The Jere Beasley Report Sep. 2004

H e l p i n g t h o s e w h o n e e d i t m o s t f o r o v e r t w e n t y - f i v e y e a r s

THE

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B e a s l e y , A l l e n , C r o w , M e t h v i n , P o r t i s & M i l e s , P . C . , A t t o r n e y s a t L a w

SEPTEMBER 2004

A NATIONAL LAW FIRM LOCATED IN MONTGOMERY,ALABAMA

I.CAPITOLOBSERVATIONS

A SLOW SUMMER

There hasnt been much activityaround either the Alabama StateCapitol or the Statehouse during thehot summer months. I suppose thatsmainly because the Legislature hasntbeen in session. Some may believe thatis a good thing. Because there is stilltalk of a special session, however, thelevel of activity will likely increasegreatly. A session could be called verysoon according to several sources. Infact, the expected session could havebeen called by the Governor by thetime this issue is received. If so, I justhope that the preliminary planning andrelated work required has been doneand agreements made that are neces-sary for a special session to be produc-tive. Otherwise, a special sessionwould be a mistake. In any event onething is certain and that is GovernorRiley shouldnt call a session thatwould be bound to fail. In that regard,I dont believe he will. If a session iscalled it will be a pretty good indica-tion that some basic agreements werereached by the competing interests.

GOOD STATE EMPLOYEES ARE NEEDED

I get the impression that the dedica-tion of the overwhelming majority ofstate employees is sometimes taken forgranted by most Alabamians. Unfortu-nately, the perception among somefolks around the state is that stateemployees as a whole dont work veryhard and are overpaid. Nothing couldbe further from the truth. As in most allbusiness operations, there will alwaysbe a few employees who dontperform in an efficient manner. Isuspect that has been true in state gov-ernment over the years. However, theoverwhelming majority of stateemployees are dedicated to their joband are hard workers. Nevertheless,state employees have always been thetarget of criticism by some politicians,

and I believe that is most unfortunate.The demands on state government areenormous, and because of the currentfiscal problems, things have gottenextremely tough for persons employedby the state. Personally, I appreciatethe efforts by our state employees andwould like to see them get the creditthey are due.

A GOOD MOVE BY THE GOVERNOR

I was glad to see Governor Rileyappoint The Black Belt Action Commis-sion. In my opinion, that was a goodmove. Senator Hank Sanders and StateTreasurer Kay Ivey will co-chair thecommission. I understand that the firstmeeting was held on August 24th. TheCommission will look at manufactur-ing, health care, education, skills train-ing and infrastructure needs for the 13counties making up the Black Belt ofAlabama. All Alabamians should bemost pleased to see something reallypositive happen for an area of our statethat has been sorely neglected for alltoo long. I am convinced that progressin the Black Belt will benefit all ofAlabama. Congressman Artur Davis isworking with the Commission andthats a definite plus.

UPDATE ON EXXON MEDIATION

We are still in mediation with Exxonin the State of Alabamas fraud caseagainst the giant oil company. We heldour second session with the mediatorin Atlanta on July 31st. Since the medi-ation sessions are confidential, I cantdiscuss any part of what took place atany of the sessions. The confidentialityorder from the Supreme Court appliesto both the State and Exxon. If themediation fails and the case is notsettled, the issues will go before theAlabama Supreme Court. The case ispresently stayed pending completionof the court-ordered mediation. Fortu-nately for the state, interest is runningon the reduced jury verdict. To date,the interest amounts to well over $300million. We hope that the case will beresolved between the parties. If thatdoesnt happen, however, we will do

our best to win the case on appeal.There is no doubt in my mind that theStates case is extremely strong. If thejustices follow the law and apply it tothe facts that were clearly establishedat trialand I believe they willtheSupreme Court will have no choice butto affirm the jurys verdict. The well-established law and the evidence in thetrial transcript clearly support theStates position. For that reason, I amconfident that help is on the way forthe people of Alabama and the Statescoffers.

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IN THIS ISSUE

I. Capitol Observations . . . . . . . . . . . . 2

II. Court Watch . . . . . . . . . . . . . . . . . . 4

III. The National Scene . . . . . . . . . . . . . 8

IV. The Corporate World . . . . . . . . . . 12

V. Campaign Finance Reform . . . . . . 16

VI. Congressional Update . . . . . . . . . . 16

VII. Product Liability Update . . . . . . . . 18

VIII. Mass Torts Update. . . . . . . . . . . . . 26

IX. Business Litigation . . . . . . . . . . . . 29

X. Insurance and Finance Update . . . 30

XI. Premises Liability Update . . . . . . . 33

XII. Workplace Hazards. . . . . . . . . . . . 34

XIII. Transportation . . . . . . . . . . . . . . . 36

XIV. Arbitration Update . . . . . . . . . . . . 37

XV. Nursing Home Update. . . . . . . . . . 38

XVI. Healthcare Issues . . . . . . . . . . . . . 40

XVII. Environmentals Concerns . . . . . . . 40

XVIII. Predatory Lending Update. . . . . . . 42

XIX. Tobacco Litigation Update. . . . . . . 42

XX. The Consumer Corner. . . . . . . . . . 43

XXI. Recalls Update . . . . . . . . . . . . . . . 45

XXII. Firm Activities . . . . . . . . . . . . . . . . 47

XXIII. A Special Message. . . . . . . . . . . . . 48

XXIV. A Personal Perspective . . . . . . . . . 49

JUDGE MOORE APPEALS TO SUPREME COURT

Former Chief Justice Roy Moore hasfiled an appeal to the U.S. SupremeCourt to reclaim his job as Alabamaschief justice. I doubt there are manyfolks around the country who donthave at least a casual interest in thiscase. In a news conference last month,Judge Moore again claimed he wasousted for professing a belief in Godwhen he refused a federal order tomove the Ten Commandments monu-ment from the Alabama Judicial Build-ing. The lawyers representing JudgeMoore argued that a state judicial ethicspanel imposed an unconstitutionalreligious test on the former chiefjustice when the panel removed himfrom office. Thus far all courts haverejected that argument. The U.S.Supreme Court will now have the finalsay on the issue. It will be interestingto see how the Justices respond.

Recently, the much-discussed monu-ment was moved out of a closet in theJudicial Building by a veterans group.It will be taken on a tour slated to endin mid-October in Washington, D.C.Clearly, the ouster of Judge Moore andthe controversy over the Ten Com-mandments has polarized most folksin Alabama. It has been my observa-tion that folks seem to either love RoyMoore or intensely dislike him. Thereappears to be little middle ground onthe man and his issues in our state, andthat may well be the case around thecountry.

It will be interesting to see whetherthe U.S. Supreme Court will accept theMoore appeal. If the case does gobefore the highest court in the land,the country will get an opportunity tosee all of the references to religionthat are present in and around TheSupreme Court Building. In fact, Ibelieve the High Court still starts itssessions with prayer. It might prove tobe more than a little embarrassing tothe Justices when folks see Moses andthe Ten Commandments engraved instone as they enter the U.S. SupremeCourt building. There are several otherlocations in the building where the TenCommandments are prominently dis-played. Regardless of how one feels

about Roy Moore, it is a sad commen-tary on our times that our country ismoving further and further away froma dependence on God.

As for Judge Moore, I am convincedthat the man is totally sincere in hisbeliefs. It is quite apparent that RoyMoore is willing to take the conse-quences of his actions. The man losthis job and his retirement, and that hasto hurt him and his family. Now effortsare now underway to take away hislaw license, which I believe is totallyinappropriate. Nevertheless, Roy Mooreremains extremely popular with atremendous number of people both inAlabama and around the country. It israther ironic that the harshest criticismof the Judge has come from two direc-tionsthe ACLU and the chiefs in theGOPand that is most interesting. Ifnothing else, the controversy over theTen Commandments has caused manyof us to reexamine our own beliefs andcommitment. I am firmly convincedthat, unless our people return to anobedience to God and a dependenceon his promises, our nation will con-tinue its slide downhill from a moralityperspective.

THE OFFICE OF LT. GOVERNOR

Under the Alabama Constitution, theoffice of the Lieutenant Governor is inthe executive branch of government.Interestingly, however, is the fact thatthe only official duty of this office is topreside over the state Senate. There areno other designated duties, and I havealways felt that was a major mistake.As a few of you may know, I had thehigh privilege of serving as Lt. Gover-nor from 1971 through 1978. Based onmy service and subsequent observa-tions, I have some strong feelingsabout how this office should work inthe future.

When I took office in 1971, the Lt.Governors staff consisted of one secre-tary and the office had no budget.During my tenure, the staffing wasincreased, and when I left state govern-ment, there were an administrativeassistant, a personal secretary, a recep-tionist and three clerical assistants

assigned to the office. Two state troop-ers were also assigned to the Lt. Gover-nor and served as a security detail.Things have changed greatly sincethose days. The office is now ade-quately staffed and funded.

The time I spent as Lt. Governor wasinteresting to say the least. The fact thatGovernor Wallace was the victim of anassassination attempt while running forPresidentleaving him paralyzedgreatly changed everything for me andfor the office while I was there. Fromthat fateful date in 1972, the overalldemands on the Lt. Governors officeincreased significantly and never reallylet up. I left office convinced that theoffice needed to be changed insofar ashow it was set up and functioned. Ihad felt all along that the Lt. Governorneeded to be a full-time official in theexecutive branch with no legislativeduties.

