TRUMP’S FOREIGN CONFLICTS OF INTEREST

Former president Trump’s criminal and civil court cases have been getting a lot of attention lately. Lost in all of this activity – and to-date unprosecuted – are his substantial conflicts of interest while president based on his foreign businesses and his interactions with foreign government officials and business people. Given the strong evidence that his decisions and actions as President were influenced by these relationships, these conflicts of interest are likely violations of the Constitution, as well as ethics and bribery laws.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. Thanks for reading my blog! Special Note: The new, more user-friendly website for my blog is here. Click on the Subscribe Today button to receive notification of new posts.)

The Foreign Emoluments Clause in Article 1 of the Constitution states that “[N]o Person holding any Office of … [the United States], shall … accept … any present, Emolument [i.e., benefit], … of any kind whatever, from any … foreign State.” President Trump probably violated this provision of the Constitution in three different ways. First, he failed to disclose gifts worth more than $250,000 that he received from foreign governments or officials. (U.S. House Committee on Oversight and Accountability, 3/17/23, “Oversight Democrats release evidence showing Trump first family failed to disclose and account for more than $250,000 worth of foreign government gifts”)

Second, four of his U.S. businesses received at least $7.8 million from foreign entities in 20 countries in his first two years in office. This total is from only four of Trump’s over 500 businesses and is in a report from a congressional investigation based on records from the Trump organization’s accounting firm. The investigation was ended by Republicans when they took control of the House in 2022 and they told the accounting firm it did not need to provide documents it had been ordered to provide by a court. The bulk of this money, $5.6 million, came from China and most of it from a Chinese bank that leased space in the Trump Tower in New York. The other countries topping the list are Saudi Arabia ($615,000), Qatar ($466,000), Kuwait, ($303,000), India ($283,000), and Malaysia ($249,000). (Konig, J., Semyon, C., & Diamante, R., 1/4/24, “Trump collected millions from China, other foreign governments as president, House Democratic report says,” Spectrum News; Beitsch, R., 1/4/24, “Trump businesses took in nearly $8 million from foreign governments: House Democrats,” The Hill)

These countries, and indeed all countries, have significant interests in U.S. foreign policy decisions. Therefore, this revenue to the Trump Organization created conflicts of interest for President Trump. For example, Trump was making decisions that significantly affected trade with China, including the imposition of tariffs. The Trump administration was also deciding on a $100 billion arms deal with Saudi Arabia, as well as deciding how to respond to the murder of American journalist Jamal Khashoggi by the Saudi government.

Third, data from the first two years of Trump’s presidency show that he was making substantial sums of money from his foreign properties and interests, while also continuing to pursue new ventures despite a promise not to do so. Trump had properties and licensing arrangements in at least 30 countries including China, Qatar, Russia, Saudia Arabia, Turkey, and the United Arab Emirates. His foreign assets were worth at least $130 million. In many cases, it appears foreign business and political leaders were making efforts to gain influence with Trump.(Massoglia, A., & Evers-Hillstrom, K., 6/4/19, “World of influence: A guide to Trump’s foreign business interests,” Open Secrets)

Based on an analysis of Trump’s tax returns, he made as much as $160 million from foreign business activities while president. Although it is probably impossible to know with certainty, there’s plenty of evidence to suggest that Trump’s actions as president were influenced by his financial interests. For example, his decision to abruptly end U.S. support for the Kurdish people on the Turkey-Syria border was highly appreciated by Turkey’s political leaders. Trump’s actions supporting the Chinese company ZTE after it had been sanctioned for allowing its products to be used to spy on Americans was shocking to many, including Republicans and the intelligence services. Meanwhile, Trump’s tax returns showed more than $7.5 million in income from China. In Argentina, Trump delayed enacting tariffs until after trademarks for his company had been approved. Trump pushed the British government to hold the British Open golf tournament at one of his Scottish golf courses. And the list of foreign conflicts of interest goes on and on. (Jacobs, R., & Maguire, R., 4/13/23, “Trump made up to $160 million from foreign countries as president,” Citizens for Responsibility and Ethics in Washington)

