Sunday, August 20, 2017

Health Care Non-Profit Organizations Ignored Conflicts of Interest or Potential Corruption Generated by Mar a Lago Fundraisers, But Drew the Line at Supporting Nazi Sympathizers

Leaders of big health care organizations have long made excuses for rampant conflicts of interest in health care.  Usually, their rationales included something about the need to collaborate with industry to spark innovation.  However, some leaders may have been directly benefiting from such conflicts (e.g., academic leaders on the payrolls of drug, device and biotechnology firms, even on the firms' boards).  Others may not have been, but were making millions in the current system, so why rock the boat?  Meanwhile, the risks these conflicts posed of health care corruption were not a subject of polite conversation. 

Thus it is no surprise that health care leaders are very resistant to suggestions they reduce conflicts of interest affecting their organization.  There was just a recent dramatic case of what it currently may take to break health care leaders from their conflict of interest habbit.   

The 2017 Mar a Lago Fundraising Events

It had long been a tradition for some non-profit health care organizations to hold gala fundraisers in Palm Beach, Florida at the Trump Organization's Mar a Lago club.  This was not remarkable when Mr Trump was a private citizen.  However, when he was elected President, but refused to divest himself of his ownership of the Trump Organization, these fundraisers suddenly looked like conflicts of interest, and possible corruption.  Large health care organizations, particularly hospital systems, but also disease advocacy groups, may daily interact with the executive branch of the US government, and may have interests in these interactions going in certain directions.  The acceptance by the President, the leader of the executive branch, of money from such organizations, even if in the form of payments to the family company he owns, clearly creates a conflict of interest.  If the payments are meant to or to create an impetus for the President to act in favor of the interests of the paying organization could be corruption (abuse of entrusted power for private gain). 

Regardless of such ethical concerns, the health care organizations that used Mar a Lago for fundraising were happy to continue their traditions.  For example, the Cleveland Clinic persisted in holding its fundraiser there despite protests by its own students, health care professionals, and patients' families, many of whom were particularly irate because of Mr Trump's attempt to ban travel to the US by Muslims, which had already prevented on Clinic physician from re-entering the US (look here).  Also, the Dana-Farber Cancer Institute similarly persisted despite similar protests (look here).  In neither case did the leaders of the two clinical institutions deign to even discuss the issues of  conflicts of interest, or corruption. 

Concerns about Next Year's Fundraising Events

On August 4, the Chronicle of Philanthropy summarized the issues.  In general, it seemed that the monetary returns of holding events at Mar a Lago trumped any puny concerns about conflicts of interest:

Fundraisers say Palm Beach events are among the most lucrative they hold and provide an opportunity to court donors who have the potential to give big sums long after the galas are over.

Mar-a-Lago offers more space than any other venue in the area, increasing the opportunity to attract more donors.


A Chronicle analysis of permit data shows how lucrative events at Mar-a-Lago can be.

In 2016, when Mr. Trump’s unorthodox and often controversial presidential campaign was in full swing, the Cleveland Clinic raised $963,029, after expenses, at an annual ball; Susan G. Komen brought in $700,00 at its 2016 Mar-a-Lago event, and the Palm Beach Police Foundation raised $643,975.

More qualitatively,

For many charities, a Mar-a-Lago gala is one of the biggest fundraising events of the year.

'It’s definitely one of our highest-visibility events,' says Erik Levis, communications director for the American Friends of Magen David Adom. Revenue from the Mar-a-Lago event is comparable to dollars brought in through the charity’s galas in Los Angeles and New York City, he adds.

Many charities say the financial benefits of continuing to hold events at Mar-a-Lago make it difficult to consider moving them elsewhere.
The Chronicle did quote one expert who raised the possibility of conflicts of interest.

Doug White, a philanthropy adviser, is more blunt, arguing that charities should shun the venue because, on its face, renting a club owned by the president presents a conflict of interest.

Even if a charity does not intend to curry favor with the president, some people may perceive it that way, he says. 'It’s the symbolism of it more than the actual cash in [Mr. Trump’s] pocket for me,' Mr. White says.

However some argued that any conflict of interest were small, given Mr Trump's vast wealth

The president, who has declined to divest from his vast business holdings, could profit from some of the events held by charities at Mar-a-Lago — but only marginally.

Some further argued that holding any single event at Mar a Lago could not influence Mr Trump all that much.

If nonprofits hold events at Mar-a-Lago to influence Mr. Trump, that would be a bad tactic, says Leslie Lenkowsky, professor emeritus of public affairs and philanthropic studies at Indiana University. He notes that Mr. Trump earns profits in many ways from his businesses; charity events held at the club are small potatoes.

'Any charities that say ‘Let’s go do our fundraiser at Mar-a-Lago because Donald Trump will be grateful to us for the business’ is probably mistaken,' says Mr. Lenkowsky, a Chronicle of Philanthropy columnist....