I am firmly convinced that the Lt.Governor should be in the executivebranch and have no duties of any kindthat involve the Senate. I also believethat persons running for Governor andLt. Governor should be required to runas a team in the political primaries andin the general election. This wouldmean the two offices would be filledby persons elected from the samepolitical party. The Lt. Governor shouldbe more like an assistant to the Gover-nor and could serve much like theVice-President does on the nationallevel. This could be accomplished inpart without a constitutional amend-ment, but it would be much better todo it the right way, by an amendmentto the Alabama Constitution of 1901.Otherwise, the temptation to presideover the Senate and influence keySenate votes would always be there. Iam convinced that the Senate would bebetter served by having its presidingofficer coming from the body. ThePresident of the Senate would beelected by the 35 Senators and wouldhave such duties and authority asgranted by the members of the Senate.I hope that one of these days my rec-ommendations will become a reality.However, I am a realist and doubt thatit will happen unless it comes with anew constitution.

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A LOOK AHEAD

Obviously, I have no reason tobelieve there will be any change in themake-up of the Lt. Governors officebefore the 2006 election. However,even with the reduced responsibilitiesgiven to the current Lt. Governor, thereis still considerable interest in theoffice. There are a number of personsbeing mentioned as possible candi-dates. From the Senate, I understandthat Lowell Barron, Zeb Little, JeffEnfinger, Wendell Mitchell, Ted Littleand Vivian Figures are being discussedas potential candidates. According tocapitol insiders, there are also severalHouse members who may be consider-ing the race. Those include MikeHubbard, John Knight, Ken Guin andBilly Beasley (who happens to be mylittle brother). All of the above wouldchange overnight if Lucy Baxleydecided to seek reelection, rather thango for the big office. I doubt seriouslyif anybody would run against Lucy ifshe sought a second term. She isextremely popular and is a good cam-paigner. If Lucy elects to go a differentroute, however, the field will becomevery crowded. In any event, I hopeone of these days the concept of theoffice is changed for good. I believethe state would benefit greatly whenand if that ever happens.

DEADLINE PASSES WITH NO DEAL ININTERSTATE WATER DISPUTE

The July 31st deadline passed with nowater-sharing agreement between thestates of Georgia and Alabama. A pro-vision that would allow metropolitanAtlanta to triple its consumption ofwater from Lake Allatoona in northwestGeorgia has been the major stumblingblock between the two states. Thedispute apparently is bound for areturn to federal court. Most observersagree that Alabama cant afford to sac-rifice our water future just to satisfyAtlantas water needs. A tentativeagreement over the Alabama-Coosa-Tallapoosa River Basin, which includesAllatoona Lake and is the drinkingwater source for Cartersville and Rome,was signed in April 2003. Lawsuits over

sharing water from the ChattahoocheeRiver came back to the forefront after asimilar agreement among Georgia,Alabama and Florida expired lastAugust. I suspect the courts will haveto resolve the water issues, and it wontbe easy.

The Alabama-Coosa-Tallapoosa agree-ment would allow metropolitan Atlantato draw three times more water out ofAllatoona over the next 30 years, andsend nearly half down the Chatta-hoochee River rather than keeping it inthe Coosa River Basin. This would be atremendous amount, estimated to be inthe neighborhood of 100 milliongallons each day. That would mean anet loss of water flowing past Romeand on into Weiss Lake in Alabama. Iunderstand that Alabama officials werewilling to accept that in return for aguaranteed minimum amount of water,including during times of droughts.

I also understand that Florida isworking on a case to take to the U.S.Supreme Court. Negotiators for Georgiaand Alabama were trying to avoid thesame fate for the Coosa River basin.Negotiators simply werent able toreach an agreement. Admittedly, thisissue is a most difficult one. To put it ineasy to understand languageits atough nut to crack! The dispute overthe Coosa River was considered bymost observers to be easier to solvethan the Chattahoochee. That probleminvolves three states and supplies mostof the water for metropolitan Atlanta.The renewed fight over the Chatta-hoochee obviously affected the CoosaRiver talks. Georgia wanted Alabama tolet metropolitan Atlanta take morewater out of the Chattahoochee as partof the deal for the Coosa. Georgia alsowanted to be able to send Alabamaless water than the guaranteedminimum amount in case of a severedrought. Everybody agrees that this is amost serious matter with long-rangeramifications. Few people appear tocomprehend how important the rightsto water usage are in this country. I amnot alone in believing that the prob-lems will intensify over the next fewyears. Water has become a preciouscommodity and will become evenmore valuable in years to come.

VOCAL HAS NEEDS

Victims of Crime and Leniency, betterknown as VOCAL, does a tremendousjob of assisting survivors of homicidevictims. Since opening Angel House in1999, VOCAL has assisted over 200,000survivors. Due to severe cuts in theirgrant funding, however, the organiza-tion now has to raise 50% of their totalbudget, which is now approximately$85,000. They badly need financialassistance. The service this organizationprovides to our state is invaluable.Please make a donationif youbelieve that VOCAL has a place in ourcriminal justice systemand mail it toVOCAL, P.O. Box 4449, Montgomery,AL 36103. VOCAL is a non-profit organ-ization.

II.COURT WATCH

VERDICT IN FEDERAL COURT INPOLLUTION CASE

A federal court jury in Opelikaawarded $20,709,000 to the City ofColumbus, Georgia, Action Marine, Inc.,and two individuals in an air pollutionlawsuit filed against Continental Carbonand its parent company, China Syn-thetic Rubber Corporation. The juryverdict consisted of $1.9 million in com-pensatory damages, $1.294 million inattorneys fees and expenses and $17.5million in punitive damages. The casewas tried under Georgia law since all ofthe damages occurred in Georgia eventhough the polluting emissions camefrom the plant located in Phenix City.

Air emissions of carbon black fromthe Phenix City plant damaged prop-erty owned by individuals and busi-nesses in the Columbus area. Thebusinesses also lost significant income,property values were greatly damagedand individuals suffered physical andemotional damages. In addition to theCity of Columbus, only one businessowner and two individuals wereinvolved in this case. Other suits willbe filed now that the first trial is over.The case had started as a potential


class action, but because damages suf-fered varied the trial judge properlydenied class certification. All claimswill be handled on an individual basis.

The manager of the Phenix City planthad requested numerous pollutioncontrol improvements at the plant, allof which were rejected by the parentcompany. Documents presented at trialrevealed severe environmental prob-lems at the plant relating to the releaseof carbon black, which were known bythe defendants. Carbon black is apowder-like substance manufactured atthe Continental Carbon plant in PhenixCity. The jury found that ContinentalCarbon and China Synthetic RubberCorporation had acted in bad faith,which allowed the award of punitivedamages under Georgia law.

David Byrne, III and Rhon Jones,from our firm along with co-counselEddie Jackson of Jasper and Jeff Fried-man of Birmingham tried the case,which lasted for over two weeks. Thiscase was a prime example of a largecorporation ignoring the safety andwelfare of citizens in the area andrefusing to install needed pollutioncontrols. The conduct by both corpora-tions was extremely bad and the jurorsrecognized it. We will ask for court toforce the defendants to make the nec-essary improvements and clean uptheir operations. This can be done veryeasily and is long overdue.

After three years of cover-up, lying toregulatory agencies and deception, ajudge and jury heard the whole story.Hundreds of folks, including businessowners in Columbus, have beenseverely damaged as a result of someextremely bad corporate conduct. Thiscase was a prime example of why wemust keep our courts open and pre-serve the jury system. No regulatorybodystate or federalhad been ableto get anything done to stop themassive pollution problems at thePhenix City plant.

TRIAL SECRECY IS NOT GOOD

On numerous occasions I haveexpressed my views concerning confi-dential settlements and protective

orders in litigation. All of our readersshould know by now that I dont likesecrecy in lawsuits. Unfortunately, alltoo many courts are allowing corpora-tions to keep their dirty secretshidden from public view and I believethat is wrong. Despite the potentiallydeadly consequences, these courtshave allowed vital information revealedduring lawsuits to be kept secret andaway from public view and scrutiny. Asa result, consumers are paying theprice for that secrecy with their lives inmany instances. In many instances,corporate defendants will agree tosettle cases only if confidentiality is apart of the settlement agreement. Thisobviously puts the victim, who in mostcases simply needs the money tosurvive, in an untenable position. Theysimply have little choice and generallyagree to the defendants demands. Incases dealing with severe disability of aplaintiff or the death of a breadwinner,it allows the defendant to achieve itsgoal, and thats keeping hazards anddangerous conditions a secret. In somecases, defendants are actually able toget the court to enter very strict protec-tive orders, the effect of which keepsbad information and bad documentsfrom the public.

Fortunately, some courts are begin-ning to take action favorable to thepublic on the secrecy issue. The legis-latures in several states have alsostepped into this arena with goodresults. Currently, 20 states either banor limit secrecy orders. The stateswhich have legislation on the books atpresent are: Arizona, Arkansas, Califor-nia, Connecticut, Delaware, Florida,Georgia, Idaho, Indiana, Kentucky,Louisiana, Massachusetts, Michigan,Nevada, North Carolina, New Jersey,Oregon, Texas, Virginia and Washing-ton. Unfortunately, Alabama is not onthe list. I hope there will be an effort toput anti-secrecy legislation on thebooks in Alabama and other states thatwill protect the public from secret set-tlements and oppressive protectionorders. The public in each of the statesthat havent taken action shouldcontact their Governors and legislatorsand demand that they get involved.

COURT SPANKED FOR RELEASINGSETTLEMENT INFORMATION

A judges decision to reveal that asex discrimination case ended in amulti-million dollar settlement hasbeen criticized by the U.S Court ofAppeals for the Second Circuit. Theappeals court called the trial judgespublic revelation on the settlementbetween a female plaintiff andDeutsche Bank AG a serious abuse ofdiscretion. But, the court also saidnothing could be done to remedy theerror. The plaintiff had been a partnerin the Deutsche Bank Capital partnersunit and filed suit in 2002. The claimwas that she was passed over for pro-motion because she is a woman andthat the bank maintained a work envi-ronment hostile to women.

