Sharav
Tel: 212-595-8974,1413,36%7E11676%7E2164693,00.html

Sunday, May 23, 2004
When advocates become regulators

President Bush has installed more than 100 top officials who were once lobbyists, attorneys or spokespeople for the industries they oversee.
By Anne C. Mulkern

Washington – In a New York City ballroom days before Christmas, a powerful Bush administration lawyer made an unprecedented offer to drug companies, one likely to protect their profits and potentially hurt consumers.

Daniel E. Troy, lead counsel for the U.S. Food and Drug Administration, extended the government’s help in torpedoing certain lawsuits. Among Troy’s targets: claims that medications caused devastating and unexpected side effects.

Pitch us lawsuits that we might get involved in, Troy told several hundred pharmaceutical attorneys, some of them old friends and acquaintances from his previous role representing major U.S. pharmaceutical firms.

The offer by the FDA’s top attorney, made Dec. 15 at the Plaza Hotel, took the agency responsible for food and drug safety into new territory.

“The FDA is now in the business of helping lawsuit defendants, specifically the pharmaceutical companies,” said James O’Reilly, University of Cincinnati law professor and author of a book on the history of the FDA. “It’s a dramatic change in what the FDA has done in the past.”

Troy’s switch from industry advocate to industry regulator overseeing his former clients is a hallmark of President Bush’s administration.

Troy is one of more than 100 high-level officials under Bush who helped govern industries they once represented as lobbyists, lawyers or company advocates, a Denver Post analysis shows.

In at least 20 cases, those former industry advocates have helped their agencies write, shape or push for policy shifts that benefit their former industries. They knew which changes to make because they had pushed for them as industry advocates.

The president’s political appointees are making or overseeing profound changes affecting drug laws, food policies, land use, clean-air regulations and other key issues.

Government watchdogs call it a disturbing trend, not adequately restrained by existing ethics laws.

Among the advocates-turned-regulators are a former meat-industry lobbyist who helps decide how meat is labeled; a former drug-company lobbyist who influences prescription-drug policies; a former energy lobbyist who, while still accepting payments for bringing clients into his old lobbying firm, helps determine how much of the West those former clients can use for oil and gas drilling.

“When you go to work in lobbying, it is clearly understood and accepted that your job is to advocate for the interests of those who hired you,” said Terry L. Cooper, a University of Southern California ethics and government professor. “When you go to work in government, you are supposed to be responsible for upholding and maintaining whatever you can identify as the public interest.”

The Bush administration says the regulators were chosen for their abilities.


Click here for profiles of advocates-turned-regulators.

“The president appoints highly qualified individuals who make their decisions based on the best interests of the American people,” said White House spokesman Jim Morrell. “Any individual serving in the administration must abide by strict legal and ethical guidelines, including full disclosure of past lobbying activities.”

Six of the former industry advocates have faced ethics investigations or resigned amid conflict-of-interest charges. Those and at least 14 others have been lambasted by public-interest groups.

Government ethics standards are part of the problem because they don’t fully address the kind of issues that now permeate Washington, Cooper and some inside government say. The rules focus mainly on direct financial conflicts. Other, more nuanced conflicts aren’t addressed

“There are so many ways around, over and under these (ethics) bans … they almost never work,” said Paul Light, who for decades has studied the appointment process for the Brookings Institution, a think tank in Washington. “There’re more screen doors than steel doors.”

A March 16 report from the Interior Department’s inspector general, for example, concluded that department’s “byzantine” conflict-of-interest rules were “wholly incapable” of addressing ethical questions involving a former energy lobbyist, J. Steven Griles, as the department’s No. 2 official.

The report called the department’s ethics system “a train wreck waiting to happen.”

Bringing bias to a federal job isn’t new. Presidents of all political persuasions have appointed people who shared their party’s values. As president, Bill Clinton peppered the federal bureaucracy with Democratic state officials, lawyers and advocates from various environmental or public-interest groups. Only a handful of registered lobbyists worked for Clinton, however.

Bush’s embrace of lobbyists marks a key difference because it allows “those who are affected by the regulations to determine what the ground rules should be,” said David Cohen, co-director of the Advocacy Institute, which helps teach nonprofits how to lobby in Washington.

While previous Republican presidents hired lobbyists, “the Bush administration has made it rise in geometric proportions,” Cohen said, meaning Bush is “capturing the instruments of government and using them for the ends” that favor Bush’s political supporters.

“In the Bush administration,” said U.S. Sen. Joe Lieberman, D-Conn., “the foxes are guarding the foxes, and the middle-class hens are getting plucked.” Republicans and their lobbying allies reject the idea that industry is embedded in the administration.

“Foxes? No,” Vice President Dick Cheney told The Denver Post. “I think we have a good track record.” The clout of industry is balanced by the power of labor unions, trial lawyers and public-interest groups, said Jerry Jasinowski, chairman of the National Association of Manufacturers. “The notion that somehow business gets everything and we’ve gotten a free ride is absurd,” he said.

Still, the lobbyists-turned-policymakers control or influence health care, food safety, land use, the environment and other issues touched by government.

Ann-Marie Lynch
The drug-industry lobbyist who fought price controls joined the Health and Human Services Department and has helped drug companies avoid the limits.

Top aides in the Department of Health and Human Services provide analysis and advice to the president on key consumer issues, including prescription-drug policies. In doing so, they consider the needs of pharmaceutical companies seeking revenue for future research, and consumers struggling to afford increasingly costly medications.

In June 2001 Bush installed Ann- Marie Lynch, a lobbyist for the drug- company trade group Pharmaceutical Research and Manufacturers of America, to help set those policies. As a lobbyist, Lynch fought congressional attempts to cap prices for drugs. Price controls, she argued, would hamper medical innovation.

Thirteen months after Lynch became deputy assistant secretary in the office of policy, her division issued a report that praised brand- name drugs. It warned that “government-controlled restrictions on the coverage of new drugs could put the future of medical innovation at risk and may retard advances in treatment.”
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Staff writer Anne C. Mulkern can be reached at 202-662-8907.

See full report :,1413,36%7E11676%7E2164693,00.html

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