Threats to Democracy Round Up - Selected Topics, Late May, 2023

Influence of Hostile Foreign Powers

We have previously posted lots of words about the anechoic effect: the lack of echoes produced by seemingly important stories about health care dysfunction.  It seemed as if such stories were taboo, presumably because even discussing them was seen as a threat to the rich and powerful who increasingly run health care.  Those involved in the leadership and governance of health care organizations and their cronies also have considerable power to damp down any public discussion that might cause them displeasure. In particular, we have seen how those who attempt to blow the whistle on what really causes health care dysfunction may be persecuted.   

 But as we discussed here, the major issues we discussed prior to 2015 gave way to a new normal with the advent of Trump as a presidential candidate and the MAGA movement as a major force in US politics.  In that 2020 discussion, we noted how the Trump administration acted to squelch discussion of scientific topics that did not fit in with its ideology, despite constitutional guarantees of speech and press free from government control (look here).

Now it appears that the most striking example of the anechoic effect involves discussion of the underlying causes of the anti-democratic turn in the US that threatens the system that permits public discussion, and the possibility of reforming health care dysfunction among other issues.  We continue to see bits of evidence made public about how democracy is threatened by the influence of hostile foreign powers, especially Russia, on US politics, especially elections.  Yet the evidence produces few echoes.

Here are some of the more striking bits of evidence that appeared in just the last two weeks about Russia's malign influence on US democracy.

Russia's Malign Strategy and Tactics

-The April 2023 Indictment for Russian Election Interference and Threats to U.S. Democracy "The Kremlin’s Strategy: Exploiting far left and far right fringes; Exploiting the racial divide; Going local"
https://www.justsecurity.org/86424/the-april-2023-indictment-for-russian-election-interference-and-threats-to-u-s-democracy/

Racism as a National Security Threat "the one big thru-line from the Cold War to today in terms of the  most exploitable vulnerability Russia can weaponize against us:  America’s racial divisions"
https://open.substack.com/pub/asharangappa/p/class-15-racism-as-a-national-security

Evidence of widespread Russian election meddling in other countries: "Kemal Kilicdaroglu, main challenger of Turkish President Tayyip Erdogan,  said ... his party has concrete evidence of Russia's  responsibility for the release of 'deep fake' online content"
https://www.reuters.com/world/middle-east/erdogan-rival-says-has-evidence-russias-online-campaign-ahead-turkey-vote-2023-05-12/

Linkages of Trump and Supporters to Russia

 US Trumpists are increasingly part of a new global fascist axis: "far-right populism of Hungary’s prime minister is helping to inspire  U.S. Republicans' agenda for 2024, a game plan that targets  immigration, LGBTQ rights and... the war in Ukraine"
https://www.axios.com/2023/05/08/gop-hungary-connection-shaping-2024-campaign

Reminder that Trump "is Putin's puppet": He was "repeatedly asked by CNN host Kaitlan Collins if he backed Ukraine in its 15-month conflict with Vladimir Putin’s forces, and repeatedly dodged the question"
https://www.independent.co.uk/news/world/americas/us-politics/putin-ukraine-war-trump-cnn-b2336935.html

Follow the money: Trump Media got financing from Paxum Bank, which "promoted itself...as a way for video streamers of adult content  to coordinate financial transactions across international borders" and is owned by a sketchy Russian businessman
https://www.washingtonpost.com/technology/2023/05/13/trump-truth-social-loan-questions/

[Another Trump-Russia connection?] FBI agents raid condo unit owned by Russians at Trump Towers in Sunny Isles
https://www.miamiherald.com/news/local/article275358451.html

The FBI raided a condo in Trump Tower III in Sunny Isles Beach, FL because its "owner was being arrested... on  charges of illegally selling airplane parts to Russian airline  companies"  
https://www.yahoo.com/lifestyle/days-mysterious-fbi-raid-russians-225454222.html

Putting another Russian asset in the WH: In call to ReAwaken America rally, Trump said he would give Michael Flynn a WH position.  Flynn "entered, then withdrew, a guilty plea of making false statements to the F.B.I" and hung out with Putin in Russia
https://www.thedailybeast.com/trumps-call-in-to-michael-flynns-far-right-roadshow-is-red-meat-for-christian-nationalists

Reminder: "next to Putin at the head table, in the seat of honor, was an American.  Retired Lt. Gen. Michael Flynn, who would later become Donald Trump's  national security adviser"
https://www.nbcnews.com/news/world/guess-who-came-dinner-flynn-putin-n742696

Trump and Supporters' Techniques to Downplay their Connections to Russia: The Durham Investigation 

It was supposed to show how the investigation of Trump/Russia was a witch hunt.  It didn't

Not with a bang.... Trump fans hyped the Durham investigation. Trump fans will likely keep spinning it, but it "delivered underwhelming results... securing a guilty plea from a little-known FBI employee [and] ...losing ...2 criminal cases"
https://apnews.com/article/durham-trump-russia-probe-7e84f94ca9cf7905cbc5eddc108575b3

"Durham’s...report revealed little substantial new information  about the inquiry...failed to  produce the kinds of blockbuster revelations... that...Trump  and his allies suggested Mr. Durham would uncover"
https://www.nytimes.com/2023/05/15/us/politics/trump-russia-investigation-durham.html

"Durham...scolded the F.B.I. but failed to... uncover a politically motivated 'deep state' conspiracy.... charged no  high-level F.B.I. or intelligence official with a crime and acknowledged...Clinton’s 2016 presidential campaign did  nothing prosecutable"
https://www.nytimes.com/2023/05/17/us/politics/durham-report-trump-russia.html

Despite the failure of the Durham investigation to find any important misconduct much less "deep state" politicization of the Trump-Russia investigation, to Trump fans it  "was Watergate times 10, or 100"
https://www.nytimes.com/2023/05/16/us/politics/durham-report-conservative-reaction.html

Russia, Trump and the 2016 election "Russia tried to swing the 2016 election to Trump; FBI had reason to investigate a tip suggesting Trump campaign involvement; Trump campaign welcomed help from Russia:  ‘Steele dossier’ proved to be a red herring"  
https://www.washingtonpost.com/politics/2023/05/17/truth-about-russia-trump-2016-election/

Russian Propaganda and Disinformation

"hate crimes in America are often influenced by online chatter that's  increasingly linked to Russian sites or pro-Russian narratives on more  obscure parts of the internet. The Kremlin doesn't seem to mind"  
https://www.axios.com/2023/05/09/american-extremists-russian-sites-shootings

Conflicts of Interest, Corruption, Crime

Since 2015, we have asked (here) how the US (and the world) can possibly reduce health care corruption, a major cause of global health care dysfunction, under a thoroughly conflicted and corrupt Trump administration.  Since the end of that administration, Trump has campaigned to be president again.  Meanwhile, the evidence of his and his supporters' conflicts of interest, corruption, and criminality continue to grow.  Recent examples include:

Trump's Conflicts, Crimes, and Corruption

Jury finds Trump liable for sexual abuse, awards accuser $5M [When real, reasonable people get to review Trump's conduct while free of his intimidation and bluster they may tend to do so harshly]
https://www.sfgate.com/news/article/jury-to-start-deliberations-in-suit-accusing-18087335.php

"Trump admitted more directly than before on Wednesday that he knowingly  removed government records from the White House and claimed that he was  allowed to take anything he wanted with him as personal records" Confessing to a crime?  
https://www.nytimes.com/2023/05/11/us/politics/trump-documents-white-house.html

He just can't help himself: in his CNN Town Hall appearance, Trump appeared to defame E Jean Carroll again, just days after she won a lawsuit against him for his previous defamation
https://www.nytimes.com/2023/05/11/nyregion/e-jean-carroll-trump-defamation.html

[Even more accusations of sexual misconduct by Trump, even involving his own White House staff] Top aides reveal Trump’s alleged inappropriate conduct towards female staffers
https://www.independent.co.uk/news/world/americas/us-politics/donald-trump-white-house-aides-abuse-b2337881.html

Attacking the rule of law, eve obstruction of justice? - Trump fan politicians go after prosecutors who are investigating or otherwise legally pursuing Trump, including Manhattan DA Bragg, Special Counsel Smith, Fulton County GA DA Willis
https://www.theguardian.com/us-news/2023/may/17/donald-trump-republican-allies-prosecutors-investigations

There is apparently evidence that Trump knew he was committing a crime by walking off with classified presidential records despite his later claims that doing so was legal
https://www.independent.co.uk/news/world/americas/us-politics/trump-mar-a-lago-classified-documents-evidence-b2342010.html