The parties entered into a confiden-tial settlement in 2003. The trial judgeordered the unsealing of several docu-ments in the case, including a study ofgender diversity in the bank. The docu-ments did not disclose the settlementamount, but the courts order revealedthat the parties had agreed to a multi-million dollar settlement. The orderwas promptly published on the data-bases of Westlaw and Lexis and anappeal was taken by the bank. Theappeals court remanded the case withinstructions to the trial judge to takesome steps to redact from the recordother confidential information relatingto the settlement between the parties.

THE PRESIDENT HAS AN ANTI-CONSUMERAGENDA

I doubt that many of our readers willbe surprised to learn that the BushAdministration is working hard to payback the pharmaceutical industry andmanufacturers of medical devices, atthe expense of consumers, for theirpolitical support. In fact, I fullyexpected that very thing to take place.The Administration has now gone tocourt to block lawsuits by consumerswho have been injured by prescriptiondrugs and badly designed medicaldevices. The Bush Administrationatthe direction of Field Marshal KarlRovecontends that consumers cant


recover damages for such injuries if theproducts have been approved by theFood and Drug Administration. This isa most significant and dangerouschange in governmental policy. It isshocking that the Justice Departmenthas already persuaded a few judges toaccept its arguments. Most recently, theBush Administration achieved what itclaims is a major victory in a federalappeals court in Philadelphia.

Back in 2002, the Bush Administra-tion outlined plans at a legal sympo-sium for FDA involvement in productliability lawsuits. At that time fewifanylegal scholars really took themseriously. But, since that time the Bushlawyers have been methodically pursu-ing that very strategy. Their actions areextremely bad for consumers and withgood reason. For example, anybodywho has followed the federal Food andDrug Administration closely knows thatthe agency has allowed a number ofbad drugs to be put on the market.Many believe the FDA is pretty muchan extension of the pharmaceuticalindustry and as a result doesnt ade-quately protect the public interest. Thatis a view I share. Our firms experiencein litigation against the drug companiesconvinces me that I am correct in mythinking on this subject.

As usual, in his latest anti-consumeraction, the President attacks triallawyers, claiming that lawsuits imposea huge burden on the economy anddrive up health costs. You may recallthat when running, the Presidentclaimed to be a compassionate conser-vative. But, since taking office Bushscompassion hasnt extended to victimsof corporate wrongdoing or abuse. Inthis latest payback effort, the BushAdministration is taking the FDA in anew and most radical direction.Seeking to protect drug companies atthe expense of the public has come tobe expected from the Rove-run WhiteHouse. So, I really believe we shouldhave anticipated that which has nowbecome a reality. But, the Americanpeople should never accept it, andsimply put, thats because its not intheir best interest.

The Bush tactics have also beenapplied in product liability cases filed

against the manufacturers of medicaldevices. In the Pennsylvania ruling, theappeals court threw out a lawsuit filedby a lady whose husband died becauseof alleged defects in the design andmanufacture of his heart pump. TheBush Administration argued thatfederal law barred such claims becausethe device had been manufacturedaccording to federal specifications.The Administration conceded,however, that its present views differfrom the views that the governmenthad advanced in 1997. At that time theJustice Department had taken a totallydifferent position in a case before theUnited States Supreme Court. The gov-ernment then said that FDA approvalof a medical device set the minimumstandard and that states could provideadditional protection to consumers.Now the Bush Administration arguesthat the agencys approval of a devicesets a ceiling as well as a floor.

The Administration said its position,holding that individual consumers haveno right to sue, actually benefited con-sumers, which is totally absurd. Forexample, there have been a tremen-dous number of drugs that wereapproved by the FDA, but subse-quently withdrawn from the market.Under the RoveBush logic, therecould never be a lawsuit against anymanufacturer, that knowingly puts adangerous drugapproved by theFDAon the market. That is totallyillogical and also immoral since peoplewill be badly hurt as a result.

Allison M. Zieve, a lawyer at thePublic Citizen Litigation Group whorepresented the plaintiff in the Pennsyl-vania case, correctly says that the gov-ernment has done an about-face on thisissue. If courts accept the Bush Admin-istrations position, it will be nothingmore than a back-door type of tortreform that would totally shield man-ufacturers from damage suits. In thePennsylvania case, the federal appealscourt quoted extensively from theAdministrations brief and said theviews of the FDA were entitled to greatdeference because the agency wasuniquely qualified to determine whenfederal law should take precedenceover state law. Patients and their fami-

lies have been betrayed by the Presi-dent on this issue. Unfortunately, fewfolks even know what is happening onthis most important issue and wontuntil it directly affects them.

The Bush Administration will attemptto extend this rationale to any productthat has to be approved by a federalagency. Can you imagine what theauto industry would do if it received ablanket immunity from lawsuits? Someof the NHTSA standards for automo-biles are extremely weak and aremeant to be only the most minimum ofstandards. For example, a frail alu-minum lawn chair put in a car as afront seat will meet the federal stan-dard for automobile seatbacks. Thatshow weak that standard is. Consumersneed to be alerted to this latest effort tokeep victims from filing meritoriouslawsuits against Corporate America andto protect corporate wrongdoings.

BLOCKING MEDICAL PRODUCT SUITS ISWRONG

The New York Times had an excellenteditorial on the attack on consumers bythe Bush White House in its August 1stedition. It tells a compelling story andone that should be heard by con-sumers nationwide. For that reason, Ihave set out the editorial in its entirety.

It is disheartening that the BushAdministration has been interven-ing in court to block lawsuits filedby people seeking compensationfrom manufacturers for harmallegedly caused by drugs ormedical devices. As described byRobert Pear in last Sundays Times,the Administration has argued inseveral cases that individual con-sumers have no right to sue forsuch injuries if the products havebeen approved by the Food andDrug Administration. If the BushAdministrations campaign provesbroadly successful, people injuredby drugs or medical devices may beleft without legal recourse, nomatter how just their complaints.

In a recent ruling, a federalappeals panel in Philadelphia,


after seeking the Administrationsviews, threw out a lawsuit filed bythe widow of a man whose heartpump failed. Whatever the legalmerits of this close two-to-one deci-sion, which turned on the degree towhich the FDA can pre-empt statelaws and court decisions, mostfair-minded Americans wouldprobably think that the widow gota bum deal. The facts of the case asalleged in court documents suggestthat the heart pump, thoughapproved by the agency, wasdesigned poorly.

The device had several componentsconnected to each other by screwrings or other threaded connec-tions that were vulnerable to loos-ening because of motions withinthe body. The model inserted intothe Pennsylvania man used afactory-installed suture to preventsuch loosening, but that sutureapparently broke because it rubbedagainst the breastbone, allowingthe joint to separate and an airbubble to travel to the brain. Theprecise role of the heart pump incausing the mans death maynever be known because the casewas aborted before it went to trial.But the manufacturer subsequentlydesigned a self-locking screw ringthat required no sutures andwould very likely have preventedthis accident.

The Administration argues thatallowing consumers to sue themanufacturers would underminefederal regulation of drugs anddevices by encouraging lay judgesand juries to second-guess theexperts at the FDA. The result couldbe a hodgepodge of conflictingjudgments around the country asto the safety of a product and theneed to change warning labels.Skittish manufacturers might thenremove good products from themarket or issue scary warningsthat would discourage their use.

These concerns seem overblownand are offset by other considera-tions. The FDA is not infallible. It

seems poor policy to assume thatonce the agency has judged aproduct safe enough to use, themanufacturer should be insulatedforever from lawsuits that couldforce improvements. Simple justicesuggests that victims harmed by aproduct should be able to seek com-pensation. If a manufacturer hasacted in good faith and receivedthe agencys approval, the likeli-hood of huge punitive damages -the real btes noires of the tortreformers - seems slight.

Angered by the FDAs interventionon the side of manufacturersagainst consumers in several cases,Representative Maurice Hinchey,Democrat of New York, persuadedthe House to amend an appropria-tions bill to strip $500,000 from theagencys legal budget as a penaltyand use it instead to police theaccuracy of drug advertising. If theSenate finds that approach toopunitive, it might forgo the finan-cial penalty and simply direct theagency not to intervene in productliability cases unless it is asked todo so by the courts. Or perhapsCongress should devise a new com-pensation fund so that victims whoare blocked from suing can never-theless be compensated for anydamage they have suffered. Mean-while, if the Administration wantsto reform the tort system it shouldtackle the problem broadly, notpiecemeal through individual suits.

WHISTLE-BLOWERS PERFORM A VALUABLEPUBLIC SERVICE

In my opinion, corporate whistle-blowers are doing the public a greatservice. For example, without EnronsSherron Watkins, we may never haveknown about the Enron scandals. Itwas significant that Time magazinenamed this lady in 2002 as one of itsPeople of the Year. Whistle-blowers,who speak out against corporate mis-deeds and start the ball rolling againstthe company and its executives, are tobe commended. I believe that theyshould be considered heroes by folks

in this country who are sick and tiredof the tremendous number of scandalsthat have swept through CorporateAmerica. Nobody knew how really badCorporate America was when theEnron scandal first broke.

Over two years ago an Enron-inspiredlaw was passed by Congress that gavewhistle-blowers who come from publiccompanies the right to sue for wrongdo-ing that could adversely affect share-holders. Since the Sarbanes-Oxley Actwas passed, corporate whistle-blowershave filed about 100 cases under thelaw against companies that were violat-ing the law and cheating both their ownemployees and stockholders. Thewrongful actions and their ramificationsalso affect the general public and ournations economy.

