News Corp Supplies Information, Defies Accountability

WHO IS THIS GIT?

If you can't place the face of the shar pei in the photo above, you're not alone. His is not exactly a household name, but it should be. Just as most Americans don't realize that we get almost ALL of our news and information from a grand total of only six companies, most of us don't know who runs those companies, or realize how much their personal, private interests influence our world view. 

So allow me to introduce you to one Rupert Murdoch, octogenarian and media mogul extraordinaire. Murdoch is the Chairman and CEO of News Corporation, a.k.a. News Corp, and he's on our radar this week because one of his British companies, the tabloid paper News of the World, has just been caught hacking into thousands of voicemail accounts in pursuit of tabloid fodder. Had they stuck simply to the voicemails of celebrities, the scandal would likely not have reached across a desk, let alone the pond. But News of the World employees crossed a line of social acceptability when they reportedly also hacked the accounts of high profile crime victims, including the families of victims of terrorist attacks, even going so far as to delete messages that could arguably have affected the outcome of criminal trials.

WHAT DOES THE MEDIA DO WHEN THE MEDIA IS THE NEWS?

The story would be scandalous enough on its own, but taking into account News Corp's massive influence on the media, the repercussions are somewhat overwhelming. To give you an idea of Murdoch's scope of influence, News Corp is the parent company of all FOX tv stations (including FOX News), 20th Century FOX Studios, the New York Post, the Wall Street Journal, National Geographic, TV Guide, Harper Collins Publishers, and MySpace...just to name a few. You can see a list of News Corp's holdings here.

This one man's decisions reach into pretty much every household in the U.S., not to mention the rest of the world, so how he runs his ship is a matter of some importance. Which might lead one to wonder why his is not a household name. The answer, of course, is that when you run one of the six major media conglomerates, you get to decide exactly how much you want, or don't want, your name to appear in the news. But a scandal of this size is hard to squelch, even if you own the companies reporting on it.

Murdoch, of course, has responded by insisting that the hacking was the result of a few rogue reporters, and has refused to criticize or condemn, let alone fire, News Of The World editor Rebekah Brooks.

The move highlights a tendency of the media mogul to protect his own, industry watchers say....

"He will reward loyalty with loyalty," said Steven Barnett... "It's a case of being one of us."

"If she has 100 percent backing from Rupert Murdoch, which is the word coming out of News Corp, then clearly she is untouchable and more importantly it shows that Murdoch himself thinks the company is untouchable," he adds.

Murdoch has long been criticized by insiders for mixing business with both family and politics, and Brooks is a longtime friend of British Prime Minister David Cameron, whose campaign can credit support in Murdoch's press for much of its success. And though his son and presumed heir James Murdoch has announced the closing of News Of The World, much speculation remains that the end of one Murdoch tabloid is simply the beginning of another. 

Shutting News of the World looks like such a grand gesture. In fact, it's another attempt to look like something is being done -- while in fact changing nothing fundamental within News International.

Shutting the 168-year-old paper isn't a great sacrifice (although, since it was Murdoch's first UK paper, he may feel sentimental about it); it's just bowing to the inevitable. No one wanted to advertise, no one wanted to buy and precious few people wanted to appear in the paper: better to shoot it and put it out of its misery.

But the fact that the URLs for SunonSunday.com and SunonSunday.co.uk were reserved fully two days ago suggests that News International may just be planning to switch its employees over to a "new" paper just like the "old" paper -- but with a new name. This rebranding will fool no one. The fact that the teams are still headed by Rebekah Brooks means nothing will have changed....

Indeed, this smacks of the old tactic of one business committing fraud, declaring bankruptcy, and closing - only to re-open under a new name with a free pass to continue the same old business model. This may be a tried and true business tactic, but it leaves one to wonder, should Murdoch's companies really be trusted as the primary source of so very much of our information?

UPDATES: 

7/11/2011:  Melissa Bell of the Washington Post updates us on the rumors surrounding the scandal, including reports that journalists hacked the voicemails of 9/11 victims as well as the Prime Minister.

7/12/2011: Jonathan Schell provides an in-depth analysis of the scandal and its implications, both social and political, via CNN:

The Murdochs call News Corporation a journalistic enterprise. In fact, it is, first, an entertainment company, with the bulk of its revenue coming from its film and television holdings. Second, and more importantly, it is a propaganda machine for right-wing causes and political figures.