The Conflicts, Crimes and Corruption of Trumpist and/or Far Right Politicians

[Noticing this glaring conflict of interest] Judge to order Wisconsin Elections Commission to reconsider fake elector complaint without the commissioner who joined the scheme
https://www.jsonline.com/story/news/politics/2023/05/08/wisconsin-elections-commission-must-reconsider-fake-elector-case/70195092007/

Are they all sleazy or criminal? Republican "Rep. Bryan Slaton resigned from the Texas House on Monday after an investigation determined that he had an inappropriate sexual relationship with a 19-year-old woman on his staff"  
https://www.chron.com/politics/article/bryan-slaton-pressure-resign-texas-house-18086307.php

TX rep Slaton "proposed banning children from attending drag shows to supposedly shield them from being groomed... resigned after he was found to have engaged in inappopriate sexual  conduct with a 19-year-old intern" Fake morality of the culture warriors
https://www.theguardian.com/us-news/2023/may/09/republican-drag-shows-danger-for-kids-resigns-misconduct-intern

[Again, are they all crooks?] Rep Santos [(R-NY) is accused of using illicit campaign contributions for personal expenses "indictment accusing him of wire fraud, money laundering,  stealing public funds and lying in federal disclosure forms"
https://www.nytimes.com/live/2023/05/10/nyregion/george-santos-charges-news/santos-had-been-under-investigation-for-his-campaign-finances-and-other-activities

Rep George Santos confesses to theft in Brazil to avoid prosecution
https://www.washingtonpost.com/world/2023/05/11/george-santos-brazil-case-theft/

Follow the money: "conservative operatives using sophisticated robocalls raised  millions of dollars from donors using pro-police and pro-veteran  messages....  nearly all the  money went to pay the firms making the calls and the operatives  themselves"
https://www.nytimes.com/interactive/2023/05/14/us/politics/scam-robocalls-donations-policing-veterans.html

[And now reports of sexual misconduct by Trump's lawyer Giuliani] Rudy Giuliani accused of sexual harassment by ex-employee
https://www.bbc.com/news/world-us-canada-65606131

[Are they all thugs, if not crooks?- Louisiana] GOP Rep Clay Higgins filmed shoving activist who questioned Lauren Boebert’s divorce
https://www.independent.co.uk/news/world/americas/us-politics/clay-higgins-shoved-activist-laren-boebert-b2341682.html

Propaganda, Disinformation, Deception

We used to write about propaganda and disinformation used to promote health care goods and services (stealth marketing campaigns), and advocate for policies favorable to private health care organizations (stealth health policy advocacy and stealth lobbying).  Some stealth marketing, lobbying and policy advocacy campaigns encompass not just propaganda, but disinformation.  For example, consider the health insurance company campaign to derail the Clinton administration's attempt at health reform as described by Wendell Potter in Deadly Spin (look here).  The tactics employed in that campaign included: use of front groups and third parties (useful idiots?); use of spies; distractions to make important issues anechoic; message discipline; and entrapment (double-think).

But back in the day, the notion of propaganda and disinformation as a real threat to health care, much less our democratic process and society as a whole, was pretty radical.  That was then.  By 2019 we were writing about a  a new (ab)normal that includes propaganda and disinformation in the service of hostile authoritarian foreign states meant to disrupt more democratic governments, whatever the cost in human health and lives.

 It is important to better understand the techniques of the propagandists and disinformationists, so:

Propagandists' and Disinformationists' Toolbox

Reflexive control "Using the name scholars have given to this area of research to  frame the debate baits Rufo’s opponents into arguing about what CRT is and isn’t, which... keeps the exact three words he wants (and  their attendant connotations) in circulation"  
https://open.substack.com/pub/asharangappa/p/erasing-memory

"How can we really engage in these conversations, when the tension is  there before you even pick up the book and open the topic?" [It's hard to  have a rational argument when fanatics are screaming at you]
https://www.axios.com/2023/05/04/us-history-test-results-civics-covid

The Flood the Zone with BS Technique:
[The old-time fast talking snake oil salesman in the internet age] Donald Trump steamrolls CNN’s town hall [It's easier to lie than to rebut a lie.  If someone lies very quickly, you can't respond in real time]
https://www.washingtonpost.com/opinions/2023/05/10/cnn-trump-town-hall-lies/

'"You can’t keep saying that all night long'....[so one]  can rebut him, correct him, interrupt him and otherwise battle with him  over every point, but that’s no match for ceaseless mendacity....'We don’t have time to fact-check every lie'"
https://www.washingtonpost.com/opinions/2023/05/10/cnn-trump-town-hall-lies/

It's the old Steve Bannon (and Russian) tactic: flood the zone with BS. "CNN hasn’t figured this thing out, and it’s a good bet its competitors have no better ideas" It's clear society needs a better solution to the flood the zone tactic.
https://www.washingtonpost.com/opinions/2023/05/10/cnn-trump-town-hall-lies/

"fear is weaponized even more than hate by leaders who seek to spark violence. Hate is often part of the equation...but fear is  almost always the key ingredient when people feel they must lash out to  defend themselves.
https://www.nytimes.com/2023/05/06/opinion/fear-speech-social-media.html

Ways to Combat Propaganda and Disinformation

Ending false equivalence in choice of editorial voices: "will the  newspaper raise the bar for those local or syndicated [supposedly conservative] voices — i.e.,  requiring the commentary to actually engage in a truthful semblance of a  given issue?
https://www.sltrib.com/opinion/commentary/2023/05/08/commentary-will-we-see-honest/

How the media can cover Trump better this time "Focus on 'the stakes' of the 2024 election, not 'the odds'; Explain Trump’s probable agenda;  Don’t make getting access to Republican politicians or projecting 'neutrality and 'objectivity' a main goal"
https://www.washingtonpost.com/opinions/2023/05/09/trump-2024-cnn-town-hall-media-coverage/

Christian Nationalism Threatens Health Care Professionals, Medicine, Health Care, and Public Health

Much of the "culture war" is about attacking particular patient groups (eg, transgender patients, women seeking abortions, needing birth control or care for such conditions as ectopic pregnancy and miscarriage) and the health care professionals who care for them, or about attacking public health professionals (eg, those involved in pandemic policy) or creating phony public health problems, eg, pornography.

Furthermore, while these attacks are often framed in a biomedical, health care or public health context, the motivation behind them seems to come from extreme sectarianism, particularly Christian nationalism.

Leaked data on right-wing physicians group shows its support of extreme sectarian religious beliefs, recruiting "doctors and medical school students seen as holding Christian views," returning US to a time when "evangelical Christian beliefs" were favored
https://www.wired.com/story/american-college-pediatricians-google-drive-leak/

The state's near-total abortion ban is forcing providers to leave the state "she had to tell a patient that her  pregnancy had a significant fetal abnormality.... her hands were tied. She  couldn’t offer any more care- they had to go elsewhere"
https://www.huffpost.com/entry/idaho-abortion-ban-crisis_n_6446c837e4b011a819c2f792

[Attempting intimidation for taking care of patients] Texas AG Ken Paxton probing Austin children’s hospital [but] "It’s not clear what law Paxton believes Dell Children’s has broken;  Texas does not currently have age limits on gender-affirming care"
https://www.texastribune.org/2023/05/05/ken-paxton-trans-care-investigation-dell-childrens/

Fearing legal repercussions, doctors in Texas say they are risking grave patient harm to comply with new abortion restrictions [abortion bans'  adverse effects:  Extreme sectarian based medicine hurts patients]  
https://www.newyorker.com/news/dispatch/in-the-post-roe-era-letting-pregnant-patients-get-sicker-by-design

Reminder that movement against abortion imposes extreme sectarian religious beliefs on those of other faiths: "Jewish law dating back to the Torah has established that abortion is not murder."
https://www.charlotteobserver.com/opinion/article275261916.html

Confluence of far-right politics and health care nonsense: After DeSantis' coup, New College will host Dr Scott Atlas as commencement speaker. He was a  member of the Trump administration who promoted herd immunity as solution to COVID
https://www.tampabay.com/news/education/2023/05/09/new-college-picks-trump-covid-adviser-scott-atlas-commencement-speaker/

[How sectarianism and superstition creeps into public health] Ladapo's wife who "studied traditional naturopathy, plant and herbal medicine, and shamanism" convinced Ladapo to go to  counseling that that caused him to believe he was following "God’s plan"  
https://www.orlandosentinel.com/2023/05/13/joseph-ladapo-says-anti-vaccine-crusade-was-gods-plan-it-cost-him-his-peers-trust-2/

[More threats to health care] Abortion Clinics Are Dealing with More Arson, Stalking, and Anthrax Threats Now-  Abortion providers feared they’d see an increase in harassment and threats if Roe v Wade was overturned. They were right.
https://www.vice.com/en/article/v7bday/rise-in-abortion-clinic-harassment-after-roe