While potential whistle-blowers maybe hesitate to speak up for those whocant do so themselves, I believe itstheir moral and civic duty. Unfortu-nately, many persons who have blownthe whistle on corporate corruptionfound themselves being targeted by thevery corporation they reported as aresult of their actions. Many whistle-blowers say that once their complaintsbecome public, the workplace oftenbecomes hostile and threatening. I sin-cerely believe that the judicial systemand the U.S. government have jointobligations to protect men and womenwho have the courage to step forwardand expose corporate wrongdoing. Asignificant section of the new FederalAct provides federal protection towould-be whistle-blowers. Obviously,that is badly needed and should protectthe whistle-blowers from retaliation. Source: USA Today

LAWSUITS AGAINST NON-PROFIT HOSPITALS

A number of lawsuits have been filedaround the country against non-profithospitals. Over the past severalmonths, there has been a growingdebate over charity care provided bythe nations non-profit hospitals, whichincidentally represent 85% of the indus-try. Many believe the non-profits actmore like profit operations. In fact, theclaim is that the 300 facilities sued act


more like for-profit entities than tax-exempt charities. As you probablyknow, the industry has been underattack on several fronts, and it doesntappear things will get better any timesoon. The non-profit facilities appar-ently charge uninsured patients morethan what insurers would pay for thesame services. Additionally, their priceshave increased tremendously, with noend in sight. Aggressive collectionpractices by the facilities are also wellknown and have caused a great deal ofcontroversy. Some of their practiceshave included placing liens on homes,attaching wages and even arrestingsome debt-owing patients.

The lawsuits are attempting to makethe hospitals refund money to unin-sured patients who were overchargedfor services, stop hounding low-incomepatients for payments, and stop signingexclusive agreements with groups ofdoctors in which the physicians getfree use of the facilities, while otherdoctors are being shut out. To theircredit, some hospitals have recentlychanged their billing and collectionprograms by offering sliding-scale dis-counts to low-income uninsuredpatients. The debate over the legal andethical responsibility of the nationsnon-profit hospitals to provide charitycare will be addressed in the lawsuits.The IRS has never been really clearabout what the grant of tax-exemptstatus really means. These cases willgive the courts an opportunity to clearup that confusion. Obviously, the non-profit hospitals will fight these cases.

You may recall that in late June, hos-pital CEOs were called before Congressfor a hearing. During the hearing,House Ways and Means CommitteeChairman Bill Thomas (R-Calif.), chal-lenged the non-profit side of the indus-try and questioned their tax-exemptstatus. Representative Thomas made thefollowing comment during the hearing:If in fact there are as many for-profitsthat can be shown to give a break tolow-income (patients) as not-for-profits,then thats not really a difference forreceiving the tax benefit. These caseswill be watched with interest and Ipredict they will be successful.

JEWISH CLAIMS CONFERENCE FINALLYPAYING OFF

The Jewish Claims Conference ispaying out $401 million in compensa-tion to Nazi-era slave laborers, com-pleting payments to Jewish survivorsfrom a German government-industryfund that started work three years ago.More than 130,000 people worldwideare receiving up to $3,000 each in thesecond and final round of payments,according to a report from the organi-zation. Since June 2001, the claims con-ference has paid a total of $703 millionin first installments to survivors. The$6.17 billion fund to compensatepeople forced to work for the Nazi warmachine was set up by the Germangovernment and industry under pres-sure from lawsuits in the United States.

The Claims Conference has handledclaims for Jewish applicants world-wide. National organizations in theCzech Republic, Poland, Russia andelsewhere have handled claims fortheir countries. Claims ConferencePresident Israel Singer told AssociatedPress that the payments are a smallmeasure of justice, for which survivorshave waited for more than 60 years.The German fund has said it expects tomake payments to as many as 1.9million victims in total, the majority ofthem in central and eastern Europe.These payments are long overdue andare certainly justified. I only wish theamounts could have been larger.Source: Associated Press

DOCTORS WIN $5.5 MILLION AWARDAGAINST YALE

A Connecticut jury has awarded $5.5million to three physicians whoaccused Yale University of retaliatingagainst them over complaints aboutpoor patient care and mismanagementin its radiology department. The jurydeliberated for 15 hours over three daysbefore reaching a verdict. The decisioncapped six weeks of testimony. ArthurRosenfield, Morton Burrell and RobertSmith were doctors who also taught atYales medical school. They complainedto administrators and the president ofYale that cost-cutting measures were

putting patients at Yale-New HavenMedical Center at risk.

The three doctors alleged that non-specialists were involved in diagnosticstudies and teaching physiciansapproved studies interpreted by resi-dents without checking their accuracy,a violation of Medicare rules andpatient care principles. The doctors sayYale failed to address their concerns,but instead cut their pay and removedthem from their leadership positions.The doctors sued in January 2000,accusing Yale of violating their right tofreedom of speech and academicfreedom by retaliating against them.During the trial, Yale portrayed thedoctors as disgruntled employeesworried about protecting their turf andmaintaining a comfortable workload.Yale claimed the doctors used patientcare as a cover to air their grievances.The trial also focused on health careindustry changes in the mid-1990s.Federal cost cutting for CT scans, MRItests and other exams forced Yale tocontinue its work with less money. Idont guess these three will have anyproblem paying their malpractice pre-miums if they collect.

III.THE NATIONALSCENE

PRESIDENT BUSH WAS ON TARGET

President Bush was absolutely rightin his views about why we shouldnthave gone to war against Iraq andwound up being bogged down in along-range occupation of that country.In fact, the President made his feelingsknown long before the current inva-sion of Iraq began and was very clearin explaining his views. However, thiswas President George H. W. Bushnothis son, our current President. In hismemoirs, A World Transformed,written five years ago, George H. W.Bush explained why he didnt go afterSaddam Hussein at the end of the GulfWar, and this is what he said:


Trying to eliminate Saddam...would have incurred incalculablehuman and political costs. Appre-hending him was probably impos-sible... We would have been forcedto occupy Baghdad and, in effect,rule Iraq.... There was no viableexit strategy we could see, violat-ing another of our principles. Fur-thermore, we had been consciouslytrying to set a pattern for handlingaggression in the post-Cold Warworld. Going in and occupyingIraq, thus unilaterally exceedingthe United Nations mandate,would have destroyed the prece-dent of international response toaggression that we hoped to estab-lish. Had we gone the invasionroute, the United States could con-ceivably still be an occupyingpower in a bitterly hostile land.

It sure does appear that the elderBush was right on target. We arefinding out the hard way that he wascorrect in his views. I just wish thecurrent President had read and listenedto his fathers advice. Maybe the failureby George W. Bush to understand whatwe were getting into in Iraq is why somany retired generals are backing JohnKerry to be the next Commander-in-Chief. In any event, the elder Bush waspretty much a prophet on how theoccupation of Iraq would turn out. Isincerely wish he had been wrong!

SENATOR MCCAIN DEFENDS JOHN KERRY

Senator John McCain called the adcriticizing John Kerrys military servicedishonest and dishonorable. TheSenator urged the White House tocondemn the ad and stated in an inter-view with The Associated Press, It wasthe same kind of deal that was pulledon me. Senator McCain was referringto his bitter Republican primary fight in2000 with thencandidate Bush. The60-second ad features Vietnam veteranswho accuse John Kerry of lying abouthis decorated Vietnam War record andbetraying his fellow veterans by lateropposing the conflict. I believe the adwas used in Ohio, West Virginia andWisconsinall states critically impor-

tant to the Bush campaign. You may recall that in 2000 Karl

Rove and the Bush campaign startedan effective rumor campaign againstJohn McCain in the South Carolinaprimary. At that time McCain, likeKerry now, had the momentum andthe Bush campaign was on the ropes.The Rove attack on Senator McCainmost probably allowed Bush to win theprimary and ultimately the nomination.Senator McCains supporters havenever forgiven the Bush team and Icant blame themthe rumors wereboth false and vicious. Senator McCaintold The Associated Press:

I deplore this kind of politics. Ithink the ad is dishonest and dis-honorable. As it is, none of theseindividuals served on the boat(Kerry) commanded. Many of hiscrew have testified to his courageunder fire. I think John Kerryserved honorably in Vietnam.

I believe the American people aresick and tired of the Karl Rove brand ofpolitics. He is a master of the smear-type campaign tactics that havebecome his trademark. This is part ofwhat is so badly wrong with politics inthis country. The President should tellRove enough is enough and to put astop to his brand of politics. Personally,I find it distasteful for any political bossto attack any combat veterans militaryrecord during a political campaign. It isespecially bad when none of thepersons behind the attacks have evenworn a military uniformmuch lessfought in combat.

GRAND JURIES INVESTIGATE HALLIBURTONSUBSIDIARIES

A Houston, Texas grand jury hasbeen investigating Halliburton Co.sbusiness dealings with Iran, a countrylong suspected of sponsoring terrorism.A federal grand jury for the SouthernDistrict of Texas subpoenaed docu-ments related to Iran. While federal lawprohibits U.S. companies from tradingdirectly with Iran, foreign subsidiariesare allowed to do business with roguestates, as long the foreign entity is

truly independent of the U.S. opera-tion. I have great difficulty in under-standing how Halliburtonwith itsclose ties to the Bush Administrationcould even think about doing businesswith a country like Iran. This is trueeven though it used a subsidiary in thedeals.

