The Business of Campaign Contributions
by Wendell Potter
December 17, 2020
Wendell | I’m a former health insurance company executive. I spent almost 20 years working at a senior level position at two different health insurance companies, Humana and Cigna. At Cigna, I led the corporate communications function within the division of legal and public affairs. I was the company spokesman. I handled financial communications to the media. I was also involved with lobbying issues and public affairs specifically in regards to healthcare reform. I worked with my peers across the industry and with trade groups to develop strategic communications plans to defeat reform, whenever reform was being proposed, either at a state or local level.
I left my job in 2008 after a crisis of conscience.
I just came to understand that the role I was playing was perpetuating a very broken healthcare system. I ultimately became a very vocal critic of the insurance industry. I wrote a book that looked closely at the role of the insurance industry in our healthcare system, and how they and other special interests use money to shape public opinion. I knew very well that big corporations spend enormous sums of money to influence elections and public policy directly through campaign contributions and lobbying.
One of my team’s responsibilities at Cigna was to manage the Political Action Committee giving, so I was obviously very familiar with how the company used PAC money as a means to influence public policy. I've been known more as a healthcare reform advocate, but most healthcare reform advocates don't really appreciate how much their efforts are thwarted by money in politics. That was a major reason for teaming up with Nick Penniman to write Nation on the Take, to help people understand how money is used to protect a very profitable status quo – regardless of what the industry is.
When we talk about money in politics, it's all sort of vague. Can you walk us through the tactical decisions inside of a corporation? How do you make decisions about who to give money to and how to spend it?
We look at candidates. If they're incumbents, we look at what positions they have on committees, and how influential they are in leadership positions. A lot of the campaign contributions go to committee chairs, or ranking members of committees that would be of interest to the health insurance companies.
You look at both sides of the political aisle. In fact, sometimes you'll see that the giving is more generous to Democrats than Republicans, and some years it's just the opposite. You also take into consideration the way the political winds seem to be blowing, and which party is likely to be in leadership after the next election cycle.
You look at members voting records and try to determine which ones are most likely to be amenable to what you have to say, and to vote the way you want them to.
Lobbyists will give advice on who, based on their encounters with staff, they think is likely to be there when you need them.
That’s happening at a state level as well, which doesn't get nearly as much attention or scrutiny. The political action committee at any big company with a significant presence in the States will also have a pretty big state government affairs operation as well. We work very closely with our lobbyists to get their feedback as to which candidates or members are likely to be more receptive to hearing us if they get a campaign contribution.
Would you say money spent is less about picking a candidate and helping them win than it is about garnering favor with those who are in power or who are likely to be in power?
It is exactly that. You want to try to help candidates who have a good chance of winning or being reelected. That's where your money goes. If you look at the campaign finance reports from political action committees, most of the money does go to incumbents or to races where there is not an incumbent running for reelection. It is not too often that you see money go to an opponent of an incumbent.
Interesting. What do those conversations look like?
The conversations tend to be pretty vague, to be honest with you. But, you can get a pretty good sense of what someone's ideology is and when someone is going to be receptive to what you have to say on matters of legislation.
The money goes mostly to moderates in Congress, on both sides of the aisle. These are the ones who are most receptive to hearing from big business.
For the most part, you veer away from candidates and elections who are perceived to be far left. But, generally, you can get a good sense of someone's ideology just from working with staff, and by being aware of what they say during committee hearings.
Corporate spending on campaigns is protected because it was argued that hindering corporate spending, would hinder free speech. Do you think that is true?
They do have the right to express their point of view, but the way it has grown, corporation's voices are inordinately more influential than an average constituent.
Money should not equal free speech, in my opinion. I think that is a bogus argument.
Were you working for the health insurance companies during the Citizens United case?
I was there as it was working its way through the courts. I left the industry before the Supreme Court upheld the law. We weren't paying a ton of attention to it, because we didn't really need it to be honest. The industry has so many different ways of spending money. An enormous amount of money is spent in ways that really are not reported or traced all that well.
And what are some of those ways?
It comes down to influencing public opinion. I worked with my peers, big PR firms, and trade associations to develop front groups. Front groups are where insurance companies, hospital chains, medical device manufacturers, come together to dump money into a group that can sway public opinion. These actors might not see eye to eye on every element of a piece of legislation, but they share just one thing in common: the concern that reforms might have some detrimental effect on profits. And they know that if they pool their resources, they have a greater chance of just making sure the legislation never passes in the first place. There is a lot of history that shows that that is exactly what happens.
My first effort to defeat reform was in the early 90s, when the Clintons were in the White House trying to push forward healthcare reform legislation, and we were successful. A huge part of that came from lobbying; enormous sums of money go into lobbying. Cigna alone has contracts with several different lobbying companies, not only in Washington, but around the country in state capitals. An untold amount of money also goes into PR firms to pay for propaganda operations that influence public opinion. And a lot of money goes to influence lawmakers through Washington based media; much of the advertising is never seen by regular voters, but seen by staffers, members of Congress, and those who are in the administration.
You mentioned earlier that you didn't really need Citizens United, exactly because of the two channels you just mentioned: lobbying and public opinion campaigns. It does seem, however, that Citizens United has become a linchpin for cries about money in politics. Do you think that is warranted? Or is there a different perspective we should be taking?
I think that's a very big thing. We have seen that corporations and corporate entities have and special interests have just unleashed torrent of funding. I think that it is absolutely right to focus on it.
But, before that decision, businesses have had a powerful voice for a long time. There is a lot that needs to change. I am no fan of Citizens United, and I believe it needs to go away. but I also think we need to look at other reforms. We need to have reforms that address the revolving door, or reforms like the matching system in New York that can increase the power and influence of individual donors.
The matching programs can add up to be a significant amount of money that goes into campaigns. Candidates are not as likely to need to spend time with big donors. Candidates, typically, spend a lot of their time calling up people they know who are able to write significant campaign checks. You are calling people who have influence, who already have power and money.
We've focused a lot on the health insurance industry, but I know that you went through a series of other issues of how money influences your book. Were there any other findings that were particularly striking to you?
We did look at a number of industries because we didn't want this to be just healthcare focused. But almost all of the industries, even if they aren't healthcare companies, in one way or another affect the health and wellbeing of Americans. We looked at the food and beverage industry, fossil fuel companies, pharmaceutical companies, and the chemical industry.
When you look at the practices that companies put in place by influencing policy, legislation, and regulation, it all ultimately has an effect on our health.
Do you think that there is an alternate reality or a different singular public will that would come about if these interests were no longer there?
I think absolutely that would be the case. They will try to use money in one way or another to get what they want, and what they want at the end of the day is to enhance shareholder value. They want to make money. They want to keep Wall Street happy, because most of who we are talking about are publicly traded companies. That's their number one objective.
Even if you were to increase the restrictions from what we have now, they would still find ways to try to shape policy and public opinion. We see that all the time. It doesn't mean that we shouldn't have efforts to get us to a better system. Reforms are important and worthy. There needs to be more transparency, and more scrutiny.
But, I doubt that we would ever be able to place any restrictions on an insurance company or any other big company from hiring a big PR firm to influence public opinion. They will continue to have sway over public opinion, but people should have visibility into how that money is being spent. Americans should be able to see how much Cigna is spending to hire a big PR firm or to support a front group. We don't have that.
While we probably can't ever end big money spending, Americans should at least have more visibility into how their money is being spent.
Because it is our money, whether you're buying health insurance or medications or food to put on the table, it's money that comes from us.