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Corporate Influence Over Politics


Science just keeps inventing new tests and treatments that are more expensive ... Also, the Alabama Exxon was found guilty of royalty fraud and fined $3.6 billion. ... – PowerPoint PPT presentation

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Title: Corporate Influence Over Politics

Corporate Influence Over Politics
  • Peter Tran, Rayko Diaz, Jessica Toribio,
    Chang-Ting Yu, Keenan Hall

Healthcare From the 1960s 2000s
Healthcare 1960s
  • In the 1950s, the price of hospital care doubled.
    Now in the early 1960s, those outside the
    workplace, especially the elderly, have
    difficulty affording insurance.
  • Over 700 insurance companies selling health
  • Concern about a "doctor shortage" and the need
    for more "health manpower" leads to federal
    measures to expand education in the health
  • Major medical insurance endorses high-cost
  • President Lyndon Johnson signs Medicare and
    Medicaid into law.
  • "Compulsory Health Insurance" advocates are no
    longer optimistic'. 
  • The number of doctors reporting themselves as
    full-time specialists grows from 55 in 1960 to

Healthcare - 1970s
  • President Richard Nixon renames prepaid group
    health care plans as health maintenance
    organizations (HMOs), with legislation that
    provides federal endorsement, certification, and
    assistance.??Healthcare costs are escalating
    rapidly, partially due to unexpectedly high
    Medicare expenditures, rapid inflation in the
    economy, expansion of hospital expenses and
    profits, and changes in medical care including
    greater use of technology, medications, and
    conservative approaches to treatment. American
    medicine is now seen as in crisis.?

Healthcare 1980s
  • Corporations begin to integrate the hospital
    system (previously a decentralized structure),
    enter many other healthcare-related businesses,
    and consolidate control. Overall, there is a
    shift toward privatization and corporatization of
  • Under President Reagan, Medicare shifts to
    payment by diagnosis (DRG) instead of by
    treatment. Private plans quickly follow suit.
  • Growing complaints by insurance companies that
    the traditional fee-for-service method of payment
    to doctors is being exploited.
  • Capitation payments (payments made every month
    from users of HMO) to doctors become more common

Healthcare 1990s
  • Health care costs rise at double the rate of
  • Federal health care reform legislation fails
    again to pass in the U.S. Congress.??
  • By the end of the decade there are 44 million
    Americans, 16 of the nation, with no health
    insurance at all.

Healthcare 2000s
  • Health care costs are on the rise again.
  • Medicare is viewed by some as unsustainable under
    the present structure and must be "rescued".
  • Changing demographics of the workplace lead many
    to believe the employer-based system of insurance
    can't last.
  • Direct-to-consumer advertising for
    pharmaceuticals and medical devices is on the

Corporate Influence Over Healthcare
  • The average American in 2003 spent about 5,440
    on health care, making the total amount spent
    throughout the United States that year to 1.6
  • The United States spends 50 more per capita on
    health care on health care than any other
  • Considering this, it seems as though Americans
    would at least be the healthiest people on Earth.
    However, that is not the case.
  • In fact, the life expectancy of the United States
    is shorter than that of Western Europe, Canada,
    and Japan. Also, the infant mortality rate in the
    U.S. is higher than that of the same countries
    mentioned above.

Healthcare Crisis
  • The United States health care system is driven
    primarily by profit.     
  • What happens to be profitable for drug companies,
    hospitals, and insurance companies is not the
    most efficient at generating good health.
  • There are hundreds of insurance companies that
    have different forms and regulations. Therefore,
    the system is basically ineffective.
  • Defensive medicine is practiced by many
    physicians in the U.S. which means they perform
    tests and procedures in order to protect
    themselves from lawsuits.  
  • Lawsuits asserting malpractice on pharmaceutical
    companies, hospitals, and physicians account for
    about 4 percent of the total health care costs in
  • Science just keeps inventing new tests and
    treatments that are more expensive than former
    tests and treatments.
  • Prescription drugs are the most expensive portion
    of the health care bill (200 billion a year
    growing at a prate of around 12 percent each
  •       - It is important to keep in mind that in
    other countries, the same exact drugs are cheaper
    than in the U.S. (an average of about .57 for
    each 1.00 paid in the U.S.)