I believe that the Iranian investiga-tion centers on a Cayman Islands-regis-tered oil-field service operation calledHalliburton Products & Services Ltd.That entity, which is headquartered inDubai, United Arab Emirates, sellsabout $30 million to $40 million worthof oil-field equipment and services tocustomers in Iran annually. Halliburtonalso owns a British oil tool companyand three engineering outfits based inthe United Kingdom and Sweden, all ofwhich make sales to Iran. The TreasuryDepartments Office of Foreign AssetsControl began to inquire about theoperation registered in the CaymanIslands three years ago. The federalagency that enforces commercial tradebans, however, took no other knownaction until CBS News 60 Minutesvisited Halliburton Products & Servicesaddress in the Caymans and questionedwhether any business was actuallybeing conducted there. In January, theOffice of Foreign Assets Control fol-lowed up and demanded additionalinformation.

After the CBS piece aired, the SenateFinance Committee launched its ownprobe. Lawmakers wanted to knowwhen these subsidiaries were created,how long theyve been conductingbusiness in Iran, how much theyvemade there and how much theyvepaid the government of Iran in taxesand other fees. Committee membersasked the companies to address mediareports that said mail sent to Hallibur-ton Products & Services is forwarded toHalliburtons offices in Houston, sug-gesting that decision-making authorityresided in the United States rather thanin the Caymans or Dubai.

A separate grand jury in Illinois isexamining another issue that has longplagued Halliburton, problems of overbilling for providing logistical supportfor U.S. troops in Iraq. The grand juryis examining two former employees


who are suspected of receivingimproper payments from a Kuwaitisubcontractor as part of a scheme toovercharge the Army MaterielCommand. Halliburton had over-charged on that project to the tune of$4 million.

According to an SEC filing, Hallibur-ton concluded its business dealingswith Iran were in full compliancewith applicable sanction regulations.Frankly, I can see no justification forany U.S. companyand especiallyone with ties to the Vice-Presidentbeing allowed to do business with acountry such as Iran. Even if it didnthave its obvious political ties to theBush Administration, Halliburtonshould put a stop to such activity atonce. In fact, the Vice-Presidentshould call his old buddies back at thecompany and get them to stop thishighly questionable conduct. After all,Iran is an enemy of this countryaccording to our President.

9/11 PANEL SUGGESTS INTELLIGENCEOVERHAUL

A few weeks ago, the Americanpeople finally got to see and read thefinal report issued by the September11th Commission. This report recom-mended, among other things, the cre-ation of a new intelligence center andhigh-level intelligence director toimprove the nations ability to disruptfuture terrorist attacks. The panel alsodetermined the most importantfailure leading to the September 11thattacks was one of imagination. Itpointed out that our leaders failed tounderstand the gravity of the threatand ignored a series of warnings. Com-mission Chairman Tom Kean, theformer Republican Governor of NewJersey, stated at a news conference:

The 9/11 attacks were a shock, butshould not have come as a surprise.By September 2001, the executivebranch of the U.S. government, theCongress, the news media, and theAmerican public had receivedclear warning that Islamist terror-ists meant to kill Americans in highnumbers.

The report, which is the culminationof a 20-month investigation into theplot that killed nearly 3,000 people inNew York, Washington and Pennsylva-nia, describes the meticulous planningand determination of hijackers whosought to exploit weaknesses in airlineand border procedures by taking testflights. The report emphasizes that theUnited States and its allies mustembark on a global strategy of diplo-macy and public relations to dismantlethe terror network led by Osama binLaden and defeat the militant Islamicideology that feeds such terror groups. This report has a number of recom-mendations that should be enactedwithout delay. While most of the rec-ommendations will require Congres-sional action, some of them can becarried out by the President. Clearly, anon-partisan effort is needed to bringabout the needed changes. Neitherparty can afford to play political gameswith this matter.

At the outset, President Bush did allhe could to keep the Commission frombeing created and tried even harder tokeep key government figures from testi-fying. Nevertheless, the President nowhas an obligation to carry out the Com-missions recommendations withoutdelay. Because Karl Rove reads the pollsand keeps his finger on the pulse of thepublic, the President will most likely actpromptly. In any event, I believe thatCongress should be called into specialsession and all steps taken that are nec-essary to carry out all of the Commis-sions recommendations. Simply put, apartial fix wont get the job done. Apolitical fix would be the worst thingthat could happen. The fight againstterror must be made a top priority forthe federal government. Anything lesswont be accepted by the public.

SOFT MONEY SHOULD BE REMOVED FROMNATIONAL PARTY CONVENTIONS

Public Citizen and the U.S. PublicInterest Research Group (PIRG) havecalled on the Federal Election Commis-sion (FEC) to ban soft money from thenational party conventions based onthe abuses that are occurring at theconventions this year. The conventions

have more money, donated by corpora-tions, labor unions and special interestgroups seeking favors from the parties,than they can ever spend. More than$100 million in soft money has beencontributed to the conventions thisyear. $39.5 million of the total went tothe Democrats and $64 million to theRepublicans. This information comesfrom the Campaign Finance Institute.Soft money is now the primary fundingsource for national party conventions,putting party leaders and politicians inthe position of owing favors to the big-money donors.

Neither political party should beallowed to take soft money and espe-cially not for their respective conven-tions. The FEC should abide by thespirit and letter of federal campaignfinance laws, and prohibit theseabuses. The funding of this years con-ventions is a prime example of asystem that is out of control. FECs reg-ulatory regime governing conventionfinancing is a travesty. Congressworked long and hard to purge unlim-ited and corrupting soft money fromthe system. The FEC should do its partin implementing the law and get softmoney out of federal elections. Thenext President and the new Congressshould make campaign finance reforma top priority and finish the job startedin 2003.

YOU WILL HEAR MORE ON FREEDOMWORKSTHIS FALL

I doubt that few American citizenshave ever heard of a group called Free-domWorks. There is a good reasonsince the group was just formed. Istrongly recommend that you checkout this group, which has a catchyname. Citizens for a Sound Economy(CSE) and Empower America havemerged to form a grass-roots politicalgroup to bolster their fight for whatthey refer to as lower taxes, less gov-ernment and more economic freedom.They named their new group Freedom-Works and that was to garner attention.But, its nothing but a political organi-zation that will operate under the radarand work to elect Republican candi-dates. The identities of some of the


former chairmen of CSE and EmpowerAmerica tell us lots. CSE had beenmost recently chaired by Dick Armey(R-Tex.), the former House MajorityLeader; C. Boyden Gray, White Housecounsel for President George H. W.Bush, was a former chairman of CSE.At Empower America, former NewYork representative Jack Kemp andWilliam Bennett, former education sec-retary in the Reagan Administration,chaired the group. Armey, Gray andKemp will co-chair the new group, andBennett will be a senior fellow focus-ing on school choice. Matt Kibbe isthe new president and chief executive.While the group claims its nonpartisan,I will be shocked if it doesnt have apolitical agenda.

FreedomWorks claims more than360,000 members and is organized in away that will allow for lobbying, politi-cal fundraising and political activities,including voter education and get-out-the-vote efforts in key campaigns. Thegroup also claims to have a politicaldatabase with more than 600,000 con-servative activists. This group will be abig time player in this falls electionsand wont have to account for howmuch they spend or where theirmoney comes from. Their agenda is totake care of the super-rich and todestroy the American middle class inthe process. They will have hundredsof millions to spend, and thats a dan-gerous thing for the health and well-being of our nation.

MILKING THE FARM PROGRAM

When Congress passed the latestfarm bill in 2002, the stated goal was tohelp struggling family farmers. Thatwas clearly a worthwhile mission. Asyou may know, the bill carried a $180billion price tag. I suspect most Ameri-cans believe the program was designedto help farmers who were having ahard time making ends meet. But, anew study from the Heritage Founda-tion finds that family farmers haventbeen the beneficiaries. Instead, mostfarm subsidies are distributed to largefarms, agribusinesses, politicians andcelebrity hobby farmers, according to

Heritage. The report says that: Farmsubsidies have evolved from a safetynet for poor farmers to Americaslargest corporate welfare program.Heritage gives a number of examples.Here are a few:

Riceland Foods, in Stuttgart,Arkansas, was paid $110 million in2002, the latest year for which figuresare available;

Producers Rice Mill, another privatecompany in Stuttgart, received $83.9million;

Cargill, located in Minneapolis, Min-nesota, was paid $10.9 million;

John Hancock Life Insurance, adivision of Manulife Financial, col-lected $2.3 million in 2002;

MeadWestvaco received $637,000since 1995;

ChevronTexaco collected $428,000;and

Caterpillar received $320,000.

The numbers in the Heritage reportcome from the Environmental WorkingGroup, which has gone through thefederal figures to come up with thenames of farm subsidy recipients. Youare probably wondering how do richcorporations manage to collect somuch? The answer is simple. Eligibilityfor farm subsidies is determined bycrop, not by income or poverty stan-dards. Heritage says the amount ofsubsidies increases as a farmer plantsmore crops. Thus, large farms andagribusinesses... receive the largestsubsidies.

While big businesses pull down thetaxpayer subsidies, so do a lot ofwealthy individuals, including somemembers of Congress. Lets take a lookat some of the big hitters:

Leading the way in the House ofRepresentatives is Representative CalDooley (D-Calif.), who collected$105,000 in 2002 and has received$626,000 since 1995.

Not far behind is RepresentativeDoug Ose (R-Calif.), who has col-lected $604,000 since 1995.

Third on the list is RepresentativeTom Latham (R-Iowa), who has col-lected $438,000.

Senator Mike DeWine (R-Ohio)received $177,000 since 1995;

Senator Charles Grassley (R-Iowa)received $162,000; and

Senator Richard Lugar (R-Ind.)received $86,000.