 7/13/11: The FBI has reportedly opened an investigation into News Corp in response to employees allegedly hacking into the voicemail accounts of 9/11 victims. 

7/17/11: Despite efforts to stem backlash from the scandal by resigning her position with News Corp, former NOTW editor Rebekah Brooks has now been arrested and is being held on charges related to corruption and conspiracy to intercept communications.

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What The Colbert Super PAC Means To You

Special Interests -WE HATES THEM 

PACS AND SPECIAL INTERESTS 

In a country split politically down the middle there is one thing nearly everyone can agree on; special interests are ruining American government. We may not all agree on exactly what constitutes a "special" interest, but most of us are savvy enough to know that they exist, that they wield political power, and that they don't represent the needs or opinions of the general public.

In American government today, there is only one surefire way to increase political power - spend money. A LOT of money. Special interests (at least the ones we should be concerned about) know this, and they use it to their absolute advantage. They are experts at two things: fundraising and lobbying. They know how to get their hands on money, and they use their considerable financial resources to throw their political weight around in order to influence politicians to establish policies that favor them. The result is the passing of laws that place the desires of a few over the needs of the many.

This is what campaign finance reform is all about. The campaign finance reform movement in America is generally motivated by an attempt to limit the political influence of special interest groups on public elections and public policy. Campaign finance reform uses two primary methods to accomplish this; (1) by limiting the amount of money that individuals and groups can donate to a particular campaign, and (2) by requiring political campaigns to disclose exactly who has donated how much money to them, making that information available to the public. So theoretically, voters can access that information to determine the degree to which a particular political act or candidate has been motivated or supported by special interests.

LIMITING AND DISCLOSING SPECIAL INTEREST MONEY... 

Special interests, of course, are not big fans of campaign finance reform. It is their primary goal in life to find loopholes, ways to contribute massive amounts of money to individual campaigns in order to influence the outcomes of those campaigns. One of the ways they do this is by forming Political Action Committees, or PACs. A PAC is private group of persons, organizations, and/or corporations that work together to influence the outcome of elections. So when you see the word "PAC" in relation to elections, you should think "special interest money." (We have it on good authority that Pac Man is something completely different, so we apologize to those of you who accidentally ended up here because you were procrastinating by googling retro video games.)

The rules for PACs are different from the rules for individuals. An individual may contribute a maximum of only $1000 to a particular campaign. So in order to contribute more, special interest groups form PACs. Technically, any group that either receives contributions or spends over the amount of $1000 in order to influence the result of a federal election is considered a PAC. 

In order to understand what's going on with campaign finance right now, we need a little history on the regulation of PACs. Under the Bipartisan Campaign Finance Reform Act of 2002 (a.k.a. the McCain-Feingold Act):

• The cap on the amount of money any PAC may contribute to any campaign per year was set at $5000.
• The cap on the amount of money any PAC may contribute to any political party was set at $15,000.
• The cap on the amount of money any PAC may contribute to another PAC was set at $5000.
• PACs were required to report all of their financial activities, including donations to specific campaigns, to the Federal Election Committee (FEC), which makes those reports available to the public.
• PACs could spend an unlimited amount of money on "independent expenditures" (think campaign commercials) as long as they did not coordinate the activities of those expenditures directly with the candidate's official campaign (which is why candidates add that annoying "I am ___ and I approved this message" to ads that originate within their own official campaigns)...
• ...However, those "independent expenditures" could only be funded by contributions made to that PAC, which were both limited and reported to the FCC as described above. 

 ...UNTIL NOW 

So those were the rules under which PACs operated...until 2010. Then along came Citizens United v. the FEC in which the Supreme Court voted 5-4 (as divisive as a ruling can be) that corporate funding of independent political broadcasts could not be limited, seeing it as an issue protected under First Amendment freedom of speech.

In theory, that all sounds great. In reality, the bottom dropped out of any effort to limit the political influence of PACs, and therefore of special interests. Several things changed as a result of the Citizens United ruling. Remember those "independent expenditures" that used to be both limited and publicly reported? Well, not any more. Corporations can now pay directly for those activities from their own treasuries, and there's no limit to how much money they can spend doing it. This was the birth of the "super PAC." Super PACs are officially known as "independent-expenditure only committees." They can raise unlimited sums of money from virtually anyone - corporations, organizations, unions, even wealthy individuals. Remember those 6 companies that run pretty much everything? Well, there's no longer any limit to how much money they can throw behind a particular campaign. But at least we the public know who's behind that money...right?

