OPINION: hidden influence-peddling in Washington

Introduction

I was not among those who believed the Supreme Court’s Citizens United decision would open the floodgates of corporate money to influence elections and public policy. While the decision enables corporations to call for the election or defeat of federal candidates, those expenditures have to be reported and few corporations will take the risk of losing customers by getting involved in politics so publicly.

The reality is, the floodgates have been open for years, and the attention focused on Citizens United has actually been helpful to corporations, because it has diverted the public’s attention away from the deceptive yet perfectly legal ways corporations are able to deploy enormous sums of money to advance their political agendas.

The mainstream media, meanwhile, seems to willfully ignore what corporations and other moneyed interests do to get what they want in Washington. That was certainly the case last week after National Journal reporter Chris Frates disclosed how America’s Health Insurance Plans, the insurance industry biggest PR and lobbying group, funneled hundreds of thousands of dollars to a longtime ally with a better reputation to pay for an industry-serving communications campaign. The only media outlets I could find that picked up the story were The Huffington Post, Bloomberg Businessweek and ABC News online.

As Frates’ investigation uncovered, AHIP in 2011 gave the National Federation of Independent Business $850,000 to finance an effort to persuade Congress to repeal a provision of Obamacare that will actually help many uninsured people afford coverage. NFIB is a nonprofit that calls itself the voice of small business but which I know from my days in the insurance industry has often been a voice for my former bosses.

Insurers are delighted that Obamacare will require most Americans to buy coverage from them beginning January 1. That was one of their health care reform goals, along with making sure reform did not include the creation of a public option to compete with private companies. And insurers love the fact that the federal government will be sending them billions of dollars every year to help subsidize the coverage of low-income Americans who would otherwise be unable to afford their premiums.

Knowing that insurers would be getting a windfall in new revenue from all of that, drafters of the Affordable Care Act included a provision that would impose a tax on some policies insurers sell to help finance the expanded coverage that insurers will benefit from. Sounds reasonable, right?

Well, not if you are the CEO of a health insurance company who cares more about meeting Wall Street’s profit expectation than the health care needs of Americans.

But even health insurance executives know they’re not viewed as positively as small business owners. If AHIP spent that $850,000 in a way that could easily be traced to the insurance industry, the campaign to get the tax repealed would be considered — rightly — as self-serving. So AHIP needed a trusted partner with a better reputation to try to get the job done, and the NFIB was more than willing to sign on and take the money.

Exactly how the NFIB spent insurers’ money will likely never be known, but there is a good chance most of it went to set up and finance the operations of an outfit called the Stop the HIT Coalition. (HIT stands for Health Insurance Tax.) That’s the group that is fronting for the industry to get the tax repealed.

The NFIB, one of the organzations that challenged the constitutionality of the Affordable Care Act, undoubtedly was willing to partner with AHIP because insurers say they will pass the tax along to their small business customers instead of absorbing it as a cost of doing business or as goodwill from getting the additional business guaranteed by Obamacare. Rather than push back against the insurers, the NFIB clearly saw this as a new reason to attack and weaken the law.

Frates discovered this back channeling of money by looking at tax returns filed by both AHIP and the NFIB. It turns out the $850,000 from AHIP was the second largest contribution the NFIB received in 2011. To put that into context, the NFIB offers small business memberships for $180, so AHIP’s money (which comes from premiums insurers charge their customers), was equivalent to 4,722 small business memberships.

Other than the reporters at the Center for Public Integrity, Frates — who last year broke the story that AHIP funneled more than $100 million to the U.S. Chamber of Commerce in 2009 and 2010 to pay for an anti-reform advertising campaign — is one of the few Washington reporters investigating how corporations and trade associations hide the money they spend to influence Congress. As a result of this lack of media interest, Americans remain in the dark about how big special interests are able to control what happens in the nation’s capital. And Citizens United has nothing to do with it.