Celebrity gentleman farmers havealso done very well. Even high-paidsports stars are on the list. A few bene-ficiaries of taxpayers gifts include:

Ted Turner, the TV mogul, who hasreceived $207,000;

The former chairman of Chase Man-hattan (now part of J.P. MorganChase) who collected $518,000 since1995; and

Scottie Pippen, a star player in theNational Basketball Association, whoreceived $211,000.

I believe the next President and thenew Congress should put a stop to themilking of the farm program by therich and powerful, and shift thatmoney to real farmers. We have thou-sands of family farms that are in direstraits and these are the folks whoshould be helped. I hope enough pressure will come to bear on ourpolitical leaders so that this mess getsa non-political fix.

DISABILITY PAY SHOULD BE GIVEN TO THEMILITARY

We should be doing everything inour power to make life better for ourmen and women returning from thewar zones in Iraq and Afghanistan. But,it doesnt appear that we are doing it.For example, nearly one-third of theNational Guard and Reserve troopsreturning from war with illnesses orinjuries are forced to wait more thanfour months to learn whether theyll becompensated under the militaryscurrent disability system. Fewer thanone in 10 applicants receive the long-term disability payments they request.


Top military officials claim that soldiersdont understand that their disabilitysystem measures fitness for duty, notthe degree of ones sacrifice. Most sol-diers applying for disability pay56%in the Armys caseare leaving servicewith a one-time, lump-sum payment,which clearly appears to be inadequate.

The militarys disability systemresembles workers compensation andlong-term disability in the privatesector. It pays people when they haveillnesses and injuries that are job-related. But, the military looks at amuch narrower set of circumstancesthan do insurers or the Department ofVeterans Affairs. The disability systemonly evaluates ailments that make asoldier unfit for duty in his or her spe-cialty. According to media reports, thedepartment recently was averaging 171days to make initial disability decisions.When the VAs disability compensationkicks in, it normally replaces militarypay. Recipients cant benefit from bothsystems at the same time. Under thecurrent military system, pain by itselfwont win compensation for a soldierwho is suffering. The Army does notkeep statistics on the dollar amounts ofdisability payouts because they arebased on a formula that includes a per-centage assigned to each soldiers disability. But it does maintain recordson how many applicants for long-termdisability receive compensation. Themajority (56.1%) was given a one-time,lump-sum payment in 2003. Seventeenpercent received nothing because theyeither were declared fit for duty ordetermined to suffer injuries unrelatedto their service or due to negligence.An additional 17.1% received tempo-rary disability payments that can bereviewed within five years. And only9.8% won long-term disability pay thatlasts for life.

Soldiers, particularly National Guardand Reserve members, have the rightto complain about the long delays inmedical diagnosis and treatment beforethey can receive a determination of dis-ability. As of late June, 32% of the acti-vated Guard and Reserve memberswere left in a medical holdover statusfor more than 120 days. The delay hadactually been at 41% in November. We

are sending young men and women,and nowadays even older citizens, intoa very tough war in a foreign land. Weshould take care of their needs whenthey return. That is our obligation. Asystem that is broken must be fixedand without delay. We must supportour military and take care of those whoserve us to the best of our ability. Weowe it to our military personnel to treatthem like first-class citizensbecausethey are!

CRUDE OIL PRICES SOAR TO NEWRECORD HIGH

Over the past few months, crude oilprices have soared to new recordhighs. The rises in prices are said tohave been caused by fears of terroristattacks in the United States, disruptionsto Iraqi crude exports, and uncertaintyover the fate of troubled Russian oilgiant Yukos. Since June, oil prices havejumped to record levels. Last monthwas the first time prices went over the$49-a-barrel barrier. Prices are pro-jected to reach well over $50-a-barrel. Iam not smart enough to figure outexactly what is going on in the oilindustry, but there are a few things thatare most apparent. I do know that thegiant oil companies are making recordprofits and ordinary citizens are payingrecord prices for gasoline in the U.S.With the close ties between the BushAdministration and the oil industry, Idont see things getting better any timesoon. As usual, little folks subsidize thebig folks, and this time at the gaspumps around the country.

CHEVRONTEXACOS PROFIT MORE THANDOUBLES

A prime example of how the publicis suffering and the oil industry pros-pering is ChevronTexaco Corp.s earn-ings. That companys second-quarterprofits more than doubled as high-energy prices extended a recent rollthat is shaping into the most prosper-ous stretch in the oil giants 125-yearhistory. The giant oil company earned$4.13 billion ($3.88 per share) for thethree months ending in June. That

compared with net income of $1.6billion ($1.50 per share) for the sameperiod last year. The results went wellpast estimates. Revenue for the periodtotaled $38.3 billion, a 31% increasefrom $29.3 billion last year.

Through the first half of the year,ChevronTexaco had earned $6.69billion ($6.28 per share), a 90%improvement from the same time in2003a year that culminated in a $7.2billion profit. If ChevronTexaco wereto continue its current earnings pacefor the rest of this year, the companywill finish with a profit of about $13.5billion. The huge profits being raked inby ChevronTexaco and other major oilcompanies have fueled consumer com-plaints about price gougingchargesthat industry executives have denied. Ifyou have any doubt, take a look at theearnings picture for each of the majoroil companies. You will find thatChevronTexaco isnt the exception.

IV.THE CORPORATEWORLD

HALLIBURTON TO PAY $7.5 MILLION TOSETTLE PROBE

Halliburton Co. will pay $7.5 millionto settle a Securities and ExchangeCommission (SEC) probe that it failedto disclose a change in its accountingprocedures in 1998 when the oil serv-ices conglomerate was run by Vice-President Dick Cheney. Besides thecompanys fine, a former Halliburtoncontroller, will pay a $50,000 penalty.The SEC found that the company didntproperly disclose the accountingchange, which recognized revenuefrom unapproved claims on long-termconstruction projects. The SEC has fileda complaint in U.S. District Courtagainst Halliburtons former chieffinancial officer. The Commission saysthe undisclosed accounting changecaused Halliburtons public statementsregarding its income in 1998 and 1999to be materially misleading.

During its investigation, which beganin 2002, the SEC said it reviewed 340,000


documents and took sworn testimonyfrom 23 individuals. Vice-PresidentCheney was among those who providedtestimony, according to the SEC. As youknow, Cheney was Halliburtons CEOfrom 1995 to 2000. Many believe thepenalty imposed against Halliburton ismuch too small and avoids addressingCheneys responsibility for the fraud. Itwas alleged that Halliburton improperlyaltered its accounting during Cheneystenure as CEO. Its pretty obvious thatthe companys settlement was becauseof that wrongdoing. It is also very clearthat Halliburtons agreement to pay just$7.5 million pales in comparison to theestimated $120 million by whichaccounting tricks boosted Halliburtonsprofits during Cheneys stewardship. Iwould say that was a pretty good rate ofreturn.

Lets take a brief look at what Hal-liburton did. Beginning in 1997, crudeoil prices began a sharp decline, falling50% from January 1997 to March 1998.This drop in the price of a commodityupon which Halliburton was depend-ent rocked the companys bottom line.In April 1998, under financial pressure,the company embarked on a radicalchange in its accounting practices: Itbegan booking cost overruns in itsconstruction business as income, ratherthan as expenses, and did not ade-quately disclose this change in practiceuntil a year later. As a direct result ofnot properly reporting this accountingchange, Halliburton was able to boostits reported profits by more than $120million, misleading investors in theprocess. Isnt that pretty much whatEnron was accused of?

The failure of the SEC to address theresponsibility of Cheney, who was incharge when the accounting irregulari-ties occurred, and instead focus uponthe companys chief financial officerand controller at the time, indicatesthat politics may have spared the Vice-President from necessary enforcementaction. Clearly, the CFO and controllerat Halliburton both reported toCheney. Its difficult to understand whythe boss, who was in charge, shouldntultimately be held responsible. Onsecond thought, maybe its not so hardto figure that out.

CONSPIRACY AND CORRUPTION CHARGESINVOLVING FORMER TYCO EXECUTIVES

A Judge in the trial of DennisKozlowski and Mark Swartz, formertop Tyco executives, has decided thatthe two executives will stand trial forconspiracy charges in their secondcriminal trial. The Judge rejectedmotions by the executives lawyers todismiss the charges. Kozlowski andSwartz are scheduled to go back to trialfor the second time on January 18th.You will recall that the first trial endedin a mistrial in May after a jurorreported receiving a letter questioningher reluctance to find the executivesguilty and a phone call urging her toconvict the executives. The juror hadcaused a stir several days prior to themistrial by allegedly flashing an OKsign to the defense team. Other jurorsaccused her of refusing to deliberatewith an open mind. A mistrial wasdeclared by the trial Judge after thereported contact with the juror.

Kozlowski and Swartz were chargedwith grand larceny, falsifying businessrecords, conspiracy and securitiesfraud. The former executives areaccused of rewarding themselves withgiant bonuses and other unauthorizedcompensation from Tyco. This resultedin the two men looting the company of$600 million. The effect of the Judgesruling is that Kozlowski and Swartz willessentially face the same criminalcharges as they did in the first case.The men will be tried together becausethe Judge also denied a motion bySwartz for a separate trial. During acourt hearing prosecutors announcedthat they intend to pursue an enter-prise-corruption charge against theformer executives. During the first trial,the Judge decided against allowing thejury to deliberate on the enterprise-cor-ruption charge because the prosecutionfailed to provide sufficient evidence tosustain the charge.

