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Another little tidbit buried in the business section of the New York Times (“A Losing Year for Countrywide, but not for Chief“, NYTimes 4/25/08 page: C3). It describes the compensation package for Angelo R. Mozilo, the CEO for Countrywide, during a year when Countrywide lost $704 million dollars and lost 79% of its share value. This was the first time in more than 30 years that Countrywide lost money.

Before we review what this business genius made in the last year of his tenure, let’s see what the consequences of his decisions were… As already stated, the company lost $704 million and share holders lost a huge amount of share value, Countrywide was then bought at firesale prices by Bank of America… Oh, and 11,000 rank and file employees lost their jobs. And the Countrywide meltdown was a major contributor to the current national and international credit crisis.

Mr. Mozilo, on the other hand, made:

• $121.5 million from exercising Countrywide stock options
• $20 million from additional stock and option awards
• 1.9 million in salary
• $176,513 in “other compensation”
• $44,454 in usage of corporate aircraft for personal use
• $8,581 for country club dues
• $23,755 in usage of company cars

He was also “entitled” to $37.5 million in severance pay ($3,409 for each of the 11,000 employees laid off) but was shamed into turning it down.

Just another example of why this country is in decline. We have a whole class of executives who are in their positions, not out of merit, because they know how to work their connections, select a board of directors full of cronies, and engineer obscene compensation packages. These guys through their incompetence and corruption have done immense harm to their employees, their investors, their customers, the tax payers, and the entire country but are themselves totally shielded from the consequences of their actions.

It’s hard to decide which Federal agency is the most corrupt these days but Interior is certainly in the running for that prize.

Today’s New York Times (24 March 2007) has a front page article Ex-Interior Aide is Guilty of Lying in Lobbying Case. The second highest official in the Dept. of Interior, J. Steven Griles, pleaded guilty to lying before a Senate committee about his ties to Jack Abramoff, the Republican lobbyist who is now in prison.

According to the article, Mr. Griles told the Senate committee he had “no special relationship” with Jack Abramoff even though Abramoff routinely sought and received advice from Mr. Griles. He also failed to mention that he had a sexual relationship with one Italia Federici. Ms. Federici is the president of the Council of Republicans for Environmental Advocacy which received $500,000 from Mr. Abramoff. As Mr. Giles may have said, “Advocate this, honey!”…

The article also mentions that Mr. Griles had teamed up with a top ConocoPhillips lobbyist to buy a $980,000 vacation home. This purchase was approved by Sue Ellen Wooldridge, a top official in the Dept. of the Interior at the time. She also ended up as a co-owner of the vacation home. Conflict of Interest? What conflict of interest? Ms. Wooldridge is now, erh, “living in sin” with Mr. Griles in Falls Church, VA. (I know, I know… nobody gets married these days but heck, these are Republicans! Where’s their family values!?)

Ms. Wooldridge a former solicitor (No, not that kind!… a lawyer!) and senior aide to Secretary of the Interior, Gail Norton, ended up as a lawyer at the Justice Dept. prosecuting environmental cases… Including one against Conoco Phillips which she, erh, dropped.

Just how does the Food and Drug Administration decide what drugs or devices to approve for use by the public?

These decisions are made by FDA Advisory Committees made up of experts in the field.

Today’s New York Times (22 March, 2007) has an article F.D.A. Rule Limits Role of Advisors Tied to Industry which says that advisory committee members will (for the first time) be barred from voting on approval for a company’s product if they have received money from that company or a competitor. And if they have received more than $50,000 from that company or a competitor within the last 12 months then they cannot serve on a committee judging that company’s products (less than $50k is just hunky dory ).

FDA Acting Deputy Commissioner Randall W. Lutter stated that a “signficant number” of the agency’s current advisers would be affected by this policy.

What that means, of course, is that up until now, many of the people responsible for approving drugs and medical devices have been routinely accepting tens of thousands of dollars a year from the company’s whose products they were approving. Smells a just a bit, don’t you think?

The article describes a situation in 2005 where 10 of the advisers who voted for Bextra to remain on the market and Vioxx to return to the market had accepted tens of thousands of dollars from the manufacturers. If the tainted advisors had not been allowed to vote, the products would not have been allowed back on the market since the majority of advisers who had not accepted money had voted against approval.

