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Leftist Shareholders Attack Corporate Free Speech

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Allergan_LogoOn its website, Trinity Health trumpets its shareholder activism. Based in Livonia, Mich., the Catholic health care provider boasts operations in 21 states, which includes 90 hospitals and 120 long-term care facilities. For this last, Trinity should be lauded.

For the first, however, your writer is left shaking his head.

Among Trinity’s list of five shareholder advocacy priorities, two stand out:

• uphold the dignity of the human person.
• enable access to health care.

In other words, issues any reasonable Catholic could get behind. However, Trinity is the lead filer on a proxy resolution that will be voted on next month at the Allergan, Inc., annual shareholders meeting. The cause? Read for yourself:

*RESOLVED*, the stockholders of Allergan request the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2. Payments by Allergan used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3. Allergan’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.

Your writer fails to understand how any of the above reconciles with Trinity’s five priorities listed above, and Trinity’s rationale doesn’t get any less murky:

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Allergan is a member.

Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.

“But,” readers may ask, “why?” For the most part ignoring all five of its own priorities, Trinity’s resolution continues:

*Supporting Statement*: As stockholders, we encourage transparency and accountability in the use of corporate funds to influence legislation and regulation both directly and indirectly. Allergan spent $4.03 million in 2011 and 2012 on direct federal lobbying activities (opensecrets.org). These figures do not include lobbying expenditures to influence legislation in states, where Allergan also lobbies but disclosure is uneven or absent. For example, AbbVie spent $405,685 on lobbying in California in 2013 and 2014 (http://cal-access.ss.ca.gov/). Allergan’s lobbying on tax inversions has attracted media scrutiny (“Pfizer-Allergan Deal May Revive Inversions Fury,” Politico, Oct. 30, 2015).

We commend Allergan for ending its membership in the American Legislative Exchange Council [ALEC] in 2015. However, serious disclosure gaps remain. Allergan lists its membership of the Biotechnology Industry Organization (“BIO”). In 2013 and 2014, BIO spent $16.25 million on lobbying. Allergan is also a member of the Pharmaceutical Research and Manufacturers of America (PhRMA), but does not disclose this. PhRMA spent over $34.5 million on lobbying in 2013 and 2014. Allergan does not fully disclose its trade association memberships, nor payments and the portions used for lobbying on its website. Absent a system of accountability, company assets could be used for objectives contrary to Allergan’s long-term interests.

Let’s see if we can get this straight: Trinity presumes to know what type of lobbying is in Allergan’s best interests, but Allergan may not? Readers are free to hold any opinions they prefer regarding corporate tax inversions, but, ultimately, wouldn’t shareholder value benefit from the, currently at least, completely legal practice?

As for ALEC and the lobbying groups with which Allergan is associated, it shouldn’t be terribly surprising that a pharmaceutical company would want a voice in the political sphere given the medical-industry confusion and turmoil wrought by ObamaCare – unless Trinity Health is onboard with the Affordable Care Act as it stands today, or wishes it legislatively morph into a single-payer system.

Let’s test that hypothesis, shall we? After the June 2015 Supreme Court determination that reinterpreted (called “interpretive jiggery-pokery” by Justice Antonin Scalia) the actual text of the ACA, Trinity Health released the following press statement:

Trinity Health is celebrating today’s decision as a victory for the working people and is thankful for the U.S. Supreme Court’s acknowledgement that “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them.” We believe that a people-centered health system starts with access to high-quality health insurance for all and today’s ruling from SCOTUS supports that access and all the work we have done to start this important transformation of our nation’s health care delivery system. We are glad to be moving forward today as a country making excellent strides toward creating a health care system that works for everyone and puts people at the center.

Ahhhh! Very revealing! Isn’t it funny how Trinity’s resolution calling for more corporate transparency from Allergan doesn’t include transparency of Trinity’s own agenda, which is all-in support of ObamaCare? As well, isn’t it also funny that Trinity is opposed to groups less-than enthusiastic about ACA, including ALEC and other groups once or currently receiving Allergan funds? Except … it’s not funny in the slightest inasmuch it carries more than a faint whiff of hypocrisy. From, it must be remembered, an entity consisting of 90 hospitals and 120 care facilities, and – not coincidentally – a member of the Interfaith Center on Corporate Responsibility as well as frequent collaborator on resolutions filed with As You Sow, both of which are nominally religious but actually progressive shareholder activist groups.

For its part, Allergan’s board of directors unanimously recommends shareholders vote against the Trinity Health resolution next month:

We are committed to participating constructively in the political process and engaging in such participation in full with applicable laws. Allergan recognizes that informed public policy is a critical factor in achieving its goal of pursuing medical advances to help patients live life to their fullest potential. Therefore, the Specified Allergan U.S. Subsidiaries engage in various efforts to advance public policies that support healthcare innovation and improve patient access to needed medical treatments while also recognizing that a fair, free market system provides the best atmosphere for continued innovation. These efforts by the Specified Allergan U.S. Subsidiaries include sponsoring a federal political action committee, contributing to state and local candidates and committees and supporting industry and trade organizations. The policies and procedures we have already put into place are designed to ensure that all lobbying activities conducted by our company and our employees comply with all applicable laws. …

The implementation of the proposal’s additional requirements would result in the unproductive consumption of valuable time and corporate resources tracking insignificant activities without materially enhancing existing disclosures. (p. 58)

To this reader, Allergan’s response seems more concerned with enabling access to health care and upholding human dignity than Trinity’s progressive-themed resolution. It also reflects Allergan’s greater concern for shareholder value than that possessed by Trinity Health.

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Bruce Edward Walker has more than 30 years’ writing and editing experience in a variety of publishing areas, including reference books, newspapers, magazines, media relations and corporate speeches. Much of this material involved research on water rights, land use, alternative-technology vehicles and other environmental issues, but Walker has also written extensively on nonscientific subjects, having produced six titles in Wiley Publishing’s CliffsNotes series, including study guides for "Alice’s Adventures in Wonderland" and "One Flew Over the Cuckoo’s Nest." He has also authored more than 100 critical biographies of authors and musicians for Gale Research's Contemporary Literary Criticism and Contemporary Musicians reference-book series. Most recently, he was managing editor of The Heartland Institute's InfoTech & Telecom News. Prior to that, he was manager of communications for the Mackinac Center's Property Rights Network. He also served from 2006-2007 as editor of Michigan Science, a quarterly Mackinac Center publication. Walker has served as an adjunct professor of literature and academic writing at University of Detroit Mercy. For the past three years, he has authored a weekly column for the mid-Michigan Morning Sun newspaper. Walker holds a bachelor’s degree in English from Michigan State University. He is the father of two daughters and currently lives in Midland, Mich., with his wife Katherine.

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