ENRON TO PAY $32 MILLIONFederal energy regulators from the

Federal Energy Regulatory Commission(FERC) have ordered Enron Corpora-tion to give up $32 million in ill-gotten

profits from the western energy crisis.You may recall reading about some ofthe comments made by Enron energytraders in earlier Reports. I believe themost important news from thisannouncement is that it will open the door to much larger payments fromEnron as the energy regulators havenow ordered a review of thecompanys profits from 1997 to 2003.Obviously, the amount of this order issmall compared with the billions ofdollars western states believe Enronand other companies owe them fromovercharges in 2000 and 2001.

In upholding an administrative lawJudges finding that Enron did notproperly inform the FERC of a businessrelationship with El Paso ElectricCompany, the Commission made clearthat Enron could be required to paymore money. In this regard, the Com-mission wrote, We note that based onthe evidence in this docket Enronpotentially could be required to dis-gorge profits for all of its wholesalepower sales in the western Intercon-nect for the period January 16, 1997 toJune 25, 2003. California officials esti-mate those profits to be approximately$3 billion dollars and that figure is nota misprint.

I hope this order is a sign ofprogress. I believe that FERC shouldhave acted much more aggressivelyagainst Enron than it has to date. I amconvinced that the heat and pressure ofthe public attention was brought tobear on FERC and caused the Commis-sion to act. Otherwise, they wouldhave done little. But at least FERC isfinally doing their job. Pressure onFERC to take action against Enron grewmore intense after the release of taperecordings in June (referred to in lastmonths issue), showing Enron tradersopenly gloating about manipulatingCalifornias power market, and boast-ing they would bring the state to itsknees. I hope FERC will do its job andreturn the profits that have been takenby Enron Corporation to its victims.That money should be returned to thewestern states that were cheated.


EXECUTIVES AT ROYAL AHOLD UNITARE INDICTED

As we went to the printer with thisissue, the investigations into foodindustry scandals were moving ahead.Recently, four executives of U.S. Food-service were indicted on charges ofinflating the companys earnings bymore than $800 million. An investiga-tion is still ongoing at this time. TheSecurities and Exchange Commissionfiled a separate civil complaint againstthe four executives of U.S. Foodservice.This company is a food distributioncompany that is a unit of the Dutchsupermarket conglomerate RoyalAhold. It accused the executives ofoverstating income by a smalleramount - $700 million - and of forcingmany suppliers to help conceal theirfraud. One of the executives and a sup-plier to U.S. Foodservice were alsocharged with securities fraud and lyingto investigators about a plan to tradeon advance knowledge of the sale ofU.S. Foodservice in April 2000, a $3.5billion transaction. They were alsosued by the SEC on accusations ofinsider trading. Prosecutors and regula-tors announced that they would con-tinue to investigate U.S. Foodservice,the parent company, and its Americansuppliers. A number of companies,including Kraft Foods, General Mills,Tyson Foods, ConAgra Foods, Sara Leeand H. J. Heinz admit to having beencontacted by regulators and prosecu-tors. At press time, it wasnt clear,however, whether these companies aretargets of the probe or merely possessneeded evidence.

The indictments came after a lengthyinvestigation, which started when asupplier complained to its auditorsabout being forced into schemes byU.S. Foodservice. The auditors theninformed government officials. Theinvestigations soon followed. Twoformer officials with the corporationhave now pleaded guilty and areexpected to cooperate with federalinvestigators. Distributors such as U.S.Foodservice typically receive promo-tional rebates from suppliers tied tospecific placement or sales of particularproducts. According to reports, U.S.

Foodservice overstated its earningsfrom 2000 to February 2003 by morethan $800 million by booking revenuefrom promotional rebates that hadnever been earned. As a result of theoverstatement, the executives wereable to personally profit by meetingperformance-based earnings targetsthey would not have qualified for oth-erwise. This case presents anotherexample of how many top executivesin Corporate America believe they haveto lie, cheat and literally steal in orderto continue to make money.

MARTHA STEWARTS FALL

As we all know, Martha Stewart wassentenced to five months in prison, fivemonths probation and fined $3,000 inher criminal case. I must confess that Ihave mixed emotions about theoutcome of this matter and especiallythe prison time assessed. The more Ithink about her case, the more I amconvinced that Martha Stewart reallydoesnt deserve any time in prison.Certainly, she failed to be truthful afterbeing contacted by the Justice Depart-ment during the investigation of herstock-trading episode and that waswrong. It doesnt appear, however, thatshe had actually violated the law onthe insider trading charge. Obviously, itwas a major mistake for her to talkwith prosecutors in the first place, andnot telling the truth was an evengreater mistake. My mama told mewhen I was a small child that it neverpays to lie regardless of the circum-stances. She was rightas usual.Unfortunately for Martha Stewart, herlying in this instance was a criminaloffense.

Martha Stewart appears to have beenguilty of a cover-up and apparentlynothing more. When you compare heroffense with that of hundreds of corpo-rate executives who did much worseand to date have not seen the jailhousedoors lock behind them, you have towonder about the sentencing phase ofher case. I suspect most Americans willnow be watching closely at how KennyBoy Lay comes out in his trial and sen-tencing. In the meanwhile, I am begin-

ning to wonder why Martha Stewartwas targeted in what appears to havebeen a relatively minor offense. Asthey say back where I come from,surely the government had bigger fishto fry!

DRUG MANAGER ACCUSED OF CHEATINGNEW YORK

New York Attorney General EliotSpitzer, who is becoming known asAmericas Attorney General, has fileda lawsuit against Express Scripts, thenations third-largest Pharmacy BenefitManager (PBM), alleging the firmdefrauded the state of up to $100million over five years. Until recently,most Americans had never even heardof a PBM and those who had probablydidnt really know what they did. Nowwe have heard lots about PBMs andhow they will prosper under the newMedicare law. As you probably knowby now, these are firms that negotiateprescription prices for insurers oremployers.

The civil case, filed in a New Yorkstate court, alleges that Express Scriptspocketed millions in rebates from drugcompanies that were meant for thestate, inflated the cost of generic drugs,and sometimes switched patients todrugs that had higher co-payments orresulted in more doctor visits. ExpressScripts handles pharmacy benefits forabout 1 million New York stateemployees, retirees and dependents.Nationwide, the firm handles benefitsfor 52 million people on behalf ofinsurers and employers. The New Yorkcase is the latest in a series of lawsuitsand investigations involving PBMs. Infact, Express Scripts admitted it hadreceived investigative demands fromattorneys general in 19 other states.This is one of the first governmentalenforcement agencies to bring a spe-cific action based on laws that havebeen on the books for years.

Express Scripts is not the only PBMto cheat folks who have to deal withthem. Caremark, the nations second-largest PBM, is also being investigatedby Attorneys General from 19 states. InApril, Medco Health Solutions, thenations largest PBM, agreed to pay


$29.3 million to settle charges from reg-ulators in 20 states that it encourageddoctors to switch patients drugs andsometimes failed to pass along result-ing savings to clients. Express Scriptswas to refund to the state any drugrebates it negotiated with pharmaceuti-cal companies. Instead, it is allegedthat the PBM classified the rebates asadministrative fees or managementfees and wrongfully retained them. Itis also alleged that Express Scriptsaccepted money from drug companiesto switch patients from one brand-name drug to another when the firstwas threatened with lower-cost genericcompetition. Such switches often costpatients more and may have led toadditional doctor visits. Source: USA Today

THE TITAN CORPORATION IS UNDERINVESTIGATION

Public Citizen has called for an inves-tigation into the lobbying records ofthe Titan Corporation, a defense con-tractor, for underreporting its lobbyingexpenses in excess of $1.24 millionfrom 2000 through 2003. In a letter sentto the Secretary of the U.S. Senate andthe Clerk of the U.S. House of Repre-sentatives, Public Citizen asserted thatTitan violated the Lobbying DisclosureAct because the company and its sub-sidiaries failed to report accurate lobby-ing expenses for nearly four years.Section 5 (B) (4) of the Lobbying Dis-closure Act requires organizations toreport not only in-house lobbyingexpenses, but also the expenses theorganization incurs when it retainsoutside entities to represent it beforethe executive and legislative branches.

Since the last half of 2000, whenTitan first registered under the Lobby-ing Disclosure Act, the company hasconsistently failed to include in its lob-bying reports the payments it has madeto outside lobbying firms that repre-sented it on a variety of issues. Some ofthe areas where help was soughtincluded defense, mail safety, trans-portation, homeland security, aviation,government contracting and e-govern-ment initiatives. Clearly, all corpora-tions and their lobbyists should be

required to comply with existinglawsas weak as they areandshouldnt be allowed to ignore them.We badly need to clamp down on lob-byists and their benefactors. This willrequire legislation. Ordinary folks donthave high-paid lobbyists to representtheir interests in Washington or at statecapitols. The rich and powerful do,however, and that is generally notgood for taxpayers.

SCHERING-PLOUGH TO PAY$346 MILLION SETTLEMENT

We reported last month that Scher-ing-Plough Corp. would pay $346million in fines and damages to settlecharges that it overcharged for drugssold through Medicaid. Now that settle-ment has actually happened. The phar-maceutical company will also pleadguilty to a federal criminal charge con-cerning a payment to a managed carecustomer. Federal law requires drugmakers to give their lowest prices toMedicaid, but a group of whistle-blowers accused the company ofgiving some private health careproviders better deals on its drugs byoffering them kickbacks. Federal prose-cutors in Philadelphia began investigat-ing the allegations in 1999 as part of abroad inquiry into pharmaceutical mar-keting practices. The drug company, aspart of the settlement, will pay a crimi-nal fine of $52.5 million and civildamages of $293 million. Some ofthose damages, however, will be offsetby credit the company will receive for$53.6 million in Medicaid rebates that ithas previously paid.