Wrong. Special interests are the kings of loopholes, and their super PACs have found themselves a doozy. Under federal law, non-profit corporations are not required to report the sources of their donations to the super PACs. So let's say you're a big corporation and you want to get one of your board members elected to congress. How do you fund his campaign? Easy. You establish a non-profit corporation (all you have to do is file a few papers with the court), you "donate" a colossal amount of your company's money to that non-profit, and the non-profit turns around and donates all of that money to a super Pac. Quick, easy, anonymous, and best (or worst) of all, anyone can do it. Just ask Stephen Colbert.

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If Brits Don't Want Our Health Care, How 'Bout Canadians?

In a follow up to yesterday's post about Britian's terror over the idea that it might end up with a privatized, "American-style" health care system, today we're turning our gaze northward toward Canada. I mean, surely someone must covet our magnificent medical machine, and if not the Canucks, then who?

I've heard all the same horror stories you have about Canadian health care, but I decided to ignore what "they" say and do some actual investigating of my own when a friend of mine uprooted and moved his entire family, including three small children, back to Canada after many years in the U.S. primarily so that they could once again have full access to affordable medical care. My investigations turned up surprising - and for an American with medical issues, extremely frustrating - results. But The Incidental Economist says it all better than I could in a post summarizing Americans' misunderstanding of Canadian health care, complete with pretty charts and graphs. They point out the following:

Doctor emigration - Despite what you may have heard, doctors are not flocking to the U.S. from Canada - indeed, more doctors move TO Canada from the U.S. than the other way around.

 Patient emigration - Canadian citizens aren't flocking to the U.S. to utilize our magnificent health care. While they acknowledge that wealthy Canadians might prefer to undergo certain rare procedures in American hospitals, the fact remains that the vast majority of Canadians prefer to utilize their single-payer system for the vast majority of treatment options available to them (at little or no cost, mind you).

Doctor satisfaction - Canadian doctors tend to report higher levels of satisfaction with practicing medicine in their country than American doctors do in ours.

Infant mortality - Despite the massive amount of money we spend on our health care, the U.S. continues to have one of the highest infant mortality rates of any industrialized nation - higher than Canada's or Britian's. Incidentally, also higher than Hungary, Taiwan, Cuba, South Korea, and Andorra, wherever that is. 

Rationing (the biggie) - Let's have a word about the process of treatment rationing. One of the horror stories you've probably heard about the Canadian system is that it rations surgical procedures. I hated that idea too, until I learned first-hand that another word for "rationing" is "triage." Their single-payer system does not arbitrarily determine a number of procedures and only allow that many. What it does do is rank the availability of procedures based on their degree of medical necessity. In other words, it might take longer for a patient who needs a hip replacement to get that procedure than it does for, say, a cancer patient to get a tumor removed, because the latter procedure is more immediately life-threatening and therefore takes priority. I don't know about you, but God forbid I ever get cancer, I'd trade a quick hip replacement to get diagnosed, have the tumor removed, and be on the mend in the same week - as another Canadian friend of mine was. Meanwhile my own American family member, diagnosed with the same cancer at almost exactly the same time, waited almost two months for her first surgery, which didn't get it all, and another month for her second. Anecdotal evidence? Sure, but it's damn well enough to get me taking a second and third look at our system.

So to sum up, the Brits don't want our medical system. The Canadians don't want our medical system. Babies born in South Korea have a better chance of survival than ours do. Profit-based medicine is at the root of the vast majority of the billions of dollars we spend every year due to health care fraud, leaving us spending more per capita than virtually any other nation in the world, yet receiving less medical care or coverage. What exactly would it take for us to reconsider privatized medicine in the U.S.?

