Telling the Real Story


Yesterday, the Washington Times reported that various pharmaceutical companies and trade groups have contributed $172,500 to the Utah Families Foundation, a nonprofit closely connected to Sen. Orrin Hatch. The Times article notes that the contributions to the Utah Families Foundation “provides fresh evidence that the campaign-finance limits and transparency reforms that President Obama demanded and that Congress enacted still leave avenues for interests to route large sums of money to lawmakers’ favorite causes without disclosure.” While there are certainly still loopholes in the ethics and transparency reforms the example presented by the Times appears to not only be false, but to invert the actual effect of the transparency reforms.

Let’s look at the whole story. The Times states that the information about the contributions to the Utah Families Foundation came from a “normally confidential” IRS disclosure form was accidentally released. That form covered the year 2007, the year that the ethics reforms the Times mentions were enacted, but before they were put into operation. Contributions to nonprofits connected to members of Congress were only required to be disclosed in 2008 and in no years prior. It would have done the Times well to have looked at the legislative history of the reforms they were mentioning. Also, simply by delving into the lobbying contribution databases operated by the Clerk of the House and the Secretary of the Senate we can see that contributions, labeled Honorary or Meeting Expenses, to the Utah Families Foundation for 2008 were disclosed.

In 2008, four pharmaceutical companies contributed a total of $47,500 to the Utah Families Foundation, labeling these contributions as Honorary Expenses for Sen. Orrin Hatch. These companies include Cephalon, Abbot Laboratories, Johnson & Johnson, and Baxter Healthcare Corporation. Also making reporting Honorary or Meeting Expenses were Pfizer and PhRMA, the lobbying arm of the industry. PhRMA spent $75,000 on Honorary and Meeting Expenses for Sen. Hatch, while Pfizer spent only $10,000.

While the Washington Times does help to illuminate the connections between the pharmaceutical industry and a powerful senator, their assertion that the lack of disclosure surrounding the Utah Families Foundation in 2007 is a failure of transparency reforms enacted in 2007 is not based in reality. In fact, if we believe that the laws are followed and companies disclosures are accurate than there is a very different story to be told here.

A comparison of the contributions made to the Utah Families Foundation in 2007 and 2008 clearly show that the pharmaceutical industry has greatly reduced their contributions since the transparency reforms were enacted. The contributions to the Utah Families Foundation have gone down from $172,500 to $47,500. Perhaps the fear of disclosure led these companies to reduce their pursuit of alternate avenues of influence. After all, sunlight is the best disinfectant.