Tuesday, May 31, 2011

Where in the World Do You Find Corruption? Guess Again

Our good friends over at the Health Care Renewal blog kindly called attention to this short piece by Richard Horton in The Lancet:

Horton was attending a meeting of a UN Commission on Women's and Children's Health in Dar es Salaam and witnessed an interesting performance by Hamadoun Touré, Secretary General of the International Telecommunication Union. Touré (says Horton) "has a reputation for being blunt and outspoken. He surpassed himself last week." Toure stated: “There is more corruption in the G8 countries than in the whole of Africa.... We are just running away from the problem.” WHO Director-General Margaret Chan and Commission co-chair Jakaya Kikwete both jumped in to try to repair the damage, lest the rich countries think that the UN was not sufficiently grateful for their donations. Horton described their intervention as an attempt "to pull their colleague back from the brink of professional suicide....But Touré had a point too. And most of us in the room knew it." (The Health Care Renewal folks found it instructive that apparently, telling the truth at a meeting of a health-related UN commission is considered "professional suicide.")

The idea that there may be more corruption in the richest eight nations of the world than in all of Africa reminded me of a piece I happened to hear on NPR's Morning Edition some time ago (December 2009 to be exact):

Former Afghan finance minister Ashraf Ghani freely that corruption among Afghan officials is serious and rampant, but he then objected that it's disingenuous for the US to point fingers: "One [type of corruption] that is legal, and that's the U.S. corruption because it's a system of slicing of the pie. So, out of a dollar of civilian aid only 10 cents gets to be spent in Afghanistan, out of military aid only 30 cents gets to be spent in Afghanistan. This is a contracting system that's gone haywire. There is now security development NGO complex in Washington that's as powerful as the old military industrial complex and this needs to be reformed."

At least on the military side, I believe that Mr. Ghani is referring to what DC insiders call the "Beltway Bandits," a nested set of contractors and subcontractors. The government grants aid to a country like Afghanistan, and the money is awarded to a contractor. But that contractor seems incapable of actually sending the aid to where it is needed. Instead it makes a deal with a subcontractor. And that subcontractor makes a deal with another subcontractor. Each layer takes its cut of profit. By the time you get down through 5 or 6 layers, then maybe a small fraction of what Congress approved actually ends up in Afghanistan. And of course all those layers in the US make generous campaign donations to key Congresspeople, to be sure their little gravy train continues to roll on.

So powerful Afghans see how we do it in the US of A and then they decide to take their cut as well--and we rant and rave about "corruption" and threaten to cut off all future aid if they don't behave. Doesn't the Bible say something about complaining about the mote in someone else's eye and ignoring the beam in one's own?

And what does this have to do with medicine and the drug industry, one might wonder. Health Care Renewal has a consistent theme about how corporate leaders in health care (not just in pharmaceuticals) never seem to be held accountable, and can rake off millions in salaries while the organizations they head are going to pot. They provide numerous examples of lack of accountability at the CEO level. Therefore a recent Huffington Post piece by reporter Ricardo Alonso-Zaldivar is right up their alley:

The post covers the renewed interest among Federal prosecutors to go beyond fining drug companies found guilty of fraud hundreds of millions of dollars, when in the past this seems never to have moderated their later behavior and the same fraudulent activity happens over and over. The Feds are starting to threaten criminal charges against the CEOs of these companies. The first target has been Howard Solomon of Forest Laboratories, who allegedly presided over behavior that led Forest to settle with the Feds for $313M. The company was said to have deliberately ignored an FDA warning about an unapproved thyroid drug, marketed an antidepressant approved only for adults for child use, and misled FDA inspectors doing a quality check at one of their plants. Solomon is now threatened with what the industry calls the "death penalty," banning Solomon permanently from doing business with the Federal government.

These threats to go after CEOs personally have gotten the attention of an industry that has traditionally treated hundred-million-dollar fines with a ho-hum. Forest is actively fighting Solomon's ban and corporate lawyers are threatening to fight the Feds in court and try to overturn the legal basis for these prosecutions.

To summarize: when people with the wrong color skin who wear the wrong sorts of clothes on the wrong side of the world try to take home some extra cash, it's corruption and we're all against it. When US CEOs use their power to take home multimillion-dollar paychecks even when running their firms into the ground and defrauding taxpayers, and their corporate boards (made up of similarly compensated bigshots) aid and abet this behavior and even justify it by claiming that the only way to get corporate "talent" is to pay big bucks for it, and all of the above pay off Congress, that, of course, is not corruption--it's the American way.


Deb Schultz said...

I don't think the division is between 'people with the wrong color skin' and those presumedly appropriately pigmented. This is a divide between the bosses and the proles, between the givers and the takers of 'aid'. It's about the 'balance of power' and not upsetting that applecart.

Look how the pharma people market themselves. They make your life livable! They spend gazillions on research just for you! Why, you wouldn't begrudge them a bit of recompense for their hard work, would you? The same thing for hospital CEOs and boards, only there, a bit of localism is generally at work, too. These are your people, taking care of your community. By golly, they deserve that big salary because they're supporting your family's and your community's health.

Of course, most people never stop to question the amounts of money being paid to hospital or pharmaceutical executives, in part because they have little power to do so. Yet, those in these positions can fund campaigns influencing political decisions that adversely affect the community of users. And one of the messages of those campaigns is that people need to be responsible for their health and expect to pay more for the great care they get.

The lesson is that one should never be an ungrateful victim of largesse, especially when the control of that largesse is someone else's source of significance.

Anonymous said...

Very good. You would make an excellent employee at Pravda or its Chinese equivalent where you can practice "what about-ism" with adroit skills. The difference between corruption in the developed and developing world is that here the legal system functions reasonably well enough to pursue at least some members of the corrupt society.

Thats why Randy 'the duke' Cunnigham is sitting in jail right. And thats why those 18 whistle blowers on big pharma are going to collect millions in federally mandated whistle blower bounty. The same people would be rotting in a ditch somewhere in the 'Stan.

Is this enough? No, of course not. Obviously corruption should be pursued with utmost urgency in the West to make sure that we slowly dont devolve into East, and as Italy shows us that devolution can be quite rapid in a highly corrupt and decadent polity. But to compare Russia and America is a joke, no matter how badly former Communists like yourself need the big evil boogyman to be the same guy everywhere.

Howard Brody said...

I am happy to have Anonymous disagree with anything or everything I said and offer an alternative point of view; that's what a blog is for. But I would be grateful for one small bit of enlightenment. Please tell me--just where in the original post did I compare the US and Russia?