  • One major problem with health care in the United
    States is that it is measured on the basis of the
    ability to pay. Therefore, people in poverty who
    do not have enough money to even pay their bills
    have essentially no chance at receiving adequate
    health care. As you can see, this is a portion of
    evidence that we are living in a capitalistic
    society where the rich get richer and poor get
  • - About 45 million people in the United States
    are uninsured.
  • - It is obvious there is something wrong with
    our health care system when a child can die from
    a toothache because his family doesnt have the
    money to get him care. Yet, we live in the most
    powerful country in the world. These two facts
    do not add up.
  • - A common thought is that the poor are
    responsible for their bad health. For example,
    many people believe that their lack of education
    and knowledge leads to poor health practices. In
    reality, you do not have to have much knowledge
    to know that you need to exercise or that you are
    having stomach pains and you need to get to a

Corporate Take-over of Healthcare in the U.S.
  • In the past, hospitals in America have been
    nonprofit organizations run by universities,
    churches, and municipalities. The key word here
    is nonprofit. Ever since the mid 1960s, private
    profit-oriented hospitals and hospitals chains
    have appeared.
  •      - An example of how much power corporations
    now have over health care is Columbia Healthcare
    Corporation. This corporation is the worlds
    largest profit-oriented hospital chain. This
    corporation owns the following
  •      - 350 hospitals (in 1997- 10 of the
    nations hospitals)
  •      - 133 outpatient diagnostic and surgery
  •      - hundreds of nursing homes, home care
    units, blood centers, and psychiatric facilities.
  •      - In 1997 this corporation alone was worth
    20.2 billion, employed 285,000 people, and
    operated in 38 states.
  • The strategy of this corporation is to buy
    nonprofit hospitals, create quasi-monopolies,
    then hack basic services and increase the price
    of services in order to boost their profits.
  •       - The co-founder of Columbia Healthcare
    Corporation, Richard E. Rainwater, calls their
    strategy the Wal-Mart approach to health care.

More Strategies To Buy Hospitals
  • Avoid low-income areas by locating in states and
    neighborhoods with well-insured populations.
  • Build hospitals without emergency rooms, neonatal
    intensive units, or burn units because these
    facilities often lose money.
  • Special interest in minimizing their care for
    emergency patients because they attract Medicaid
    and charity cases
  • Federal law requires that hospitals care for all
    emergencies, including patients who have no
    insurance. Therefore, hospitals without emergency
    rooms or with insufficient emergency facilities
    can dump tens of thousands of patients a year on
    the doorsteps of public hospitals.
  • Purchase hospitals that are nonunion, allowing
    them to keep salaries and wages fairly low
  • Skimp the quality of supplies, the level of
    cleanliness, and the level of staffing.

Common Divisions between For-profit and
Not-for-profit health care organizations
  • The corporations are owned by investors
  • - The corporations are allowed to distribute
    some portion of the profit to the owners
  • - They pay property, sales, and income taxes
  • -  Sources of finances include
  •             - Equity capital from investors
  • -Debt
  • - Retained Earnings (depreciation deferred
  • - Return-on-equity payments from third party
    payers (ex. Medicare)
  • - Management is conclusively liable to
  • Purpose of the organization
  • - Obligated to boost the wealth of shareholders
    within the law
  • - They do this by providing services
  • Mission of the organization
  • - This is commonly stated in terms of growth,
    efficiency, and quality

Not For-Profit
  • The corporations are without owners or are owned
    by members.
  • These corporations cannot distribute surplus to
    the people who control the organizations.
  • They are almost always cleared from paying taxes
  • Sources of finances include
  • - Charitable contributions
  • - Debt
  • - Retained earnings (depreciation)
  • - Government grants
  • Management is liable to voluntary boards which
    are often perpetual.
  • Purpose of the organization
  • - Legal obligation to accomplish a stated
    mission (provide services, research, teaching,
  • - These corporations must continue and maintain
    economic viability in order to achieve this

  • There is a myriad amount of differences between
    the two, and the main difference is the purposes
    of these two corporations. For example, the
    purpose of the For-profit corporations is merely
    to help the rich get richer (to enhance the
    wealth of shareholders) thus, causing the poor
    to get poorer. On the other hand, the purpose of
    the Not-for-profit organizations is simply to
    provide services and research to the people who
    actually need it.
  • One advantage of the Not-for-profit organizations
    is the fact that they are usually cleared from
    paying taxes, whereas the For-profit corporations
    have to pay property, sales, and income taxes.
    However, a disadvantage of this type of
    corporation is that they cannot distribute
    surplus to those who control the organization.