Trump will probably never be prosecuted for these conflicts of interest (although several groups have filed related lawsuits) but their effects on U.S. domestic and foreign policies, as well as actions taken and not taken by the federal government, were very significant and should not be forgotten. With this context, the hypocrisy of congressional Republicans’ “investigation” of Hunter Biden’s business activities is mind boggling. This hypocrisy is underscored by the lack of investigation of Trump’s son-in-law, Jared Kushner, and the $2 billion investment his new asset management firm received from the Saudis shortly after he left his White House role overseeing Mideast policy.

U.S. DRUG PRICES ARE A RIP-OFF Part 2

U.S. drug prices are 1 ½ to 3 times higher than they are in other well-off countries. Here are five steps our federal government should take to stop the ubiquitous anti-competitive strategies used by the pharmaceutical industry to jack up drug prices and profits. Inflated drug prices have dramatic, negative effects on people’s health and financial well-being.

This is the ninth post in a series on how the U.S. health care system is a profit-driven system. The first post presented an overview of the system. The second and third ones focused on the role of the extreme capitalism of private equity firms. The fourth and fifth posts described large-scale vertical integration and the related problems and illegal behavior. The sixth post describes egregious illegal and unethical behavior that is all too common among nursing home operators. The seventh post highlighted how doctors are pushing back against health care for profits rather than for patients. The eighth post presented an overview of how anti-competitive and often illegal practices by drug companies are jacking up drug prices in the U.S.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. They present the key points I’m making. Thanks for reading my blog! Special Note: The new, more user-friendly website for my blog is here. Click on the Subscribe Today button to receive notification of new posts.)

My previous post presented an overview of the anti-competitive and often illegal practices used by drug companies that result in U.S. drug prices being 1 ½ to 3 times higher than they are in other well-off countries. Importation of drugs from Canada could save consumers and governments hundreds of millions of dollars every year. Here are some specific examples of drug company rip-offs and some policies that could address the problem of exorbitant drug prices.

A classic example of the abuses of patents and monopolistic power is the EpiPen. The EpiPen injects a pre-loaded dose of epinephrine (which counteracts a potentially fatal allergic reaction) with the push of a button. Both this auto-injector technology and the drug are over 50 years old. However, Viatris Inc. (formerly Mylan) has maintained a patent-driven monopoly on the EpiPen and typically charges over $600 for one, although the cost to produce it is just a few dollars. It regularly files for new patents based on minor changes that allow it to block generics from the market. [1]

In 2022, Viatris paid $264 million to settle an antitrust lawsuit for illegally blocking generic competition for the EpiPen – a small penalty given Viatris’s $2 billion in profits in 2022. (I’ve previously written about high drug prices, including the EpiPen, in 2022 and 2016.)

Another abuse of the patent system is the filing of multiple patents on a particular drug. An investigation by the Initiative for Medicines, Access, and Knowledge (I-MAK) found that for the ten most frequently sold drugs in the U.S. companies had obtained an average of 74 patents on each of them! [2] Furthermore, there were an average 140 patent applications on each of these ten drugs and two-thirds of them were submitted after the drug was approved for sale by the FDA. One study found that 78% of drug patents are NOT for new drugs. [3]

Numerous patents on a drug are referred to as a “patent thicket” and its goal is to put a huge roadblock in front of any potential competitor even after the original patent expires. Cutting through this patent thicket to establish the legal right to market a generic version of the drug is likely to take years and to cost millions of dollars in legal fees.

Humira, an arthritis drug made by AbbVie Inc., is an example. AbbVie filed for 312 patents on the drug; 293 of them after it had gotten FDA approval! Of those, 166 were granted and extended the patent-based monopoly on the drug for seven years, from 2016 to 2023. About two-thirds of the money AbbVie got for selling Humira, or about $100 billion, came in the seven-year extension period. For sake of comparison, AbbVie got 6.4 times as many patents on Humira in the U.S. as it did in the European Union, where its 26 patents expired in 2018.