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Health Care Scare In Britian - Not Socailzed Medicine, But Privatized Medicine

We in the U.S. have a rather uncharming tendency to think that our way is always the "right way," regardless of potential evidence to the contrary, and nowhere is this tendency clearer than in our discussions about national health care. Ask your average U.S. citizen about "socialized medicine" and you'll likely get a response that is almost pathologically hostile to the very concept of taxes paying for medical coverage. We reinforce our distrust of public health care initiatives by recounting horror stories of "someone we know" who was once forced to endure the barbaric overtures of a publicly subsidized medical system, somewhere far away. 

The reality of socialized, or publicly subsidized, medical systems are far less frightening to most of the world - probably because the U.S. is the only industrialized nation in the world that doesn't have one. Indeed, most other countries view our method of "health care for those who can afford it" as the barbaric type. Case in point is yesterday's L.A. Times foreign correspondence article, "British Fear American-Style Health Care":

Ask a Briton to describe "American-style" healthcare, and you'll hear a catalog of horrors that include grossly expensive and unnecessary medical procedures and a privatized system that favors the rich. For a people accustomed to free healthcare for all, regardless of income, the fact that millions of their cousins across the Atlantic have no insurance and can't afford decent treatment is a farce as well as a tragedy.

But critics here warn that a similarly bleak future may await Britain if a government plan to put more power in the hands of doctors and introduce more competition into the NHS succeeds — privatization by stealth, they say.

So frightening is the Yankee example that any British politician who values his job has to explicitly disavow it as a possible outcome. Twice.

"We will not be selling off the NHS, we will not be moving towards an insurance scheme, we will not introduce an American-style private system," Prime Minister David Cameron emphatically told a group of healthcare workers in a nationally televised address last week.

In case they didn't hear it the first time, Cameron repeated the dreaded "A"-word in a list of five guarantees he offered the British people at the end of his speech.

"If you're worried that we're going to sell off the NHS or create some American-style private system, we will not do that," he said. "In this country we have the most wonderful, precious institution and also precious idea that whenever you're ill … you can walk into a hospital or a surgery and get treated for free, no questions asked, no cash asked. It is the idea at the heart of the NHS, and it will stay. I will never put that at risk."

Ironically, citizens of countries with some form of subsidized medicine or universal health insurance which guarantees basic medical care to everyone regardless of medical history or ability to pay are in many ways more informed about the problems of a privatized health care system than we who actually have one tend to be. So regardless of your individual stance on socialized medicine, in the internet age as our world gets ever smaller, it is important for us as global citizens to remember that the "right way" to do something is almost always a matter of perspective...and sometimes we could learn a thing or two from people with a different perspective.

UPDATE 6/15/11 - It seems the Canadians aren't interested in cloning our health care system either.

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The Truth About Health Care Fraud In The U.S.

Health care fraud is a hot topic both in Washington and around the country, as well it should be. But if you bring up the subject of fraud in the health care system at your local town hall meeting (by which of course I mean bar, er, church luncheon) what you will most likely hear is an impassioned diatribe about the various and sundry ways that "entitlement programs" are allowing lazy miscreants to "get rich off the system." The vitriol directed at programs labeled "socialized medicine" or "Obamacare" is as thick as it is pervasive. But take a closer look at where money travels in the U.S. health care system, and you'll find that the vast majority of fraud costing billions of U.S. tax dollars is not perpetrated by individual members of the public, but by the health care system itself. If crap always rolls downhill, then money always rolls into the pockets of corporate health care executives...and a fair percentage of that money is ill-gotten indeed.

Here is the one statistic you most need to know if you are either so brave or so masochistic as to voluntarily enter into a discussion about health care fraud these days: 3% - 10%.  Somewhere in the spectrum that lies between three (3%) and ten (10%) percent of health care claims is the amount of health care fraud that is perpetrated on the consumer side of the fraud equation, according to the Internal Revenue Service (and if anyone knows their numbers, you can be sure it's the IRS). That figure translates to approximately $13.5 billion, which sounds like a lot of money - and it is - but keep on reading, because we're nowhere near the big numbers yet.

First, that estimate includes more than just fraudulent claims by consumers, it also includes fraudulent claims sent by physicians' offices themselves due either to a mistake (maybe) or a systematic attempt to increase profits (more likely) in an age of overwhelming and ever-increasing insurance demands. 

