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Pulling Strings from Afar
Drug Industry Finances Nonprofit Groups That Claim to Speak for Older Americans

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February 2003

United Seniors Association, based in Fairfax, Va., calls itself an "influential and effective" advocacy organization for older Americans.

The Seniors Coalition, based in Springfield, Va., describes itself as an "advocacy organization that represents the interests and concerns of America's senior citizens."

The 60 Plus Association, based in Arlington, Va., describes itself as "an advocacy group with a free enterprise, less government, less taxes approach to seniors issues."

As recently as 2001, none of the organizations listed any revenue from membership dues on their tax returns.

If you're like millions of other older Americans, you've seen their names many times before—either on fundraising appeals or on television spots promoting political candidates. (One of the groups spent more than $10 million last year on politician-promoting ads featuring Art Linkletter, the folksy television personality.) More than ever before, they've been trying to influence political campaigns and shape policies that affect older Americans.

But who's really behind these organizations? And are they really working to help older Americans?

COMMON DENOMINATORS
Aside from the similar descriptions and locations in the Virginia suburbs of the nation's capital, the three nonprofit organizations have several things in common.

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Following the Money
Three nonprofit organizations that claim to speak for older Americans are in fact heavily bankrolled by the pharmaceutical industry, an examination of tax records by the AARP Bulletin shows. United Seniors Association, for example, got more than a third of its funds in 2001 from drug-industry sources. The big donors included Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's trade association; Citizens for Better Medicare, a PhRMA-funded nonprofit group; and Pfizer Inc. Total industry contributions: at least $3.1 million.

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For starters, all three organizations claim to be nonpartisan, though they support—almost without exception—the campaigns and causes of one political party.

All three organizations were formed by, or with help from, direct mail entrepreneur Richard Viguerie, and two have been operated in recent years by former officers or employees of Viguerie's companies.

All three organizations have been criticized over the years for questionable fundraising practices, and, recently, the Social Security Administration ordered one of them to halt what it determined to be misleading mailings.

All three organizations claim to speak for millions of older Americans, although as recently as 2001 none of the three listed any revenue from membership dues on their tax returns. Moreover, an investigation by the AARP Bulletin shows that virtually all of their largest contributions in recent years have come from the same source—the nation's pharmaceutical industry.

DRUG-INDUSTRY TENTACLES
Perhaps it isn't surprising that the three organizations have so willingly done the pharmaceutical industry's bidding.

"I think of the pharmaceutical industry as being like an octopus, with a deep reach no other industry can match," says Frank Clemente, the director of Public Citizen's Congress Watch, a Washington-based consumer organization. "This is an industry that's not only spending more on direct lobbying than any other industry but also spending more on front groups and related entities than any other industry."

Kenneth Goldstein, a political scientist at the University of Wisconsin who oversees the Wisconsin Advertising Project, says the drug industry has also emerged as unquestionably "the top-spending industry" in terms of political advertising.

Indeed, the industry invested more than $30 million in the 2002 elections, with more than a third of that bankrolling television ads bearing the name of United Seniors Association. The United Seniors ads promoted candidates in five Senate and 20 House races around the nation, including one in Pennsylvania that pitted two incumbents—Democrat Tim Holden and Republican George Gekas—against each other in a redrawn House district.

Holden says that the pharmaceutical industry spent more than $1 million trying to defeat him because he supports a prescription drug plan administered by Medicare; Gekas favored a plan backed by the pharmaceutical industry. (Gekas could not be reached for comment.)

"It was unconscionable that the pharmaceutical industry would mislead people by hiding behind a name such as United Seniors," Holden told the Bulletin. "They misled the voters of the 17th District. They have such deep pockets that they can go in and influence people who are busy with their everyday lives and don't have time to figure out that a group called United Seniors is actually the pharmaceutical industry."

Clemente told the Bulletin that Public Citizen's Congress Watch will ask the Internal Revenue Service to investigate whether United Seniors has violated its nonprofit tax status by engaging in "electioneering activity."

WEALTH AND STEALTH
When the pharmaceutical industry speaks these days, many Americans may not be able to recognize its voice. That's because the industry often uses "front groups" that work to advance its agenda under the veil of other interests.

Michael Pfau, a professor at the University of Oklahoma who has studied "stealth" political advertising, says his research indicates that "most people miss sponsorship completely" and attribute ads run by organizations like United Seniors to the candidates themselves. "Some of these organizations today," Pfau says, "are what we would call, in public relations language, front groups."

Consider, for example, the case of Citizens for Better Medicare (CBM). The Washington-based nonprofit sprang to life in 1999 as the sponsor of a series of ads featuring "Flo," an arthritic bowler who urged viewers to help "keep the government out of our medicine cabinets." At its peak CBM was spending more than $1 million a week on ads at least partly designed to influence the 2000 elections.

Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry's chief trade association, bankrolled the $60 million-plus advertising blitz and installed a former employee, Timothy C. Ryan, as CBM's executive director. The organization was the linchpin of the industry's drive to stave off a government-operated prescription plan for older Americans.

In documents filed with the Internal Revenue Service in 2000, Ryan estimated that CBM would raise and spend more than $60 million through July 2003. But the Bulletin has learned the pharmaceutical industry quietly pulled the plug on CBM last year, just as PhRMA started channeling what it called "unrestricted educational grants" to United Seniors Association.

(Bruce Lott, a spokesman for PhRMA, says that CBM is "largely inactive." CBM executive director Nona Wegner, who's a former official of the Seniors Coalition, did not respond to requests for an interview.)

At about the same time, the pharmaceutical industry began using the 60 Plus Association as a screen for its efforts to defeat prescription drug legislation at the state level.

Among other things, it hired Bonner & Associates, a Washington-based firm that specializes in "Astroturf lobbying"—so named because it's the "artificial" version of grassroots lobbying—to fight such legislation in Minnesota and New Mexico. The firm's paid callers, reading from scripts that identified them as representatives of 60 Plus, urged residents to ask their governors to veto the legislation. Pharmaceutical giant Pfizer Inc. later said it had paid Bonner & Associates to make the calls.

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