[Turning sexual hangups into policy? Theocrats go after porn as a public health threat, and...] There’s ‘nothing more timid’ than a man watching porn, Josh Hawley says "There is no risk involved, no exposure to hardship or danger in the least" Promoting sex and relationships that are risky, difficult, dangerous?
https://www.kansascity.com/news/politics-government/article275458201.html

KS Republican county chair says LGBTQ friendly pastors "signed a contract with Satan," plans to "make it hostile to that group of people...small sliver of society...have them move elsewhere, that does a huge amount to shut this  down,”
https://themercury.com/news/republicans-revel-in-divine-plan-to-turn-kansas-into-conservative-sanctuary/article_4a9bbd54-a6fd-5d05-b06f-41785cf4eff6.html

Apparently afraid of prosecution under anti-abortion laws, doctors told patient threatened with a miscarriage "at high risk of life-threatening complications" they could do nothing.  Violating law requiring hospitals to treat patients in emergencies?
So anti-abortion laws make doctors damned if they do (abort pregnancy for patient facing high risk of severe complications) and damned if they don't (by failing to provide emergent care).
https://www.propublica.org/article/two-hospitals-denied-abortion-miscarrying-patient-breaking-federal-law

[More physicians driven away by bans on caring for patients demonized by sectarian extremists] Austin doctors who treated trans kids leaving Dell Children’s clinic after AG Paxton announces investigation
https://www.chron.com/news/houston-texas/article/talk-investigation-forces-tx-doctors-treat-trans-18098101.php

After quacky COVID herd immunity proponent and former Trump administration staffer Dr Scott Atlas invited to speak at DeSantis transformed New College commencement, students raise money to support alternative event
https://wusfnews.wusf.usf.edu/education/2023-05-10/with-former-trump-appointee-speaking-at-their-graduation-new-college-students-plan-alternative-commencement

Doctors forced out by laws restricting treatment of patients with pregnancy complications pushed by extreme sectarians: "Doctors... fleeing the state due to new abortion restrictions....[fearing] 'Being tried as a felon simply for saving someone’s life'"  
https://www.cnn.com/2023/05/13/us/idaho-abortion-doctors-drain

[Reminder: laws based on extreme sectarian religious views impose them on those of other faiths, and harm doctors and patients] Texas doctors depart as attorney general investigates hospital’s gender-affirming care
https://www.theguardian.com/us-news/2023/may/18/texas-hospital-inquiry-doctor-exodus

Follow the Money: Who Funds Attacks on Democracy

It's not just Russia and hostile foreign powers who threaten democracy behind the scenes.  Domestic greed is still a factor. 

Another example of how big national right-wing dark money came to small town to finance local school board candidates who wanted to ban books. We need to figure out who is paying for this, and what's in it for them  
https://www.bostonglobe.com/2023/05/06/nation/how-school-board-race-blue-state-illinois-became-nationally-funded-cage-match/

"Republicans...play this...game of supporting the  wealthy and big business behind the scenes... but making it appear...that they're on the side of the little person....going after the wokeness is a good way to do it...that's not  a bread and butter issue"
https://www.bbc.com/news/business-65428204

[One big corporation refuses to bow down to DeSantis' anti-woke threats.  Will others realize pumping money into extremists' political coffers is bad for business?] Disney Pulls Plug on $1 Billion Development in Florida
https://www.nytimes.com/2023/05/18/business/disney-ron-desantis-florida.html

 

 

The Plot Thickens - How Corrupt was the Trump Administration Under Which Health Care (and the Rest of the US) Operated from 2017 - 2021?

This week, reports appeared that former US President Donald Trump, the Trump Organization of which he is the principal owner, and other people connected to the Trump Organization are the subjects of a special grand jury investigation going on in New York City.  As the Washington Post reported,

 Manhattan's district attorney has convened the grand jury that is expected to decide whether to indict former president Donald Trump, other executives at his company or the business itself, should prosecutors present the panel with criminal charges, according to two people familiar with the development.

Furthermore,

 The move indicates that District Attorney Cyrus R. Vance Jr.’s investigation of the former president and his business has reached an advanced stage after more than two years. It suggests, too, that Vance thinks he has found evidence of a crime — if not by Trump, by someone potentially close to him or by his company.

Vance’s investigation is expansive, according to people familiar with the probe and public disclosures made during related litigation. His investigators are scrutinizing Trump’s business practices before he was president, including whether the value of specific properties in the Trump Organization’s real estate portfolio were manipulated in a way that defrauded banks and insurance companies, and if any tax benefits were obtained illegally through unscrupulous asset valuation.

The district attorney also is examining the compensation provided to top Trump Organization executives, people familiar with the matter have said.

To my knowledge, even though the grand jury could return no indictments, such an investigation of a former president and his business is unprecedented in modern times.  It suggests the possibility that this particular president was more unethical and corrupt than any other, and that he might turn out to be the only actually criminal president.  Thus it suggests that all our concerns about unethical practices, conflicts of interest, and corruption of the Trump administration, and their effects on corruption in other sectors, particularly health care, were not unfounded.

Thus, I will take this opportunity to review these concerns.

  Background: Health Care Corruption

As we wrote in August, 2017, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

 

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

 

The report got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects some other places, mainly  presumably benighted less developed countries.  At best, the corruption in developed countries that gets discussed is at low levels.  In the US, frequent examples are the "pill mills"  and various cheating of government and private insurance programs by practitioners and patients.  Lately these have gotten even more attention as they are decried as a cause of the narcotics (opioids) crisis (e.g., look here).  In contrast, the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics (e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," or the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

We have been posting about this for years at Health Care Renewal, while seeing little progress on this issue.

 Health Care Corruption in the Context of a Corrupt Government

Instead, things from 2017 - 2021 only seemed to be getting worse, given the increasing evidence that the Trump administration was corrupt at the highest levels.   In January, 2018, we first raised the question about how health care corruption could be pursued under a corrupt regime.  We noted sources that summarized Trump's. the Trump family's, and the Trump administration's corruption..  These included a website, entitled "Tracking Trump's Conflicts of Interest" published by the Sunlight Foundation, and two articles published in the Washington Monthly in January, 2018. "Commander-in-Thief," categorized Mr Trump's conflicted and corrupt behavior.  A Year in Trump Corruption," was a catalog of the most salient cases in these categories in 2017.

In July, 2018, we addressed the Trump regime's corruption again  By then, more summaries of Trump et al corruption had appeared.   In April, 2018, New York Magazine published "501 Days in Swampland," a time-line of  starting just after the 2016 presidential election. In June, 2018, ProPublica reviewed questionable spending amounting to $16.1 million since the beginning of Trump's candidacy for president at Trump properties by the US government, and by Trump's campaign, and by state and local governments. Meanwhile, Public Citizen released a report on money spent at Trump's hospitality properties.

In October, 2018, we summarized the content of the voluminous Tracking Corruption and Conflicts of Interest in the Trump Administration summary appearing in the Global Anti-Corruption Blog. The blog organized corrupt activities within the Trump administration into the following categories:

1. U.S. Government Payments to the Trump Organization

2. Use of the Power of the Presidency to Promote Trump Brands

3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors

4. Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses

Not only was the report voluminous, the October, 2018, version of the report requiring 26 pages to print, it suggested that many examples of corruption by Trump et al were not one-offs, but were long-term activities.  For example, every time President Trump travels to on of the properties he owns through the Trump Organization, for example, has Mar-a-Lago resort in Florida, the US government is obligated to pay Trump himself through that organization for various expenses, e.g., the Secret Service renting golf carts at Mar-a-Lago.  Each time that happens it seems to violate the "domestic emolument clause" of the US Constitution, which prohibits state or US government payments to a President for anything other than his salary.  Also, foreign governments and corporations seeking to promote specific government policies in their self-interest, similarly seeking favorable regulations, or other seeking to influence government actions in their favor are making periodic payments to the Trump Organization, such as buying accommodations or paying for events at Trump properties.  When foreign governments do so, that appears to violate the "foreign emoluments clause" of  the US Constitution, which prohibits payments by a foreign government to the US President.

Further reports on Trump and associates' conflicts of interest and corruption appeared through 2019, as further documented in this post.

Discussion

We noted in our last summary post on conflicts of interest and corruption in the Trump administration that the topics of corruption, health care corruption, and the likely corruption of the Trump administration remained largely anechoic.   

Despite the extensive and ever-increasing list of apparently corrupt acts by the Trump and cronies, grand corruption at the top of US government, with its potential to corrupt not just health care, but the entire country and society, still seems like a taboo topic.  The US news media continues to tip-toe around the topic of corruption, in health care, of top health care leaders, and in government, including the top of the US executive branch.  As long as such discussion seems taboo, how can we ever address, much less reduce the scourge of corruption?  The first step against health care corruption is to be able to say or write the words, health care corruption.