A report from the American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge (I-MAK) identified ten illegal, anti-competitive strategies used by the pharmaceutical industry to inflate drug prices (see this previous post for details) and also identified policy fixes, including: [4]

Prohibiting payments to potential competitors to NOT produce generic alternatives.
Tightening the U.S. patent office’s procedures and standards in order to eliminate fraud and abuse. Patents shouldn’t be issued for new products that are minor tweaks of existing products, as they are used simply to extend the life of the original patent and prevent generic alternatives from entering the market. Filings that simply delay the approval of generics should be prohibited or ignored. The patent office also needs more staff, resources, and medical expertise to deal with the barrage of patent applications from the pharmaceutical industry.
Streamlining the FDA’s approval of generics, including ignoring attempts by makers of patented drugs to slow or block approvals.
Strengthening antitrust enforcement, in part by increasing funding and personnel. For sake of comparison, the FDA has 14,000 employees to review and approve drugs, while antitrust enforcement has only a few dozen working on pharmaceutical industry cases.
Increasing penalties on violators. Clearly, current penalties have been insufficient to deter persistent and repetitive illegal behavior. Both companies and corporate executives need to be more harshly punished. Delaying generic competition and other illegal behaviors are very profitable, therefore significant penalties need to be levied to discourage them.

I urge you to contact President Biden and your U.S. Representative and Senators to ask them to take strong action to stop anti-competitive practices in the pharmaceutical industry and to rein in drug prices. You can email President Biden at http://www.whitehouse.gov/contact/submit-questions-and-comments or you can call the White House comment line at 202-456-1111 or the switchboard at 202-456-1414. You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1] Kuttner, R., 8/7/23, “Eminent domain for overpriced drugs,” The American Prospect blog (https://prospect.org/blogs-and-newsletters/tap/2023-08-07-eminent-domain-overpriced-drugs/)

[2] Initiative for Medicines, Access, and Knowledge, Sept. 2023, “Overpatented, overpriced,” (https://www.i-mak.org/wp-content/uploads/2022/09/Overpatented-Overpriced-2022-FINAL.pdf)

[3] Cooper, R., 6/6/23, “How Big Pharma rigged the patent system,” The American Prospect (https://prospect.org/health/2023-06-06-how-big-pharma-rigged-patent-system/)

[4] American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge, May 2023, “The costs of pharma cheating,” (https://www.economicliberties.us/wp-content/uploads/2023/05/AELP_052023_PharmaCheats_Report_FINAL.pdf)

U.S. DRUG PRICES ARE A RIP-OFF

U.S. drug prices have long been a classic example of the corporate, profit maximization mentality that puts profits before people. The lack of regulation and antitrust enforcement in the face of ubiquitous anti-competitive strategies by the pharmaceutical industry have allowed this rip-off to go on for far too long with horrible effects on people’s health and financial well-being.

This is the eighth post in a series on how the U.S. health care system is a profit-driven system. The first post presented an overview of the for-profit U.S. health care system. The second and third ones focused on the role of the extreme capitalism of private equity firms. The fourth and fifth posts described large-scale vertical integration and the problems and illegal behavior that have occurred with it. The sixth post describes an example of the egregious illegal and unethical behavior that is all too common among nursing home operators. The seventh post highlighted how doctors are pushing back against health care for profits rather than for patients.

Drug prices are far higher in the U.S. than in other well-off countries. Per person drug spending in the U.S. is over three times what it is in the Netherlands, Norway, and Sweden; it’s one and a half times what it is in Switzerland, the next highest among the nine high-income countries in this study. [1] This is largely due to higher prices and not other factors.