The criminal charge stemmed from a$1.8 million kickback Schering-Ploughoffered to a health maintenance organi-zation that was threatening to dropScherings drug Claritin because of itshigh cost. The company offered to paya false data fee amounting to 2% ofthe annual gross sales of Scheringdrugs to the HMO. The office of theU.S. Attorney for eastern Pennsylvaniabelieves the pursuit of Schering-Ploughwill serve as an example that illegalmarketing practices can be costly.Schering allegedly used terms like datafee and value added as camouflage

for what was nothing more than anold-fashioned kickback. It was a mar-keting strategy that eventually back-fired. The result was that programscreated to provide health care to thepoorest among us were actually payingmore for drugs than those who haveprivate health insurance.

The settlement was first reported onJuly 16th by The New York Times.Federal investigations in Philadelphia,Boston and Washington have resultedin subpoenas to almost every big drugmaker. Bayer has paid $257 million andGlaxoSmithKline has paid $86.7 millionto settle similar allegations. Prosecutorsin Boston and Washington are alsoinvestigating whether Schering-Ploughpaid medical doctors to prescribe itsdrugs, and whether it reported inflatedwholesale prices to the Medicareprogram that led government healthofficials to pay more than necessary forits drugs. Over the last two years, thecompany has set aside $500 million topay fines expected in those cases andthe Philadelphia inquiry.

DRUG COMPANIES DODGE FEDERAL BAN

I am extremely disappointed that thefederal government has failed to use itspower to bar major drug companiesthat commit fraud from doing businesswith federal programs such as Medic-aid and Medicare. We wrote on themassive nature of this problem lastmonth. A 1996 law mandates exclusionfrom federal health care programs forthose who plead guilty to, or are con-victed of, felony health care fraud afterAugust 21, 1996. But since 2001, atleast four major drug companies haveavoided that penalty under settlementswith prosecutors. Consider the follow-ing and decide whether the govern-ment should enforce the ban law.

In July, the government reached a$345 million settlement with Scher-ing-Plough over charges that privateinsurers were charged much lowerprices on Claritin than the govern-ment was. The guilty plea wasentered by an inactive Schering-Plough sales subsidiary with noemployees where the fraud occurred.


Its excluded from federal programs,but the parent companys productsare not.

In May, Pfizers Warner-Lambert divi-sion agreed to $430 million in finesand pleaded guilty to illegally mar-keting the drug Neurontin throughat least August 20, 1996.

TAP Pharmaceuticals in 2001 andBayer in 2003 pleaded guilty toillegal acts that took place beforeAugust 1996, although prosecutorsalso alleged later misconduct.

Obviously, the drug companies havefigured out how to be creative andavoid the federal ban. In my opinion,any corporation that knowingly commitsfraud against the government shouldbe excluded from all federal programs.The exclusion law has largely beenused against direct providers of healthcare, such as doctors and nurses, sinceits adoption in 1977. It was amended in1996. The exclusion penalty may nowbe harder to avoid. Hopefully, that willprove to be true.

V.CAMPAIGNFINANCE REFORM

FUNDRAISING BY THE BUSH ANDKERRY CAMPAIGNS

The Bush and Kerry campaignsraised over $500 million during theprimary season, which is unprece-dented. Both campaigns relied to a sig-nificant extent on the efforts of morethan 1,000 corporate executives,lawyers, lobbyists and wealthy specialinterests who have maximized theirpolitical influence by bundling a largenumber of individual contributions forthe candidate of their choice. A newanalysis by Public Citizen, posted atWhiteHouseForSale.org, offers a side-by-side comparison of the minimumamounts bundled by key industries foreach candidate.

The Web site, created to track con-tributors to the 2004 presidential cam-paigns, features a searchable database

of the major fundraisers for both Bushand Kerry, listing their home states,employers, occupations and industries.The Web site also offers charts showingthe number of fundraisers per state foreach candidate. The states with themost big-money Bush backers areTexas, Florida, New York, Californiaand Ohio. Two-thirds of all of SenatorKerrys bundlers come from California,New York, Massachusetts and Washing-ton, D.C.

Clearly, we must fix the way wefinance elections in this country. Untilthat happens, special interests willkeep ordinary citizens on the sidelinein every election. We cant let that con-tinue to happen. I recommend that allpersons who are interested in cleaningup politics in our country take a lookat this website.

THE NEXT PRESIDENT AND CONGRESS HAVEA DUTY TO CHANGE THINGS

The next President and Congressmust make Campaign Finance Reforma top priority and actually make ithappen. If reform does happen manyof the short-comings of the federalgovernment can then be remedied. Iam convinced that political moneyand powerful lobbyists are the rootcause of many of our current economicand safety problems. A completion ofwhat started last year in Congress mustbe accomplished. There is no questionbut that it will take the full power ofthe White House to make it happen. Itis extremely difficultif not impossi-blefor a public official to take specialinterest money and then push hard toreform a broken system. Our currentsystem of financing political campaignsmust be fixed and soon. As long asKarl Rove is running the White House,there will be no meaningful campaignfinance reform.

VI.CONGRESSIONALUPDATE

NO DEFENSE OF SENATOR SHELBY NEEDED

Senator Richard Shelby has beenaccused of leaking classified informa-tion to the media outlets. Personally, Idont believe Richard Shelby wouldever do anything improper and cer-tainly would never jeopardize his posi-tion in the Senate. I have known theSenator for years, having practiced lawin Tuscaloosa when we were bothyoung lawyers there. I can say withouthesitation or reservation that DickShelby is one of the finest men I haveever known. He is an honorableperson with the highest integrity. I willnever believe that the senior senatorfrom Alabama has done anythingwrong! I know him well enough to betotally convinced that he would nevercompromise classified information. Isuspect some of the folks whodropped the ball prior to 9/11 wouldlike to embarrass the Senator becauseof his post-9/11 criticisms. In anyevent, I dont believe there is anythingto the rumors that have been circu-lated.

PROMPT ACTION ESSENTIAL

As I mentioned in a prior section, Ibelieve that prompt action on the 9/11Commissions recommendations isessential. This is one time for the Presi-dent and legislative leaders from bothparties to declare a moratorium on pol-itics and do what is best for ourcountry and its people. All of the rec-ommendations appear to be neededand should be implemented withoutdelay. This Commission has actedresponsibility and in a non-partisanmanner and has done an outstandingjob for America. The threat of terrorwas largely ignored the detriment ofthe American public. Now we have anopportunity to take action that willmake America safer once again. This isno time for either delay or politicalgrandstanding.


PATIENTS BILL OF RIGHTS BADLY NEEDED

The insurance industry and the HMOindustry have taken over a major rolein the practice of medicine in thiscountry. As a result, we are now seeingbean-counters with no medical trainingmaking medical decisions that shouldbe made by medical doctors. This is amajor reason we badly need a PatientsBill of Rights in this country. With all ofthe abuses in the healthcare system,including fraudulent conduct by manyhealthcare providers, patients in thesystem badly need protection. TheHMOs and insurance companies havepretty well taken over the decision-making in health care provided bymanaged care plans. I sincerely believethis is an issue that should resonatewith the voters in the fall election. Allattempts to pass Patients Bill of Rightslegislation have been beaten down bythe Republican leadership in Congressat the insistence of the powerful HMOsand insurance industries. It is not sur-prising that the President has taken hisusual anti-consumer stance on thisimportant issue.

As you will recall, the issue had beenvery hot in the 2000 presidential elec-tion. People all over the country wereoutraged by the abuses they had suf-fered from the HMOs and insurancecompanies. I thought it might be wellto do a little research on this importantissue. I also figured it would be a goodidea to check out things in the state ofTexas and the fight over the PatientsRights back when George W. Bush wasGovernor. Then-Governor Bush grabbedthis peoples issue in 2000 and ranhard with it. When running for Presi-dent, he touted his record on the issuewhile serving as Governor of Texas.During his presidential run you mayrecall the following ad, which wasaired all over the country by the Bushcampaign: While Washington dead-locked, He (Bush) delivered a PatientsBill of Rights thats a model forAmerica. That was a most effective adand Governor Bush assured the nationrepeatedly that he would fight hard forthe rights of patients against theirHMOs and insurance companies.

It is most revealing when you take a

look at what actually happened inTexas. In fact, a Patients Bill of RightsBill did pass the Texas Legislature. But,Governor Bush vetoed the measure. Amajor campaign funder, who inciden-tally owned the biggest HMO in thecountry, Columbia/HCA, reportedlyconvinced Bush that the bill should bevetoed. Not to be denied, consumeradvocates and consumer-friendly legis-lators passed another version of aPatients Rights Bill. This was accom-plished even though Governor Bushopposed the legislation. The legisla-ture passed what was referred to by thenews media as a veto-proof margin,which meant the margin was too largefor a veto. Even so, Governor Bushrefused to sign it and let the billbecome law without his gubernatorialsignature. That was the Bush record inTexas.

Throughout the 2000 presidentialcampaign, however, Bush claimed tobe on the side of consumers on thisissue and promised, if elected Presi-dent, to fight for a national PatientsBill of Rights. He stated in several cam-paign speeches that Its time for ournation to come together and do whatsright for the people. Four years havepassed and we still dont have aPatients Bill of Rights. The Republicanleadership has successfully kept thelegislation tied up in Congress. Presi-dent Bush has opposed passage ofsuch a law even though polls showthat 4 out of 5 Americans still wantsuch a law. The insurance industry andthe HMOs have the money and influ-ence, and that has gotten the job donefor them thus far. All c

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