Once Trump left office, there has not been much more discussion.  There have been brief reports in the media that many investigations of Trump and cronies are ongoing.  For example, an article in the
Washington Post in March 2021 noted "the [NY] state attorney general has subpoenaed his lawyers, his bankers, his chief financial officer — even one of his sons.... Former president Donald Trump is also facing criminal investigations in Georgia and the District of Columbia related to his efforts to overturn the 2020 election."  Also, "In Washington, D.C. Attorney General Karl A. Racine (D) has also opened a criminal investigation into Trump’s actions on Jan. 6" and "the Justice Department, in the meantime, is conducting a broad investigation of the Jan. 6 Capitol attack."  Yet, as we documented here, prior to becoming president, Trump and his associates enjoyed practical impunity, escaping convictions and penalties multiple times. There is no certainty he will not maintain his impunity in the future.

Trump is no longer president, but he enjoys continuing support from many in his party, and has suggested he might run again.  How will we ever make a meaningful dent in health care corruption if we cannot end the impunity of our top political leadership? 

Update: State of Play in US Health Care Dysfunction Prior to the Coronavirus Pandemic

 Introduction: the Sorry History of US Health Care Dysfunction

We have been talking about health care dysfunction for a very long time, starting with a publication in 2003.

To better understand health care dysfunction, I interviewed doctors and health professionals, and published the results in Poses RM.   A cautionary tale: the dysfunction of American health care.  Eur J Int Med 2003; 14(2): 123-130. (link here).  In that article, I postulated that US physicians were demoralized because their core values were under threat, and identified five concerns:

1. domination of large organizations which do not honor these core values
2. conflicts between competing interests and demands
3.  perverse incentives
4. ill-informed, incompetent, self-interested, conflicted or even corrupt leadership
5.  attacks on the scientific basis of medicine, including manipulation and suppression of clinical research studies

After that my colleagues and I have tried to raise awareness of these and related issues, now mainly through the Health Care Renewal blog.  We also set up FIRM - the Foundation for Integrity and Responsibility in Medicine,  a US non-profit organization, to try to provide some financial support for the blog.

It has been a slog.  For years  health care dysfunction, at least we we defined and discussed it, was practically a taboo topic.  From 2003 through 2016 we felt there were only a few incremental improvement in some aspects.  However, the advent of Donald Trump and his "base," and the first years of the Trump presidency expanded the scope and increased the intensity of health care dysfunction.  It got bad enough that the phrase "health care dysfunction" actually made it to a presidential debate, albeit a Democratic primary debate, in November, 2019.  On that occasion we summarized what we thought were the ongoing issues. 

Since then, things have only gotten worse. Then in 2020 the coronavirus pandemic spread around the globe.  That only provided more opportunities for the Trump administration to amplify dysfunction.

Now, on the occasion of the Trump administration's apparent defeat in the presidential election (setting aside for the  moment any legal or extra-legal challenges to the results), I will update what the state of play in health care dysfunction was prior the pandemic.  At a later time we will discuss how the pandemic gave Trump et al an opportunity to supercharge health care dysfunction.

The Multiple Dimensions of Health Care Dysfunction Pre-Pandemic

Since 2003 we have broadened our thinking about what constitutes and causes US (and more global) health care dysfunction. Early on we noticed a number of factors that seemed to enable increasing dysfunction, but were not much discussed.  These factors notably distorted how medical and health care decisions were made, leading to overuse of excessively expensive tests and treatments that provided minimal or no benefits to outweigh their harms.  The more we looked, the more complex this web of bad influences seemed.  Furthermore, some aspects of it seemed to grow in scope during the Trump administration.

A brisk summary of these often complex issues follows.

 Threats to the Integrity of the Clinical Evidence Base

The clinical evidence has been increasingly affected by manipulation of research studies.  Such manipulation may benefit research sponsors, now often corporations who seek to sell products like drugs and devices and health care services.  Manipulation may be more likely when research is done by for-profit contract research organizations (CROs). When research manipulation failed to produce results to sponsors' liking, research studies could simply be suppressed or hidden.  The distorted research that was thus selectively produced was further enhanced by biased research dissemination, including ghost-written articles ghost-managed by for-profit medical education and communications companies (MECCs). Furthermore, manipulation and suppression of clinical research may be facilitated by health care professionals and academics conflicted by financial ties to research sponsors.

These issues did not get much attention since November, 2019, during the Trump presidency, pushed aside by the administration's "flooding of the zone" with distractions.

 Deceptive Marketing

The distorted evidence base was an ingredient that proved useful in deceptive marketing of health care products and services. Stealth marketing campaigns became ultimate examples of decpetive marketing.  Deceptive marketing was further enabled by the use of health care professionals paid as marketers by health care corporations, but disguised as unbiased key opinion leaders, another example of the perils of deliberate generation of  conflicts of interest affecting health care professionals and academics.

These issues also did not get much attention since November, 2019.

Distortion of Health Care Regulation and Policy Making

Similarly, promotion of health policies that allowed overheated selling of overpriced and over-hyped health care products and services included various deceptive public relations practices, including orchestrated stealth health policy advocacy campaigns.  Third party strategies used patient advocacy organizations and medical societies that had institutional conflicts of interest due to their funding from companies selling health care products and services, or to the influence of conflicted leaders and board members.  Some deceptive public relations campaigns were extreme enough to be characterized as propaganda or disinformation.

More recently,  as we noted here, we became aware of efforts by foreign powers to spread such disinformation for political, not just financial gain, e.g., in April, 2019, we discussed evidence that Russia had orchestrated a systemic disinformation campaign meant to discredit childhood vaccinations, particularly for the measles, which was likely partly responsible for the 2019 measles outbreak

Furthermore, companies selling health care products and services further enhanced their positions through regulatory capture, that is, through their excessive influence on government regulators and law enforcement.  Their efforts to skew policy were additionally enabled by the revolving door, a species of conflict of interest in which people freely transitioned between health care corporate and government leadership positions.

In the Trump era, we saw a remarkable increase in the incoming revolving door, people with significant leadership positions in health care corporations or related groups attaining leadership positions in government agencies whose regulations or policies could affect their former employers (look here).   We found multiple managers from and lobbyists for big health care corporations being put in charge of regulation of and policy affecting - wait for it - big health care corporations, a staggering intensification of the problem of the revolving door.

Since November, 2019, cases of US government officials traversing the revolving door continued (look here).

Bad Leadership and Governance

Health care leadership was often ill-informed.  More and more people leading non-profit, for-profit and government have had no training or experience in actually caring for patients, or in biomedical, clinical or public health research.  Lately, during the Trump administration, we began to find striking examples of top government officials expressing ill-informed, if not outright ignorant opinions about medical, health care and public health topics look here).  We had not previously expected leaders of government to be personally knowledgeable about health related topics, but traditionally they consulted with experts before making pronouncements.

Health care leaders often were unfamiliar with, unsympathetic to, or frankly hostile to their organizations' health care mission, and/or health care professionals' values. Often business trained leaders put short-term revenue ahead of patients' or the public's health.  In addition, we began to see evidence that leaders of health care corporations were using their power for partisan purposes, perhaps favoring their personal political beliefs over their stated corporate missions, patients' and the public's health, and even  corporate revenues. Then, we started seeing appointed government health care leaders who lacked medical, health care or public health background or expertise but also whose agenda also seemed to be overtly religious or ideological, without even a nod to patients' or the public' health (look here).
 
Leaders of health care organizations increasingly have conflicts of interest.  Moreover, we have found numerous examples of frank corruption of health care leadership.  Some have resulted in legal cases involving charges of bribery, kickbacks, or fraud.  Some have resulted in criminal convictions, albeit usually of corporate entities, not individuals.

In the Trump administration, corrupt leadership extends from the corporate world to the highest levels of the US government.  We discussed the voluminous reports of conflicts of interest and corruption affecting top leaders in the executive branch, up to and including the president and his family (look here). 

Since November, 2019, periodic updates about the President Trump and family's extensive conflicts of interest, and particularly how some of his conflicts appear to violate the US Constitution (eg, look  here).  Not unexpectedly, the latest version of Transparency International's Corruption Perception Index showed that the public perceived the US government under Trump has a worsening corruption problem (look here). 

One cannot expect effective enforcement of ethics rules and anti-corruption laws in such an environment.

Abandonment of Health Care as a Calling

A US Supreme Court decision was interpreted to mean that medical societies could no longer regulate the ethics of their members, leading to the abandonment of traditional prohibitions on the commercial practice of medicine.  Until 1980, the US American Medical Association had  ruled that the practice of medicine should not be "commercialized, nor treated as a commodity in trade."  After then, it ceased trying to maintain this prohibition. Doctors were pushed to be businesspeople, and to give making money the same priority as upholding their oaths. Meanwhile, hospitals and other organizations that provide medical care are increasingly run as for-profit organizations. The physicians and other health care professionals they hire are thus providing care as corporate employees, resulting in the rise of the corporate physician.  These health care professionals may be further torn between their oaths, and the dictates of their corporate managers. 