Exxon Mobil
Rex Tillerson - CEO
  • Joined in 1975 as an engineer
  • In 1995, he became president of Exxon Yemen Inc
  • In 1998, he became a vice president of Exxon
    Ventures (CIS) and president of Exxon Neftegas
    limited with responsibility for Exxon's holdings
    in Russia and the Caspian Sea
  • In 1999, merger b/t Exxon and Mobil named
    Executive Vice Pres. Of ExxonMobil Development
  • In 2001, he became President of Exxon Mobil
  • 6th most powerful person in business Fortune
    ahead of Bill Gates
  • Tillerson is Chairman and a member of the
    Executive Committee and Policy Committee of the
    American Petroleum Institute
  • Member of Business Roundtable and its Energy Task
  • - BR is a prestigious group formed to promote
    pro-business public policy and made up only of
    chief executive officers of major U.S.
  • The Task Force
  • - Advocates for policies and activities across
    all sectors that will ease the energy crunch and
    grow the economy.
  • - Makes the case for greater investment in
    research and development of new energy sources
    and new energy efficiency technologies.
  • - Educates policymakers and the public on the
    importance of energy market solutions to maintain
    and stimulate economic growth.

Political Bankroll
  • Is an industry captain in both lobbying
    expenditures and campaign contributions
  • The oil and gas industry has donated a total of
    180 million since 1989 to political candidates.
  • Since 2000, ExxonMobil alone has been able to
    give more than 4 million to political
  • The oil industry certainly favors republicans in
    order to push its agenda on Capitol Hill.
  • In 2006, a total of 89 of ExxonMobils donations
    went to the republicans.
  • These great amount of campaign contributions are
  •       - A factor that influences how a dependable
    Exxon-backed Congress will choose to vote
  •       - A trend that establishes how campaign
    contributions are a key factor in who gets
    elected and who remains in office.

Lobbying Legacy
  • From 1998-2005 ExxonMobil spent about 67
    million on lobbyists
  • Out of all the companies and organizations that
    were lobbying in Washington D.C. in 2004,
    ExxonMobil was ranked the twelfth highest
    spender, spending 7.56 million.
  • In 2005, ExxonMobil spent 7.14 million compared
    to Shell who spent only 1.4 million on lobbying
    (giving an example of how much more Exxon spends
    compared to other gas and oil companies)

Political Spending
  • What does the oil and gas industry get in return
    for the millions of dollars that it spends on
    lobbyists and campaign contributions?
  • -The industry as a whole receives up to 113
    billion per year in direct federal subsidies.
  • - The 2005 Energy Bill is also a great example
    of how political money turns into legislation.
  •             - In effect until 2010, the Energy
    Bill authorizes 4 billion in federal subsidies
    to the oil and gas industry.

  • The Energy Bill gave Exxon 1.5 billion in oil
    subsidies for ultra-deepwater activities (which
    Exxon is the self-declared leader of claims it
    will be responsible for 20 or more of production
    of deepwater oil and gas by 2010).
  • Oil companies allegedly pay a royalty to the
    government for the authorization of extracting
    resources off public land owned by Americans.
  • Energy Bill gave billions of dollars worth of
    unnecessary royal relief for ExxonMobil and
    other oil and gas organizations.
  • At the same time, Exxon has already settled a
    number of lawsuits for 52 million for not paying
    or underpaying their royalties.
  • Also, the Alabama Exxon was found guilty of
    royalty fraud and fined 3.6 billion. (they have
    been appealing this conviction since 2000)
  • The Energy Bill also changed the rules so that
    the state has no right anymore to determine the
    location of Liquefied Natural Gas facilities.
  • Instead, the location assessments will be done by
    federal agencies, who are ironically more

Why It All Matters
  • America obviously needs an urgent separation of
    oil and state.
  • ExxonMobils policies seem to be acting like an
    anchor holding down America from achieving a
    safer and cleaner energy future.
  • Exxon is the only major oil giant that is arguing
    that renewable energy is wrong and bad
    investment, that global warming really isnt a
    threat at all, and that the U.S.  being energy
    independent is undesirable and impossible.
  • Exxon CEO Rex Tillerson says that renewable
    energy is uneconomic.