Second, while the government itself acknowledges that only a maximum of 10% of claims are likely to be fraudulent, even its own health care initiatives overwhelmingly treat the majority of claimants with the presumption of either mistaken eligibility or a fraudulent claim, and good luck to the consumer trying to prove otherwise. For example, the Social Security Administration "awards" an average of only 28% of initial disability claims - denying an average of 72%. Let me say that again. That's 72% of claims denied, compared to a maximum 10% fraud rate. Now you do the math.

Third, and most important to the fraud discussion, all of this financial jargon gets put into some major perspective when we actually consider the downright obscene amount of money people aren't talking about - the money attached to fraud on the corporate side of the equation.

In recent days, federal investigators have turned the spotlight toward what appears to be a repeated and systematic abuse of federal regulations by health care executives striving to further increase their already inflated profit margins, even with the rest of the country suffering a severe recession. In fact, according to ABC News, large players in the health insurance industry reportedly increased their profits by 56% in 2009 - primarily by dropping coverage for consumers. So that company that denied your claim to pay for your recent check-up tests because it couldn't be expected to pay for everyone's check ups probably made a profit in the high millions, if not billions, of dollars last year. If you're shaking your head right now, be sure to take a look through Business Insider's article, "15 Executives Who Get Paid Millions To Deny You Health Care Coverage." To give you a sense of what we're talking about here, these 15 people alone get paid between $800,000 and $38 million each per year to run health care companies with reported yearly revenues anywhere between $2.2 - $81 billion (that's billion with a "b") in 2008. If you crave more recent numbers, you can read about the top 10 most highly paid pharmaceutical executive salaries in 2010, which ranged from approximately $14 - $29 million last year (incidentally, these numbers include only salaries - no bonuses or executive perquisites which actually raise the figures significantly higher). That, my friends, is the kind of money for which people will do - and have done - just about anything.

Which is why the feds are now turning up the heat on the health care industry. Fines alone seem to have done little to dissuade health care companies from engaging in all kinds of fraudulent tactics, from promoting off-label uses of pharmaceuticals to encouraging kickback schemes, in order to increase their profit margins. Corporations have been all too happy to sign over some giant sized checks, only to pass along the cost to consumers in the form of higher prices and less coverage. Now feds are reviving a dusty statute called the Park Doctrine in an effort to hold these high powered executives personally and criminally responsible for the behavior of their companies...and the execs aren't happy about it. So in other words, they want to continue commanding salaries in the multi-million dollar range to run these companies, but they don't actually want to be held responsible for anything their companies do.

The feds say they got frustrated with repeat violations and decided to start using enforcement tools that were already on the books but had been allowed to languish. By some estimates, health care fraud costs taxpayers $60 billion a year, galling when Medicare faces insolvency.

"When you look at the history of health care enforcement, we've seen a number of Fortune 500 companies that have been caught not once, not twice, but sometimes three times violating the trust of the American people, submitting false claims, paying kickbacks to doctors, marketing drugs which have not been tested for safety and efficacy," said Lewis Morris, chief counsel for the inspector general of the Health and Human Services Department.

 "To our way of thinking, the men and women in the corporate suite aren't getting it," Morris continued. "If writing a check for $200 million isn't enough to have a company change its ways, then maybe we have got to have the individuals who are responsible for this held accountable. The behavior of a company starts at the top."

In other words, federal prosecutors seem to feel that the guys making muti-million dollar salaries to run health care-related companies should be held accountable for the activities of those companies. Obviously, the executives feel it is unfair to hold them personally accountable in any way, which makes a lot of sense to m...no wait, that makes no sense at all.

The example currently making headlines is that of Forest Labs, a pharmaceutical company that recently settled a $313 million lawsuit with the Department of Justice which alleged multiple fraudulent activities:

...Forest Laboratories...agreed to a $313 million settlement. The misbehavior: selling an unapproved drug, marketing another drug off-label, and lying to FDA inspectors during a visit.
The company's Forest Pharmaceuticals unit pleaded guilty to criminal charges of marketing its unapproved thyroid drug Levothroid--and ignoring the agency's warnings to stop. The plea also covers charges of "misbranding" its antidepressant drug Celexa, which basically means that it promoted the drug for off-label use. In this case, Forest pushed Celexa for use in children even though it was only approved for use in adults, an FDA statement says. 