 These issues also did not get much attention since November, 2019.

Perverse Incentives Put Money Ahead of Patients, Education and Research

We have extensively discussed the perverse incentives that seem to rule the leaders of health care. Financial incentives may be large enough to make leaders of health care organizations rich.  Incentives often prioritize financial results over patient care.  Some seem to originate from the shareholder value dogma promoted in business school, which de facto translates into putting current revenue ahead of all other considerations, including patient care, education and research (look here).

These issues also did not get much attention since November, 2019.

 Cult of Leadership

Health care CEOs tend now to be regarded as  exalted beings, blessed with brilliance, if not true "visionaries," deserving of ever increasing pay whatever their organizations' performance.  This phenomenon has been termed "CEO disease" (see this post).  Afflicted leaders tend to be protected from reality by their sycophantic subordinates, and thus to believe their own propaganda.

 These issues also did not get much attention since November, 2019.

Managerialism

Leadership of health care organizations by managers with no background in actual health care, public health, or biomedical science has been promoted by the doctrine of managerialism which holds that general management training is sufficient for leaders of  all organizations, regardless of their knowledge of the organizations' fundamental mission.

These issues also did not get much attention since November, 2019.

Impunity Enabling Corrupt Leadership

Most cases involving corruption in large health care organizations are resolved by legal settlements.  Such settlements may include fines paid by the corporations, but not by any individuals.  Such fines are usually small compared to the revenue generated by the corrupt behavior, and may be regarded as costs of doing business.  Sometimes the organizations have to sign deferred prosecution or corporate integrity agreements.  The former were originally meant to give young, non-violent first offenders a second chance (look here).  However, in most instances in which corruption became public, are no negative consequences ensue for the leaders of the organizations on whose watch corrupt behavior occurred, or who may have enabled, authorized, or directed the behaviors.

These issues also did not get much attention since November, 2019.

Taboos

Some of the above topics rarely appeaedr in the media or scholarly literature, and certainly seem to appear much less frequently than their importance would warrant. We have termed the failure of such issues to create any echoes of public discussion the anechoic effect.

Public discussion of the issues above might discomfit those who personally profit from the status quo in health care.  Those involved in the leadership and governance of health care organizations and their cronies, also have considerable power to damp down any public discussion that might cause them displeasure. In particular, we have seen how those who attempt to blow the whistle on what really causes health care dysfunction may be persecuted.

However,in the Trump administration,  we began to also note examples of government officials attempting to squelch discussion of scientific topics that did not fit in with its ideology, despite constitutional guarantees of speech and press free from government control (look here).

These issues also did not get much attention since November, 2019.

Discussion

In 2017, we said that it was time to consider some of the real causes of health care dysfunction that true health care reform needs to address, no matter how much that distresses those who currently most personally profit from the status quo.

Furthermore, in 2019 we asserted that all the trends we have seen since 2017 are towards tremendous government dysfunction, some of it overtly malignant, and much of it likely enabling even worse health care dysfunction.

Now that there is the prospect of a new US administration, we hope health care and public health professionals, patients, and all citizens will have a much more vigorous response to it.  US health care dysfunction was always part of the broader political economy, which is now troubled in new and dangerous ways. As the coronavirus pandemic rages, the need to make our health care and public health less dysfunctional is increasingly apparent.  If not now, when? 

Adding (Corrupt Financial) Insult to (Coronavirus Pandemic) Injury

We have frequently discussed the voluminous evidence that President Trump, his family and his cronies have many more conflicts of interest, and have acted corruptly orders much more frequently than any other US administration (see this summary).  These conflicts of interest and corrupt actions likely have badly hurt the country and its people.  

Now a new story suggests that the administration's selective dissemination of information about the coronavirus pandemic may have enabled the enrichment of its supporters while simultaneously endangering public health.  This may be a new low.

Warning Donors and Supporters While Deceiving the Public

A report by the New York Times on October 15, 2020 suggested that early on top Trump administration officials warned favored donors and supporters that the coronavirus was much more dangerous than the administration had admitted publicly.  This allowed the recipients to personally profit: 

On the afternoon of Feb. 24, President Trump declared on Twitter that the coronavirus was 'very much under control' in the United States, one of numerous rosy statements that he and his advisers made at the time about the worsening epidemic. He even added an observation for investors: 'Stock market starting to look very good to me!'

But hours earlier, senior members of the president’s economic team, privately addressing board members of the conservative Hoover Institution, were less confident. Tomas J. Philipson, a senior economic adviser to the president, told the group he could not yet estimate the effects of the virus on the American economy. To some in the group, the implication was that an outbreak could prove worse than Mr. Philipson and other Trump administration advisers were signaling in public at the time.

The next day, board members — many of them Republican donors — got another taste of government uncertainty from Larry Kudlow, the director of the National Economic Council. Hours after he had boasted on CNBC that the virus was contained in the United States and 'it’s pretty close to airtight,' Mr. Kudlow delivered a more ambiguous private message. He asserted that the virus was 'contained in the U.S., to date, but now we just don’t know,' according to a document describing the sessions obtained by The New York Times.

The document, written by a hedge fund consultant who attended the three-day gathering of Hoover’s board, was stark. 'What struck me,' the consultant wrote, was that nearly every official he heard from raised the virus 'as a point of concern, totally unprovoked.'

The consultant’s assessment quickly spread through parts of the investment world. U.S. stocks were already spiraling because of a warning from a federal public health official that the virus was likely to spread, but traders spotted the immediate significance: The president’s aides appeared to be giving wealthy party donors an early warning of a potentially impactful contagion at a time when Mr. Trump was publicly insisting that the threat was nonexistent.

Those Who Got the Information Were Trump Cronies and Supporters

 Note that those most likely to hear about the more realistic and dire, but non-public predictions of Trump insiders were people who were supporters of and donors to Trump et al at the Hoover Institute, whose board

includes the media mogul Rupert Murdoch and the venture capitalist Mary Meeker, neither of whom attended the meetings in February

Also,

The Hoover Institution has close relations with the Trump administration, and the White House has pulled from its ranks to fill top positions. Joshua D. Rauh, one of the White House economists addressing the Hoover crowd on Feb. 24, has returned to the institution, where he worked previously. Kevin Hassett, who moderated the panel and has served as the chairman of the White House Council of Economic Advisers, is now a Hoover Institution fellow.

Receiving Information Enabled Personal Profit

Those who heard about the Trump administration insider's non-public concerns soon acted on them, thus profiting from their enhanced knowledge of the pandemic to come:

'Short everything,' was the reaction of the investor, using the Wall Street term for betting on the idea that the stock prices of companies would soon fall.

That investor, and a second who was briefed on the Hoover meetings, said that aspects of the readout from Washington informed their trading that week, in one case adding to existing short positions in a way that amplified his profits. 

 

Corruption that Endangered Public Health

 Note that the Times article stated

it is not apparent that any of the communications about the Hoover briefings violated securities laws. The Justice Department and the Securities and Exchange Commission would have several hurdles to clear before establishing that Appaloosa or other funds that received insights from Mr. Callanan, either directly or through intermediaries, acted improperly.

However, consider this: The Trump administration had a duty to manage the growing coronavirus pandemic so as to protect the lives and health of the American people.  The administration had access to considerable information about the pandemic which was not widely available.  We know from reporting by Bob Woodward that President Trump knew how serious the pandemic was likely to be, but concealed that information to prevent "panic." In particular, per Reuters, September 9, 2020:

'I wanted to always play it down,' Trump told author Bob Woodward on March 19, days after he declared a national emergency. 'I still like playing it down, because I don’t want to create a panic.'

Yet, the Trump administration did not act on the information it had.  Many public health experts believe its inaction resulted in the loss of thousands of lives, and resulted in many more cases of COVID-19, some quite morbid that might have been prevented by more forceful action.  Trump avoided effective action while constantly reassuring the public. Meanwhile, his appointees were giving Trump supporters and donors cause to think that the pandemic would actually be quite serious.  Some of them took advantage of that information to make financial transactions, like selling stocks short, enabling them to personally profit.

Transparency International defines corruption as

Abuse of entrusted power for private gain

Whether or not they were legal, the actions above by Trump and his political appointees appeared to have abuse their entrusted for the private gain of their supporters and donors.

We have frequently discussed, most recently here, the many conflicts of interest affecting and corrupt action by Trump, his family, and his cronies.  This case above adds to that list.  