It's fascinating that Mr Lenkowsky basically made his argument from a cost-effectiveness standpoint.  This was underlined by another expert, 

For many charities, the decision comes down to the bottom line. Phil Hills, president of the Marts & Lundy fundraising consulting firm, says that while charities should consider the potential for blowback among their supporters when selecting a venue like Mar-a-Lago, money should be the biggest consideration. 'You should probably hold it at whatever location gives you the best return,' he says.

So, this seemed to be an argument that non-profit organizations should not be concerned that holding fundraisers at a Trump venue could appear to be attempts to buy influence, as long as the fundraisers bring in a lot of money.

On the other hand, arguments used against specific organizations paying the Trump Organization to hold their charity events had more to do with how Mr Trump's stated policies, now elaborated more after as his presidency wore on, conflicted with the organizations' missions.  For example, an August 10, 2017 article about the next Cleveland Clinic Mar a Lago fundraiser stated,

Whereas the primary complaint early this year was about Trump's immigration policy, it is about health care now.

Holding a fundraiser at Mar-a-Lago 'is unacceptable because it symbolically and financially supports a politician actively working to decrease access to health care and cut billions of dollars in research funding from the National Institutes of Health budget,' says the online petition, signed by more than 1,100 people since late July.

A social and fundraising event that helps enrich the private business interests of Trump should be contrary to the Clinic's core values, supporters of the protest say.

'Donald Trump has come out and said he would let the Affordable Care Act implode,' said Sandy Theis, executive director of Progress Ohio, one of the organizations helping circulate the letter on the website Medium. 'So there should be no health care provider, let alone major medical institution, putting money in that man's pocket.'
Note that the arguments against the Mar a Lago fundraiser were not that it would be wrong to "enrich the private business interests of Trump." The arguments were that it would wrong to enrich Mr Trump given that Trump's policies were perceived to be bad for health care.  This implies it would be acceptable to enrich Mr Trump if he were perceived to have more favorable policies.

That is really striking, and strikingly cynical. It suggests that fundraisers at Mar a Lago are intended to buy influence, and hence are not merely conflicts of interest, but corruption.  But it further suggests it is not worth purchasing such influence from someone who already opposes the purchaser's policies.  This could translate to: it is not worth trying to corrupt someone who is already your enemy. 

Eileen Sheil, executive director of corporate communications at the Clinic, did not clearly refute the implication that they were paying Mr Trump to influence him, saying only

'In no way is this about politics for us,' she said, adding that the Clinic is a nonprofit organization. 'The sole purpose' of the Mar-a-Lago event 'is to raise money.'

We Can't Do Business with, or buy the Influence of a Nazi Sympathizer

What finally undercut President Trump's business of selling the Mar a Lago venue for fundraising to health care non-profits which must have major interactions with the executive branch of the US government was not concerns about conflicts of interest, or the risks of corruption.  What ruined this year's gala business was the apparent heinousness of Mr Trump's political affinities.

As we noted here, after a rally by people openly carrying Nazi and Ku Klux Klan symbols, chanting slogans from Nazi Germany (e.g., "blood and soil," the translation of the old Nazi "blut and boden," look here), one of the apparent neo-Nazis ran down counter-protesters with his car, killing one and injuring many more, Mr Trump initially refused to label the car driver and his associates as neo-Nazis or white supremicists. Days later, after an unconvincing scripted oration, he declared that some neo-Nazis and white supremicists are "very fine people," earning the praise of former Ku Klux Klan leader David Duke (look here).

That did it.  Sonn after, the Cleveland Clinic announced that it "has decided that it will not hold a Florida fundraiser at Mar-a-Lago in 2018," (look here).  The public announcement did not elaborate on the reason. That same day, the Palm Beach Post reported that

Laurel Baker, executive director of the Palm Beach Chamber of Commerce, minced no words Thursday about whether charities should continue to hold their events at Mar-a-Lago this season following President Donald Trump’s statements about the recent violence in Charlottesville, Va.

'If you have a conscience, you’re really condoning bad behavior by continuing to be there,' Baker said. 'Many say it’s the dollars (raised at the events) that count. Yes. But the integrity of any or organization rests on their sound decisions and stewardship.'

Within days, health related non-profit organizations including the American Red Cross, the Susan G Komen Foundation, the Autism Project of Palm Beach County, the American Friends of Magen David Adom (an Israeli emergency medicine service), and the American Cancer Foundation had cancelled their Mar a Lago events, per the Washington Post. (Note that Dana-Farber had already announced it would not do a 2018 fundraiser there.)

So the bottom line appears to be that for health care organizations, generating conflicts of interest affecting political leaders, and buying political influence is unacceptable - if the political leaders are Nazi, Ku Klux Klan, or white supremicist sympathizers.


To what depths we have fallen.  The entire discusson of health care organizations continuing to hold gala fundraisers at a venue owned by the President of the United States of America seemed to assume that it is acceptable to do so to buy influence, i.e., that it is acceptable for health care organizations to purposefully generate conflicts of interest, to even corrupt politicans.  The only thing they should not do is buy influence from Nazis and the like.

If our only rule is Nazis are bad, count on continuing cynicism and resulting corruption will continue to generate Nazis, or their relatives.


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