Prosecutors also say that Forest sales reps paid doctors to persuade them to prescribe Celexa and its successor drug Lexapro, giving them cash "disguised as grants or consulting fees," plus expensive meals and entertainment, such as Broadway tickets, a deep-sea fishing trip, and pro baseball tickets. Forest "expressly denies" those claims, despite its agreement to pay some $148 million to settle those and other civil complaints.

The settlement riled the feathers of Forest shareholders, some of which went so far as to publicly demand the resignation of CEO Howard Solomon. Federal investigators have taken the recriminations one step further, threatening to hold Solomon personally responsible for the company's actions and ban him from the pharmaceutical industry altogether. Solomon of course feels that he is being unfairly persecuted, and I for one plan on getting around to crying a veritable river of tears on his behalf just as soon as I can figure out a way to afford my own prescriptions.

But Forest Labs is hardly a lone wolf in the pack of industrial fraud. In recent years, several health care-related companies have paid out copious settlements for wrongdoing, including (but not limited to):

• Pfizer - $2.3 billion
• Eli Lilly - $1.4 billion
• AstraZeneca - $520 million
• Quest Diagnostics - $302 million
• Boston Scientific - $296 million
• Mylan Pharmaceuticals, UDL Labs, AstraZeneca & Ortho-McNiel - $124 million
• Omnicare Inc. - $98 million
• WellCare Health Plans - $80 million

And those are just the big numbers - there are plenty more multi-million dollar and smaller settlements that add up. 

So the next time someone wants to bemoan the prevalence of health care fraud in this country, you can pull out the big guns. We have all been socialized, institutionalized if you will, into thinking of health care fraud as something lazy, impoverished people do in order to milk the system. The reality is much more insidious. There is no point in discussing health care fraud without addressing the massive profits systematically and illegally garnered by health care companies at the expense of American consumers, leaving many of us in the impossible situation of having to choose between paying for our health care or paying our rents or mortgages. After all, if we don't find a way to make it less profitable for corporations to screw the American public on such a massive scale, how effective can we ultimately expect any reform effort to be?

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Comcast: Censoring Tweets But Spporting Free Press?

Our readers may recall last week when media giant Comcast threatened to pull all of its funding support from a small non-profit charity because a teenage girl there dared to tweet a criticism of Comcast for hiring former FCC Chairman Baker as its own private lobbyist. Well, Comcast would like you to forget about all that and trust that this time it really will support free, independent press, honestly. 

You see, in order to push through the merger (assisted by Commissioner Baker, of course) between media conglomerates Comcast and NBC, Comcast agreed to "partner with" a minimum of five independent, non-profit news organizations. Ironically, the whole point of independent journalism is to allow reporters the freedom of commenting on stories of interest to the public without concern as to how such stories might affect the profits of corporate giants such as, say, Comcast. And while Comcast might want us to believe that freedom of the press and corporate imperialism are not mutually exclusive, their history of punitive treatment towards critics seems like pretty damning evidence to the contrary.

Reporter Josh Stearns over at Save The News suggests that readers should think twice about assuming that Comcast has the capacity, never mind the intention, to engage in truly free press:

The Reel Grrls example has to be a consideration for nonprofit journalism organizations who are thinking about working with the media giant around these local news partnerships. What happens when one of these nonprofits wants to cover a local telecommunications issue, or do a public interest piece on rising cable rates? Do local reporters have to worry if they tweet about how bad their Comcast Internet service is? If Comcast is watching its “digital footprint” this closely, you can bet it won’t be happy if one of their nonprofit news partners wants to investigate a story where the company is implicated....

If Comcast is willing to threaten a local youth media organization over a tweet, what would stop it from pulling funding from a local nonprofit journalism website over a story? For news organizations looking to get out from underneath the thumb of commercial media pressures that have gutted newsrooms and shaped coverage, these two are too close for comfort. And for the public looking for independent, watchdog journalism, be cautious if there’s a Comcast logo in the corner.

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The CDC Is Prepared For The Zombie Apocalypse

 

Kudos to the Centers For Disease Control and Prevention for using a little creativity to educate the public about disaster preparedness. The CDC recently posted a blog article on how to prepare for a zombie apocalypse (and some non-supernatural disasters as well). While a typical post on the site would receive about 3000 page views per week, the CDC briefly crashed their own site when the article received over 30,000 views in just one day. Now that is is how public outreach is done.

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