We know of one way that the conflicts of interest generated by Trump's continued ownership of the Trump Organization may have enabled his mismanagement of the coronavirus pandemic. We discussed here and here how concerns about financial losses incurred by the Trump Organization due to lockdowns and other restrictions by state and local public health authorities to manage the pandemic may have influenced Mr Trump to urge premature reopening of the economy.  Thus he may have prioritized his personal finances over public health.

However, the danger of the apparent corruption revealed by the newest case seems more direct. Trump and cronies' restricted dissemination of information about the pandemic allowed enrichment of their supporters while endangering the population at large. In any case, once again, private profit trumped public health.

Yet up to now, protests of his conflicts of interest and corruption have been feeble, while the country has been distracted by each new surprise from a presidency run like a reality television show.  How much longer can the country survive our lack of focus on how we are threatened?

 

 

 

The Remarkable Case of the CEO of the Brigham and Women's Hospital Who Renounced a Major Conflict of Interest

Introduction; a Conflict of Interest Affecting the Trial of Moderna COVID-19 Vaccine

On July 17, 2020, the Brigham and Women's Hospital, a prestigious teaching hospital in Boston, announced it would be a major center for the randomized controlled trial of Moderna's mRNA based vaccine for COVID-19.  This would be the first of several eagerly awaited major RCT's of newly developed vaccines for this dangerous pandemic.  The press release noted that the hospital would be:

a clinical research site as part of the COVID-19 Prevention Network (CoVPN), funded by the National Institutes of Health. In addition, Lindsey Baden, MD, an infectious diseases specialist at the Brigham and an expert in vaccine development for viral diseases, will serve as co-principal investigator for the study.

The press release also included this disclosure:

Dr. Betsy Nabel, the president of Brigham and Women’s Hospital, has been a member of the Moderna Therapeutics Board of Directors since 2015 and has a financial interest in the company. Since its inception, this personal relationship has been reviewed and approved in accordance with Mass General Brigham conflict of interest policy and procedure, including a recent review in connection with the Phase 3 Study, and has been disclosed to the NIH/NIAID.

Although Dr Nabel would not directly participate in the trial, Dr Baden would apparently indirectly report to her as hospital CEO even though she would simultaneously be a board member of the company whose vaccine the trial was assessing. 

Another Example of What Was Once a "New Species of Conflict of Interest"

Thus Dr Nabel appeared to have a severe conflict of interest, the latest example of what we once called "a new species of conflict of interest."

In 2006, we first noticed that leaders of academic medicine also were serving as board members of large for-profit health care corporations.  The first example we discussed was that of Marye Anne Fox, Chancellor (equivalent to president) of the University of California - San Diego, and hence the person to whom the University of California, San Diego School of Medicine and its academic medical center report. The conflict was between this position, and her service as a member of the board of directors of Boston Scientific, a medical device manufacture, and the board of directors of Pharmaceutical Product Development Inc., a contract research organization.

Later in 2006, we discussed a "new species of conflict of interest." 

Medical schools and their academic medical centers and teaching hospitals must deal with all sorts of health care companies, drug and device manufacturers, information technology venders, managed care organizations and health insurers, etc, in the course of fulfilling their patient care, teaching, and research missions. Thus, it seems that service on the board of directors of a such public for-profit health care company would generate a severe conflict for an academic health care leader, because such service entails a fiduciary duty to uphold the interests of the company and its stockholders. Such a duty ought on its face to have a much more important effect on thinking and decision making than receiving a gift, or even being paid for research or consulting services. Furthermore, the financial rewards for service on a company board, which usually include directors' fees and stock options, are comparable to the most highly paid consulting positions. What supports the interests of the company, however, may not always be good for the medical school, academic medical center or teaching hospital.

As Robert AG Monks put it, board members must "demonstrate unyielding loyalty to the company's shareholders" [Monks RAG, Minow N. Corporate Governance, 3rd edition. Malden, MA: Blackwell Publishing, 2004. P.200.]  (Of course, after the global financial collapse of 2008 made us sadder and a little wiser, we realized that many board members actually seem to have unyielding loyalty to their cronies among top management.).

Dr Nabel's position on the board of directors of Moderna appears to be another example of this "board-level" conflict of interest.

Dr Nabel Does the Right Thing

On July 30, in the Boston Globe, Jonathan Saltzman reported that Dr Nabel had renounced her board position:

Dr. Elizabeth Nabel, president of Brigham and Women’s Hospital, said Thursday she was resigning from the Moderna board of directors after the Globe inquired about whether her position at the Cambridge biotech company conflicted with her hospital’s leadership role in a large study of Moderna’s experimental COVID-19 vaccine.

In fact Dr Nabel made the announcement while Mr Satzman was in the final stages of writing his article.  I know this because he had interviewed me about her conflict of interest earlier in the day.  So I got to unexpectedly make a new comment:

She did the right thing, It eliminates one issue that could have led to unfounded skepticism about this trial, and this is a trial where people have to trust the results.

In fact, this is the only case I can recall in which a top leader of a academic health care institution resigned from a for-profit health care corporate board after the conflict of interest presented by board membership was publicly pointed out.

Furthermore, the Globe article noted:

After Nabel announced her resignation, the Globe asked Brigham and Women’s whether she intended to keep the $6.5 million she collected in the recent sale of her Moderna stock.

Erin McDonough, a hospital spokeswoman, said, 'Dr. Nabel is considering a number of options, including charitable contributions.'

As we had previously discussed on Health Care Renewal, board level conflicts of interest can be extremely lucrative.  A typical board member of a large health care corporation makes hundreds of thousands of dollars in salary, and can collect stock options and other financial instruments worth millions.  Such compensation is obviously  a strong incentive to continue the conflict of interest.  Yet here a board member is quitting, and at least  considering giving away millions of dollars worth of stock to nullify her conflict.  That is truly remarkable.

Perhaps in this age of a dangerous pandemic, and its continuing reckless mismanagement by the US president (for example, look here), health care leaders are thinking more about what is really important. As Mr Saltzman wrote:

Medical ethics experts said it was worrisome that the head of the Harvard-affiliated teaching hospital had a financial stake in the vaccine, particularly given that many people are already skeptical of vaccines. Recent public opinion polls show up to half of Americans are reluctant to get a COVID-19 vaccine when one is approved.

'Anti-vaxxers, critics, and kooks will use any appearance of financial conflict to undermine trust in vaccines,' said Dr. Arthur Caplan, a professor of bioethics at New York University Langone Medical Center. 'It’s just hyper-dangerous now.'

So it seems that Dr Nabel recognized the danger to the public, and to reduce it was willing to take action which would involve at least some degree of personal sacrifice.

We can only hope that others will follow her.  

 

Did the Conflicts of Interest Generated by President Trump's Ownership of the Trump Organization Cause His Enthusiasm for the Premature Reopening of the Economy, and its Deadly Results?

Introduction: Trump's Personal Incentives to Push Rapid Reopening

Back in March, 2020, we posted about the possibility that President Trump's already growing enthusiasm for "easing restrictions on movement sooner than federal public health experts recommend" was due to his personal financial interests.  By that time, the Trump Organization, in whom Trump has the largest ownership share, had closed six of its seven biggest revenue producing properties, and was likely dreading the need to refinance considerable outstanding debt.

We wrote at the time:  "This raises the strong and extremely worrisome concern that he is thinking of taking measures that may risk the lives of thousands or millions of people to preserve his wealth and personal power."

Since then, Trump became an even more enthusiastic proponent of rapid reopening.  As we discussed in April, 2020, after the curve of the coronavirus pandemic began to flatten in the first heavily affected areas in the northeast US, supposedly popular protests broke out calling for the end of onerous social distancing measures to let the economy recover.  President Trump then jumped in, calling for the "liberation" of multiple states from these  measures.

Trump wrote: 'LIBERATE MINNESOTA' and then, 'LIBERATE MICHIGAN' and then, 'LIBERATE VIRGINIA, and save your great 2nd Amendment. It is under siege!'

After that, many Trump supporters among state and local politicians jumped in to "reopen" before the virus was fully controlled in their areas.  Now, viral surges have occurred in many states, predominantly in those with such political leadership, such as Arizona, Florida, Georgia, Texas, etc.  We summarized the worsening state of the pandemic in Arizona as an example here.  Some headlines just from the last few days:

Arizona Reopened Early to Revive its Economy.  Now, its Workers and Businesses Face Even Greater Devestation

Florida Hospitals Stretched to Capacity by Acute Coronavirus Outbreak

How Politics, Inequity and Complacency Undermined Texas's Fight Against COVID-19


Yet Trump has done nothing to deter his supporters' commitment to reopening even in the face of worsening viral surges. Meanwhile, more evidence has accumulated suggesting that Trump's laxness about fighting the pandemic may be due to the financial risk that he personally facing due to the virus and the effects of measures taken to combat it.