  • Global Warming Debate

  • The oil companies would rather not have Americans
    be concerned about the Global Warming crisis.
    Burning fossil fuels is the leading cause of
    greenhouse gas emissions, which lead to the
    warming of the Earth. It would simply be bad
    business for oil companies to admit that their
    products are putting humanity's survival at risk,
    so they spend billions of dollars trying to
    debunk global warming as "myth" and as a "hoax."
    Quite like the cigarette companies when they
    denied the harmful effects of smoking to the
    Supreme Court, oil companies like ExxonMobil are
    denying the tried and proven science behind
    global warming. If they admitted to fossil fuel
    and greenhouse gas global warming, they would
    lose more billions of dollars than they use to
    deny the facts in international restrictions and
    taxes.-ExxonMobil, the largest oil company in
    the world, pays thousands of environmental
    scientists and hundreds of think-tanks to try to
    disprove global warming
  • The National Center for Policy Analysis's
    "E-Team" analyzes environmental policy. The
    global warming "experts" on the team are climate
    skeptics who opposed the Kyoto Protocol and
    continue to oppose any regulation of greenhouse
    gases. Coincidentally, the NCPA has received at
    least 465,900 from Exxon since 1998, including
    75,000 per year for the past several years.
    Adjunct Scholar Deming of the NCPA says that
    "Global Warming has long since passed from
    scientific hypothesis to the realm of
    pseudo-scientific mumbo-jumbo."   

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  • The NCPA has joined forces with eleven
    "think-tanks", including the Heritage Foundation,
    the Cato Institute, and the Heartland Institute.
    The Heritage Foundation is one of the oldest and
    most influential conservative think tanks. The
    Heritage Foundation's purpose is to "formulate
    and promote conservative public policies based on
    the principles of free enterprise, limited
    government, individual freedom, traditional
    American values, and a strong national defense" 
    (from Heritage "About Us" website). Simply, if
    the U.S. were to go through a radical energy
    transition now, the Heritage Foundation would
    state that our economy would crumble and destroy
    the U.S and they would spend millions to make us
    believe them. Though probably they would be
    getting the money from ExxonMobil.
  • The Cato Institute, a libertarian think tank
    based in Washington DC, was founded by Edward
    Crane and Charles Koch, the billionaire co-owner
    of Koch Industries. The Cato Handbook for
    Congress states, "No known mechanism can stop
    global warming in the near term.  International
    agreements, such as the Kyoto Protocol to the
    United Nations Framework Convention on Climate
    Change, would have no detectable effect on
    average temperature within any reasonable policy
    time frame of 50 years or so, even with full
    compliance." This is unsurprising coming from
    co-founder Charles Koch because Koch Industries
    is the largest privately held oil company in the
  • The Heartland Institute has taken the campaign
    against the proponents who prove global warming
    exists.  The Heartland Institute competes
    single-mindedly against one of the most
    influential liberal forces in the field of global
    warming and conserving the environment, Al Gore .
    The Heartland Institute also filed a lawsuit
    against President Clinton when he expanded the
    scope of, and increasing funding for, a report on
    climate change by the US Global Change Research
    Program. The think tank also wrote to President
    Bush, discouraging him from attending the UN
    Summit on Sustainable Development.  Bush did not
    attend. In total, the Heartland Institute has
    received 791,500 from ExxonMobil alone. Not bad
    for a think tank that has only been working with
    the oil company for eleven years.

  • How the Healthcare and Oil Industries Relate

  • They are both driven solely on the aspiration of
    making more money for themselves and bringing in
    an increasing amount of profit each year.
  • They are both extremely powerful organizations
    now due to their large sums of profit, making it
    hard to take any power away from them or persuade
    them that change is needed.
  • Neither of them seems to care about the negative
    impact that they are having on the citizens of
    the United States.
  • - For example, the strategy of the for-profit
    health care organizations is to buy nonprofit
    hospitals, create quasi-monopolies, then hack
    basic services and increase the price of services
    in order to boost their profits. This increase in
    the price of services makes it much harder for
    citizens to pay for adequate health insurance,
    and causes many people to be unable to get any
    services at all.
  • - Other strategies include (1) avoiding
    low-income areas by locating in states and
    neighborhoods with well-insured populations, (2)
    build hospitals without emergency rooms, neonatal
    intensive units, or burn units because these
    facilities often lose money, and worst of all (3)
    to skimp the quality of supplies, the level of
    cleanliness, and the level of staffing.