A recent and rather dramatic example of how high drug prices are in the U.S. is that the U.S. Food and Drug Administration (FDA) just allowed Florida to buy drugs in bulk from Canada for its public health programs including Medicaid and incarcerated people’s health care. It is estimated that this will save Florida $150 million a year! Eight other states have laws allowing state drug importation and have asked, or plan to ask, the FDA for approval for similar bulk purchasing plans. There is broad (80% in some polls) and bipartisan support for drug importation from Canada to reduce drug costs. [2]

Congress passed a law allowing drug importation 20 years ago but the federal government has delayed its implementation, supposedly because of safety concerns. However, in many cases, the drugs are from the same manufacturer, just sold through a Canadian distributor.

The pharmaceutical industry, through its lobbying organization, the Pharmaceutical Research and Manufacturers of America (PhRMA), has fiercely opposed drug importation and has sued multiple times to block bulk drug importation plans. It is expected to file a lawsuit to block, or at least delay, Florida’s program.

Some drug manufacturers have agreements with Canadian distributors that prevent the distributors from exporting their drugs to the U.S. The Canadian government has taken steps to block the exportation of drugs that are in short supply, as the U.S. market is, of course, much bigger than the Canadian market.

It is estimated that the pharmaceutical industry’s aggressive and sometimes illegal efforts to keep drug prices high and block competition cost U.S. consumers, insurers, and government health programs (i.e., taxpayers) at least $40 billion every year. [3] As a result, one of out every four Americans can’t afford their prescribed medications. [4]

A study by the American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge (I-MAK) identified ten illegal, anti-competitive strategies used by the pharmaceutical industry to inflate drug prices. Its examination of the 100 most-used drugs in Medicare and Medicaid in 2019 estimated that the programs’ costs for them were inflated by $15 billion (14%) and $3 billion (9%), respectively. These two public programs are responsible for 45% of drug expenditures in the U.S. Other drug purchasers paid $22 billion more for these drugs due to the illegal, anti-competitive practices of the pharmaceutical industry. For example, it was estimated that Medicare and Medicaid would have paid 50% less for insulin in the absence of illegal practices by the four major insulin manufacturers. [5]

The anti-competitive practices of the pharmaceutical industry include:

Paying potential competitors not to sell generic alternatives to drugs,
Patent fraud and abuse including false statements to the patent office and sham patent lawsuits,
Fraudulent tactics to delay approval of a competing drug, often a generic alternative,
Collusion among competitors to increase prices,
Mergers, acquisitions, and monopolistic behavior, and
Rebates to drug insurance plans to steer consumers to brand name drugs and away from cheaper generic drugs. (These rebates are indistinguishable from bribes or kickbacks.)

My next post will highlight some specific examples of these anti-competitive practices and will present some policy changes that would reduce these abuses.

[1] Sarnak, D. O., Squires, D., Kuzmak, G., & Bishop, S., Oct. 2017, “Paying for prescription drugs around the world: Why is the U.S. and outlier?” The Commonwealth Fund (https://www.commonwealthfund.org/sites/default/files/documents/___media_files_publications_issue_brief_2017_oct_sarnak_paying_for_rx_ib_v2.pdf)

[2] Jewett, C., & Stolberg, S. G., 1/6/24, “FDA issues first approval for mass drug imports to states from Canada,” The Boston Globe from The New York Times

[3] Johnson, J., 5/16/23, “Big Pharma’s ‘rampant corporate lawlessness’ cost Americans $40 billion in 2019: Report,” Common Dreams (https://www.commondreams.org/news/big-pharma-corporate-lawlessness)

[5] American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge, May 2023, see above

BANKRUPTCY LAWS: HOW THE RICH STAY RICH AND THE REST OF US SUFFER

In the latest example of the use of bankruptcy laws by the rich to stay rich while others suffer, Rudy Giuliani just filed for bankruptcy after our justice system ordered him to pay Georgia election workers Ruby Freeman and Shaye Moss $148 million for defaming them. His public defamation of them led other Trump supporters to harass and threaten them and their family members, forcing them out of their homes and to live in fear of being assaulted.