First, the Trump Organization is clearly under increasing financial threat.  Next, the organization is taking increasingly drastic measures to temporarily fend off that threat.  Finally, these measures include its own premature reopening of properties, potentially enabling spread of the virus.

Before we review some of the specifics, keep in mind that Trump's financial dealings are extremely opaque.  Unlike other US presidents, he has never revealed any recent tax returns, nor other important details of his apparently large and complex financial picture.  Nonetheless, we have learned some important things.

Trump Organization is Increasingly Under Financial Threat

Trump Organization Closes More Properties, Cuts Costs and Lays Off Workers

On April 3, 2020, the Washington Post reported:

The Trump Organization has laid off or furloughed about 1,500 employees at hotels in the United States and Canada as the coronavirus pandemic inflicts further pain on the president’s private business.

With most of President Trump’s hotels and clubs closed amid stay-at-home orders around the world, the Trump Organization has responded by slashing costs, much like other companies in the hospitality and tourism industries. The Trump Organization has laid off or furloughed employees at hotels in New York, the District of Columbia, Miami, Chicago, Las Vegas, Vancouver and Honolulu, according to public filings and people familiar with the properties, including union officials.

Seventeen of Trump’s clubs and hotels have closed. The remainder of Trump properties are operating at a fraction of their normal capacity: hotels running with restaurants closed, golf clubs operating with clubhouses shut down, and golfers warned not to share carts or touch the flagsticks.

All told, the closed properties generated an average of $650,000 in revenue for Trump per day, according to Trump’s past financial disclosures.

The Post also noted that by then:

As of Friday, 17 of Trump’s 24 clubs and hotels around the world were closed. The latest to close was Trump’s hotel in Vancouver, Canada — which announced its closure Thursday. 

[Trump's business partner in Vancouver, Joo Kim] Tiah said that 213 workers had been laid off and 18 kept on, with 11 of those working reduced hours.

In Chicago, the Trump hotel told investors on Friday that it had made the 'heartbreaking decision to' lay off two-thirds of its staff, required the remaining staff to work on two to three days a week, and suspended 401(k) contributions for all. Even the lights had been turned down to save money. 'In an effort to conserve energy, most common areas . . . are illuminated and heated at a minimum level,' the hotel told its investors in a letter obtained by The Washington Post.

[Trump Vancouver, under construction in 2016]


The estimate total of laid off and furloughed workers would soon rise.  On June 12, 2020, the Washington Post reported:

Interviews with current and former Trump Organization employees and tenants, and emails obtained by The Washington Post, show the pandemic in particular has rattled operations at the company. With thousands of Trump’s hotel rooms empty, the company laid off or furloughed more than 2,800 employees and scoured for even the smallest savings. It eliminated flowers, chocolates and newspapers at its New York hotel and turned off lights in common areas in its Chicago hotel to save on electricity, according to letters that hotel management sent to investors.

'This was not just a step down,' Eric Danziger, the chief executive of Trump Hotels, told board members of Trump’s Chicago hotel on April 22, according to an account of his phone call obtained by The Post. 'This was a steep dive.'

Trump Organization Likely Is Losing Rental Income and Revenue from Sales of Real Estate

Revenue losses were not just from hospitality income.  The Trump Organization rents space in hotels, clubs, and other properties to businesses whose ability to pay rent was also decreased due to the virus and measures to fight it.  

On June 12, 2020, the Washington Post reported:

One of the tenants in Trump-owned buildings that is almost certainly asking to pay less is Starbucks, which wrote to its thousands of landlords May 5 asking for a year’s worth of reduced rent beginning June 1. The coffee chain rents space at Trump Tower in New York and at Trump’s D.C. hotel. In Washington, Starbucks pays Trump $14,118 per month, increasing to $15,787 a month in 2023, according to Trump Organization documents obtained by The Post.

Also,

A massive Italian restaurant had been scheduled to open later this summer on the ground floor of a Wall Street skyscraper owned by Trump. But instead, as the coronavirus spreads, Nero.lab’s Italian Food Zone will probably have to adjust its initial concept — an 18,000-square-foot food hall where diners were to share communal tables and wait in lines for gelato and espresso. 

And,

Another tenant at 40 Wall Street is Neapolitan Express, which operates pizza restaurants and food trucks in New York. The company has rented space in the building since 2015, said owner Max Crespo.

Crespo’s business has cratered — revenue dropped 27 percent in March, 55 percent in April and 90 percent in May

The Trump Organization also makes money by selling condominiums.  However, on July 20, 2020, the Chicago Sun-Times reported:

It doesn’t take so much do-re-mi to buy into Chicago’s Trump International Hotel & Tower as it once did, and that’s striking sour notes for owners in the building.

Prices have fallen so hard that, if you have a mind to, you can get a unit on the cheap, relatively speaking. Some condos that are hotel rooms in the 98-story building can be had for less than $200,000.

In particular,

sales of the residences for the first half of this year averaged $566 a square foot, down 42% from the same months two years ago and 25% from 2019.

The prices are their lowest since the Great Recession of 2008 and its attendant housing bust. The building in the best of times has cleared its benchmark of $800 a square foot but has seldom reached its aspirations of $1,000.

And the same property was already having big problems renting business space,

Lastly, there’s the tower’s retail space, which Trump has never been able to lease. He sought Michigan Avenue prices for space unlikely to draw Michigan Avenue traffic.

[Trump Tower Chicago]


Finally, Trump might have been looking forward to raising considerable revenue by selling his lease on the Trump International DC Hotel,  a flagship property,but that now looks like a non-starter.

[Interior, Trump International DC Hotel]


As reported in the Washington Post, March 31, 2020:

The commercial real estate industry has ground nearly to a halt because of coronavirus shutdowns, forcing buyers and sellers of major properties, including President Trump’s company, to put their plans on hold.

The Trump Organization, which he still owns, has had to press pause on the proposed sale of its D.C. hotel lease because of the stock market collapse as potential buyers wait for banks and investors to return to normal operations.

The company’s sales representative, Jeffrey Davis of JLL, confirmed to The Washington Post that the proposed sale of Trump’s lease to the federally owned Old Post Office Pavilion has been set aside as the industry recovers.

Note that the above references stock market collapse was due to the economic effects of the then uncontrolled pandemic.


Trump May Have Difficulties Refinancing Existing Debt


Note that our original post suggested that loans from Deutsche Bank could be a major source of stress.  By June 30, a report in Mother Jones suggested that stress from the need to finance existing debt was even bigger than it first appeared:

On financial disclosure forms, Trump has reported holding 14 loans on 12 proper­ties. At least six of those loans, representing about $479 million in debt, are due over the next four years. Some are guaranteed by Trump himself, meaning a creditor could come after his personal—not corporate—­assets if he defaults.

In particular,

Trump’s biggest creditor is Deutsche Bank, which in the late 1990s took a gamble on the real estate developer whose history of corporate bankruptcies made him untouchable by most other lenders. Although Trump and the Frankfurt-based bank pulled off several profitable deals, eventually Deutsche’s commercial lending division learned the hard way one reason why other banks considered him persona non grata: If pushed by his creditors on payments, Trump shoves back. In 2008, after he defaulted on a loan for his Chicago hotel and condo development, he filed a multibillion-­dollar suit accusing Deutsche Bank and others of contributing to the recent financial meltdown, which he blamed for his inability to repay the loan.

Nevertheless, Deutsche’s private banking division, which caters to wealthy clientele, continued to lend to Trump, giving him $125 million, spread over two loans, to finance the purchase and renovation of his Doral golf resort in 2012. Both are floating rate loans, meaning the interest rate fluctuates based on market conditions, which lending experts say usually indicates they are interest-only loans. If so, Trump probably hasn’t paid down much if any of the principal and will owe something close to the whole $125 million when the loans come due in 2023.

In 2014, Trump took out a separate floating loan from Deutsche’s private bank to bankroll the development of his luxury hotel in Washington, DC. The balance of this $170 million debt is payable in 2024. That year, Trump will also owe Deutsche between $25 million and $50 million in connection with his Chicago hotel and complex.

In addition,

Trump has received additional loans from a company named Ladder Capital, a financial firm that specializes in bundling commercial debt into mortgage-backed securities. Companies like Ladder are often lenders of last resort for people and companies that, for one reason or another, have difficulty obtaining money from traditional banks (ahem, Trump). Such firms are willing to take risky bets because they securitize the debt and pass the responsibility for it on to investors. Trump has two Ladder loans due over the next several years: a $100 million interest-only mortgage on Trump Tower and a roughly $13 million loan against Trump Plaza. The Trump Tower loan is up in September 2022.