Other little tidbits from the article; under FDA rules an adviser cannot vote if they hold more than $100,000 in stock in the manufacturer (but holding $99,000 or less is hunky dory ).

One needs to remember that the previous FDA Commissioner, Lester Crawford, recently pleaded guilty to charges of filing false financial disclosure forms and conflicts of interest. The government had charged that Crawford and his wife owned stock in several companies that fell under FDA regulation, and failed to fully disclose that information as required by federal law. The court papers also charge that Crawford assured federal ethics officers that he and his wife had sold stock in those companies, when they had not.

Crawford’s attorney, Barbara Van Gelder, said that under a plea agreement, her client would not dispute the government’s charges, and would likely face fines and a possible prison term of up to two years.

Click here to read the Department of Justice news release on the case’s outcome.

Today’s NY Times has an article (A Health Care Plan So Simple, Even Stephen Colbert Couldn’t Simplify It by Robert H. Frank an economics professor at Cornell – New York Times, February 15, 2007; page C3) which is worth reading.

In his State of the Union address, President Bush proposed tax cuts to make health insurance more affordable to the uninsured. Apparently Stephen Colbert (of Comedy Central) had this comment on the President’s plan:

“It’s so simple. Most people who can’t afford health insurance also are too poor to owe taxes. But if you give them a deduction from the taxes they don’t owe, they can use the money they’re not getting back from what they haven’t given to buy the health care they can’t afford.”

Which does cast GW’s plan in its proper light… as a cruel joke similar to the rest of his policies.

But Professor Frank goes on to give a very well reasoned case for why a single-payer healthplan makes sense for people at all income levels and why it should save everyone money. He also outlines the underlying motivations for the forces opposing a single-payer system.

Rather than cut and paste a bunch of quotes from the article, I will post a link to the NYTimes copy of the article here.

The US healthcare system is a shambles (e.g. 44 million uninsured, the highest per-capita spending in the world but health statistics among the worst outside the Third World, etc.) but one of the bigger problems is the sky-rocketing costs of prescriptions drugs.

One of the current battles going on in the newly Democratic Congress is an attempt to control the costs of prescription drugs purchased under Medicare Plan D. The previous Republican-controlled Congress (having received $ millions from Big Pharma) had explicitly forbidden Medicare from even negotiating on price with the pharmaceutical companies.

The “so-called” ethical drug industry (the “so-called” modifier has been applied to Big Pharma since the 60’s but only now is the general public really understanding why the term was coined) has long held that any attempt to control their prices would turn off the never ending fountain of miraculous remedies that these white-coated priests of science and medicine produce. Never mind the fact that they are perpetually the most profitable industry in the world.

There was a recent headline article (Showdown Looms in Congress Over Drug Advertising on TV; January 22, 2007 by Milt Freudenheim) in the New York Times that pointed out that the pharmaceutical industry is on track to spend $4.5 billion on TV advertising directed at consumers. This is up from $1.1 billion in the late 1990’s.

I think anyone who watches prime-time TV has noticed that virtually all the ad’s are now for prescription drugs (sleep-aids, cholesterol-lowering remedies, remedies for incontinence, etc.). The focus of the New York Times was on the amount of false and misleading information is being provided in these ad’s but my feeling is this direct-to-consumer advertising represents an easy $4.5 billion in immediate savings to the consumer and taxpayer if it was outlawed. I don’t think prescription drugs should be advertised to consumers at all.

You could also save billions by eliminating all the free lunches, all-expenses-paid junkets, and gifts that the pharmaceutical industry uses to reward our more corrupt medical professionals for prescribing (or mis-prescribing) their products.

And then you could save another few billion dollars by eliminating the high-pressure pharmaceutical salesmen that infest our doctors’ offices, clinics, and hospitals. According to a recent Boston Globe article there are 6 pharmaceutical salesmen for every doctor in Massachusetts. I imagine the ratio is similar for all the other states.

And there might be a few million dollars to be saved by eliminating the stream of money that Big Pharma’s lobbyists use to corruptly influence our legislators.