(Note: If you find my posts too long to read on occasion, please just skim the bolded portions. They present the key points I’m making. Thanks for reading my blog!)

By filing for bankruptcy, Giuliani protects himself from having to pay Freeman and Moss for now. It may well be years before they get any money from him under the court’s order and it’s likely they’ll get far less than $148 million.

As you probably know, Trump companies filed for bankruptcy on multiple occasions, which allowed him to keep his wealth while others, including small business contractors and employees, got nothing or much less than his companies owed them.

Meanwhile, over the last forty years, Congress has passed laws making it harder for average people to declare bankruptcy and get relief from debts, while they’ve made it easier for large corporations, including Wall Street financial firms and banks, to do so. [1]

For example, homeowners can’t be relieved of mortgage loans on their primary residence by declaring bankruptcy. This protects banks and financial institutions while hurting homeowners. During the 2008 financial crash, 5 million homeowners lost their homes because they couldn’t get protection from bankruptcy laws. Meanwhile, Congress and other federal agencies provided hundreds of billions of dollars to large banks and financial institutions to keep them from going bankrupt.

People with student loans also can’t be relieved of them by declaring bankruptcy. Student loans are now 10% of all debt in the U.S., more than credit card and auto loan debt. (Only mortgages are a higher portion of debt.) The law allows student loan lenders take money directly from debtors’ paychecks, including Social Security checks if people collecting Social Security still have outstanding student loans! The only way to escape student debt is to prove that repayment would impose “undue hardship,” a more difficult standard to meet than is required of gamblers trying to escape their gambling debts!

Furthermore, filing for bankruptcy costs money. Typically, it costs at least $50 to file for bankruptcy in court and potentially hundreds of dollars for other fees. The cost of a lawyer can, of course, be substantial, and because attorney’s fees, like many other debts, are wiped out in a bankruptcy, most bankruptcy lawyers require cash up-front. This all means that many people who would benefit from filing for bankruptcy can’t afford to do so.

Bankruptcy laws are a perfect example of the fact that there’s no such thing as a “free market.” The market, i.e., the operation of our economy, is determined by the laws that are enacted by legislatures, Governors, and Presidents, as well as how they are implemented by the courts.

The laws that determine how the economy and markets function reveal whose interests our policy makers are protecting and making the priority. The current bankruptcy laws make it clear that wealthy individuals and businesses are the priority for our policy makers; they are being protected while the rest of us suffer.

Senator Elizabeth Warren (D-MA) and others have introduced the Consumer Bankruptcy Reform Act in Congress (S.4980). It would simplify and streamline the personal bankruptcy process as well as reduce filing fees. It would help individuals and families facing a financial crisis, who are disproportionately women and people of color, get back on their feet. It would allow student loans to be forgiven in bankruptcy and it would help those in bankruptcy avoid eviction, keep their homes and cars, and discharge local government fines. The law would protect people in the bankruptcy process by prohibiting and punishing illegal behavior by debt collectors and others. It would also close loopholes that let the wealthy exploit the bankruptcy system. The bottom line is that the bill would improve fairness and equity in our financial system, while strengthening a key piece of the social safety net. [2]

I urge you to contact your U.S. Representative and Senators to ask them to support the Consumer Bankruptcy Reform Act (S.4980). You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[1] Reich, R., 12/28/23, “Why can only the rich and powerful go bankrupt?” (https://robertreich.substack.com/p/who-gets-to-use-bankruptcy)

[2] Warren, Senator E., 9/28/22, “Senator Warren and Representative Nadler reintroduce the Consumer Bankruptcy Reform Act,” (https://www.warren.senate.gov/newsroom/press-releases/senator-warren-and-representative-nadler-reintroduce-the-consumer-bankruptcy-reform-act)