Trump may have considerable trouble refinancing these loans:

Nancy Wallace, a real estate finance professor at University of California, Berkeley’s Haas School of Business, says the scrutiny that Deutsche Bank has faced may scare off other banks. 'I think any bank I can think of in the United States would have exactly the same response: He is toxic. Exposing yourself to that kind of oversight under the current regulatory reality, for lenders who are large enough to provide capital to him, is just a nonstarter.'

Instead,

Commercial lending experts say a firm like Ladder Capital, which relies on a more cold-blooded financial calculus, might be more amenable to lending to Trump again. But with his business taking a sharp hit to its revenues for possibly years to come due to the pandemic, Trump might not like the terms, which could be less favorable than those of his original loans.

So the Trump Organization has lost large amounts of revenue from its hospitality operations and real-estate operations while it is facing the need to soon finance considerable existing debt under unfavorable conditions.
 
Dire Measures to Fend Off Financial Threat

So it is not surprising that as the pandemic continues, the Trump Organization is taking more drastic steps to raise money, cut costs, and fend off the financial threat.


Trump Organization Sought to Defer Loan Payments and Other Financial Obligations

As first reported by the New York Times on April 2, 2020:

With some of its golf courses and hotels closed amid the economic lockdown, the Trump Organization has been exploring whether it can delay payments on some of its loans and other financial obligations, according to people familiar with the matter and documents reviewed by The New York Times.

Representatives of Mr. Trump’s company have recently spoken with Deutsche Bank, the president’s largest creditor, about the possibility of postponing payments on at least some of its loans from the bank.

And in Florida, the Trump Organization sought guidance last week from Palm Beach County about whether it expected the company to continue making monthly payments on county land that it leases for a 27-hole golf club.

A few weeks later, on April 21, 2020, the New York Times reported that since the Trump Organization would not be able to quickly sell its lease on Trump International DC Hotel, it was trying to reduce its lease payments on the property:

President Trump’s signature hotel in the nation’s capital wants a break on the terms of its lease. The landlord determining the fate of the request is Mr. Trump’s own administration.

Trump International Hotel, just a few blocks from the White House, had been a favored gathering place for lobbyists, foreign dignitaries and others hoping to score points with the president. But like most hotels, it is now nearly empty and looking to cut costs because of the coronavirus pandemic.

In recent weeks, the president’s family business has inquired about changing its lease payments, according to people familiar with the matter, which the federal government has reported amount to nearly $268,000 per month.

The Trump Organization owns and operates the luxury hotel, but it is in a federally owned building on Pennsylvania Avenue. As part of its deal to open the 263-room hotel, the company signed a 60-year lease in 2013 that requires the monthly payments to the General Services Administration.

As an aside, the article went on to mention that the Trump Organization's negotiations with Deutsche Bank, Palm Beach County, and now the GSA all generated their own conflicts of interest, eg,

The G.S.A. did not immediately respond to a request for comment, including about whether its other tenants had made similar inquiries. The White House also did not respond to a request for comment.

> Companies across the country have pleaded for relief from lenders and landlords, but the Trump Organization’s submission presents a particular predicament.

If it denies the request, the agency risks running afoul of the president, who appoints its leader; but if it accommodates the Trumps, the agency is likely to draw fire from critics.

If anything, this minimizes the issues.  Since the GSA is part of the executive branch which the president leads, he is essentially negotiating with himself, a huge conflict of interest.  Furthermore, were the GSA to reduce the lease payment, this amounts to the federal government making yet another payment to Trump.  Yet the US Constitution's "domestic emoluments clause" prohibits the President from receiving "any other Emolument [payment, thing of value] from the United States, or any one of them." (See our post on Trump's vast conflicts of interests here.)


Trump Organization Asked for Aid from European Countries for its European Properties

As Bloomberg reported on April 22, 2020:

The Trump Organization is seeking U.K. and Irish bailout money to help cover the wages for bartenders, bagpipers and other employees furloughed from its European golf properties because of the coronavirus lockdown.

These resorts were already operating at losses before the pandemic:

Trump has invested several million dollars over the past decade to buy and revamp the three resorts in Scotland and Ireland, which have continued to lose money, according to their government disclosures.  It's unclear whether Trump has financed the resorts through bank loans or the Trump Organization's cash flow.

At least one local official in Scotland, Martin Ford in Aberdeenshire, opposed the bailout:

The huge tab for this will be borne throughout the whole population through higher taxes.  If what he says about his personal wealth is true, Trump doesn't need the money, and I don't see why U.K. taxpayers of the future should be helping out.

Again, should the Trump Organization receive such a bailout from a foreign government, it would again be in violation of the US Constitution's "foreign emoluments clause," which prohibits the President from receiving "without the Consent of the Congress, accept of any present, Emolument [payment, thing of value], Office, or Title, of any kind whatever, from any King, Prince, or foreign State." (See our post on Trump's vast conflicts of interests here.)


Trump Pushing to Open Properties Quickly, Possibly Subjecting Employees and Guests to Increased Risk of COVID-19

Finally, Trump's push to increase revenue, presumably augmented by all the stresses above, may be leading to premature openings and enhancement of operations at Trump Organization properties.  As reported by the New York Times on June 23, 2020:

the reopening of Trump National Doral, the most important source of revenue for the president’s strained family business, came as new cases of the coronavirus spiked in surrounding Miami-Dade County and public health officials urged caution about resuming normal activity.

Virus cases in Florida exceeded 100,000 on Monday, with more than 3,100 deaths. About one-quarter of the cases have been in Miami-Dade County, a per capita rate twice the number statewide. On Tuesday, the county reported an average positive test rate of 12.4 percent in recent weeks. The latest single-day positive rate rose to 25.9 percent.

Nonetheless,

Poolside at President Trump’s resort near Miami, dozens of guests sunned last weekend on lounge chairs and chatted in cabanas. Golfers fanned out across multiple courses, and the hotel lobby hummed with activity for the first time in months.

Despite the local surge,

many visitors and some staff members did not wear masks — something the president himself has been reluctant to do in public.

Similarly, the Trump Organization has rushed many other properties back into operation:

With the reopening on Monday of the Trump Organization’s Ferry Point golf course in the Bronx, all of the 20 Trump properties in the United States are up and running again, at least in part; even the tasting room at the Trump Winery in Charlottesville, Va., is once again welcoming visitors.

We have discussed previously how Trump and some political leaders who support him have personally acted in ways that may have increased the spread of coronavirus. There is reason for concern that the rushed reopening and expansion of operations at Trump Organization properties may further spread the virus  Per the NY Times article:

Experts say it is possible for businesses like Trump National Doral to operate safely, but they also acknowledge that the president’s properties present a special case.

'The bottom line is, can a leader lead by example?' said Dr. Aileen Marty, an infectious disease expert with Florida International University who helped design Miami-Dade County’s safety protocols for businesses. “That’s what needs to happen at every type of business — wear a mask, practice hygiene, social distance.”

When the president recently visited his golf club in Bedminster, N.J., while in the area to speak at the West Point graduation ceremony, temperature checks were required, but only when he was on the property, a person familiar with the situation said. There is no requirement that golfers or guests at Bedminster wear masks, and almost no one has done so, other than food service employees, the person said.

Discussion

There is mounting evidence that the rapid reopening of parts of the US has led to a big surge in COVID-19 infections, and now we are seeing the resulting surge in hospitalizations, severe illness, and deaths.  Many hospitals in the affected areas, chiefly in the southern US among states led by governors who are political supporters of Trump, are under increasing strain.  At least one rural county in Texas is now triaging admissions, that is, barring admission for coronavirus by patients judged to have poor chances of survival (look here).  Such emergency triage has rarely been necessary lately in the country that spends more than any other per capita on health care.
 
President Trump was clearly an effective  cheerleader for rapid reopening (look here).  Some have suggested he did so because of his strong focus on the economy, and distress that stay at home orders, lock-downs, and forced business closings led to recession.  Less charitably, others thought that he was worried that the economic decline undermined his major political accomplishment, a previously growing economyh.  An even worse reason for pushing premature reopening, however, would be conflicts of interest, Trump's concern for his own personal fortune.  Yet there certainly is now a lot of circumstantial evidence that supports that theory.

There certainly is voluminous evidence of Trump's and the Trump family's conflicts of interest and  corruption during his presidency (look here).  There are many possible ways that they have compromised Trump's decisions, making them more responsive to his personal and family interests than those of the country he was sworn to protect and defend.  Now there is reason to suspect his conflicts may have led to a rising toll of disease, morbidity and mortality.

Yet up to now, protests of his conflicts of interest and corruption have been feeble, while the country has been distracted by each new surprise from a presidency run like a reality television show.  How much longer can the country survive our lack of focus on how we are threatened?