Columns » Ernest Dumas

Flooding the swamp



It became clear the first week of his presidency what Donald Trump meant with his repeated campaign pledges to "drain the swamp," the moneyed culture of Wall Street and corporate lobbyists who dictate the laws and rules of governing in Washington.

President Trump would simply divert the swamp from Capitol Hill over to the White House and all the reaches of the executive branch. What remained to be seen were the specific sluices that would pipe the fetid influence of corporate money to the far ends of his government. The last two weeks have been particularly revealing.

First, former South Carolina Congressman Mick Mulvaney, the Trump budget director who doubles as head of the Consumer Financial [Non]Protection Bureau, made a speech to the American Bankers Association in which he explained how "pay to play" worked in the new regime. When he was a congressman, he said, "If you're a lobbyist who never gave us money, I didn't talk to you." Payday lenders gave him $63,000. Now they have the protection of the consumer bureau he runs. Big financial institutions expect the same cover. Mulvaney and predatory lenders, big and small, need congressional help in rolling back some of the Obama-era consumer protections and he explained to the bankers how it is done.

Then, last week, the lawyer for porn actress Stormy Daniels released a few bank records of Trump's personal lawyer Michael Cohen, who had paid the sex star $130,000 right before the election to keep her one-day hookup with Trump in 2006 a secret. The bank records showed that Cohen set up shell companies to take corporate gifts to buy influence with the new White House. In a few months, he hauled in at least $2.35 million — $150,000 from a Korean defense company competing for a U.S. military contract; $500,000 from the powerhouse corporate lobbying firm Squire Patton Boggs; $500,000 from Columbus Nova, an investment shell that manages the assets of the Russian billionaire and Vladimir Putin pal Viktor Vekselberg; $200,000 from AT&T as it sought government approval of a merger; and more that we may learn about later from prosecutors. AT&T's CEO said the company regretted its payment, perhaps because the White House couldn't deliver the message to the Justice Department with sufficient vigor.

Novartis, the global pharmaceutical company, sent $1.2 million to Essential Consultants, the shell company Cohen set up to buy the porn star's silence. Novartis explained that its money had nothing to do with bribing Stormy but paid Cohen for "insight" into Trump's health care policies, including pharmaceuticals.

Last week, Novartis and the rest of Big Pharma found out and they were thrilled. For two years, the big drug makers had been on pins and needles. Campaigner Trump promised he was going after them because of the high prices people had to pay for drugs, especially those with new life-saving patents. He was going to do what President Bush and Congress had failed to do in 2003 when they expanded Medicare to cover drugs and what Barack Obama had failed to do with Obamacare. Concluding that he could not pass health insurance reform over Big Pharma's opposition, Obama did not include provisions for Medicare and perhaps Medicaid to use their bargaining power to get heavily used drugs for patients at big discounts. Nor did the law allow Americans to buy their drugs from Europe, which sold the drugs, including those made in America, at prices far below what Americans had to pay.

The drugmakers need not have worried. Trump's first Cabinet chief over Medicare and other health services had been a congressional servant of the industry, but Trump had to let him go for his lavish personal spending, which offended even Congress. Trump replaced him with Alex Agar, a pharmaceutical executive.

After days of buildup, the president got big headlines by announcing plans to drive down drug prices. But the vague plans included none of the reforms he had been championing for two years. Medicare and Medicaid still will not be able use their market power to get discounts from drugmakers. Rather than allow people to buy their prescriptions from European suppliers, he is going to look for ways to force Europe to pay drug makers more, driving up drug costs for European patients while foreclosing any incentive for Americans to buy from Europe. Pharmaceutical stocks, which had been depressed awaiting Trump's crackdown on Medicare marketing, soared.

Thanks to the swamp, Americans will continue to pay far more for prescription drugs than people anywhere in the world.

Meantime, all the other Trump-built sluices to drain the swamp — at Treasury, the Federal Trade Commission, the Federal Communications Commission, the Labor and Education Departments — are in working order. Over at the Environmental Protection Agency, Scott Pruitt, who has filled the agency with lobbyists and executives of polluting industries that he regulates, is still dining secretly with industry people and taking favors, traveling with his 16-man security detail and neutering public-health standards that the industries are supposed to meet.

Who said draining the swamp would be hard?

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