Katie Hill, Bye-Bye

PVIs are backward looking and are rarely up to date. Take CA-25, the district represented by Katie Hill, Officially the PVI is "even" but the Santa Clarita Valley-Antelope Valley-Simi Valley district is way bluer than that would indicate. Obama won it narrowly against McCain and then lost it narrowly against Romney. Hillary beat Trump convincingly-- 50.3% to 43.6%. Blue America has been working to flip this district for well over a decade. We started when powerful GOP crook-- now lobbyist-- Buck McKeon was congressman there. He had to go but the district was much redder then, R+7 in 2006. It was a mammoth district-- biggest in California-- that did not include Simi Valley but instead crawled up the California border with Nevada, nearly as far north as Sacramento.

We jumped in to support Roberto Rodriguez, a recent Harvard graduate who hailed from a working class family in Barstow (no longer part of the district). At the time, McKeon was chair of the Education and Workforce Committee and under his stewardship-- and while he raked in over a quarter million dollars from student loan vendors, more than anyone else in Congress-- federal student loan programs were cut by $12.7 billion (the worst cuts in history) and student loan rates went up by 2.4%. Pure sleaze... but not the kind you go to prison for. Getting rid of McKeon would be up to the voters-- and the young and under-funded Rodriguez, who was running a very grassroots campaign concentrating on registering the district's Latino non-voters. McKeon spent $1,370,664 and Rodriguez spent $200,516. The only outside spending in the race was from Blue America ($5,000) and the National Education Association ($3,412) in favor of Rodriquez. The DCCC ignored the race entirely as if CA-25 didn't exist. McKeon beat Rodriguez 61-35%. The district was slowly, demographically, getting bluer but in 2008 and 2010, a vanity candidate went up against McKeon-- whose 61% backing didn't budge. In 2012 it was time to get serious about the district again.

Lee Rogers ran a strong, animated campaign, forcing McKeon to spend $1,769,400 (Rogers spent $360,091). He brought McKeon's win number down to 55% and did significantly better than any Democrat ever had in the district. The DCCC didn't care and studiously ignored the race. Blue America was the only group that spent in the district-- $39,810. McKeon heard the bell tolling and decided to retire. A glitch in the ballot left 2014 with two Republicans, mainstream conservative Tony Strickland and far right neo-Nazi Steve Knight. Though outspent $2,057,642 to $410,835, the neo-Nazi won. The district's Republicans are pretty extreme.

In 2016, the Democratic candidate was a wealthy carpetbagger, a garden variety Democrat-- Bryan Cafario with nothing to recommend him at all except that he wasn't a Republican. He managed to spend the same $1.6 million as Knight but it still came down to 54.2% (Republican) to 45.8% (Democrat). This time though, the DCCC was satisfied that Caforio was their kind of nothing-candidate who wouldn't make waves and they put $3,164,363 into the race, while Pelosi's House Majority PAC spent $242,487.

Now CA-25 was on the national radar. Katie Hill (now 32 years old) jumped into the race and first beat Caforio, massively outraised the hapless neo-Nazi, $7,156,033 to $829,932 and beat him 133,209 (54.4%) to 111,813 (45.6%), despite Paul Ryan's Congressional Leadership Fund spending $8,022,525 on Knight's behalf. (The DCCC and Pelosi's super PAC spent about $3.5 million combined, but Independence USA came in with over $5 million to combat Ryan's $8 million). In the end 61 outside groups spent independently on Hill's race! The Democrats had a slight registration advantage over the GOP and independents were eager to show their disdain for Trump. So Hill won.

Blue America was the first group to endorse her, an endorsement we quickly rescinded. A mutual friend introduced me to her over dinner a month or so before she began her campaign. I loved her energy and wanted to hear something that wasn't really there-- namely that she is a progressive. She didn't have to try too hard to convince me. But once the campaign got started in earnest I slowly began realizing that she duped me (and that I had been eager to be duped). The final straw was when she vowed to me that she would not become a New Dem and then turned around and joined the New Dems. That was blatant dishonesty-- a bad trait in any member of Congress. We quietly withdraw our endorsement.

In Congress, Katie was elected one of the co-presidents of the freshman class and she demonstrated a lot of energy and was seen as a comer. Pelosi sensed she was a leader and started inviting her to caucus leadership meetings. A New Dem, she quickly started running up a crappy voting record. ProgressivePunch has her rated as an "F" and her crucial vote score is 73.33, in the neighborhood of the other non-courageous California freshmen nervous about losing their jobs. Mike Levin's district is slightly redder (R+1) but his voting record is considerably better-- "B" with a 84.44 crucial vote score. Still, Katie is voting somewhat better than fellow New Dem freshmen Gil Cisernos (71.11), Harley Rouda (68.89) and Josh Harder (63.64).

A couple of weeks ago I read the Red State post about the scandal and realized she was a goner. It isn't something I ever wrote about and even refused to discuss it on David Feldman's radio show when he kept asking me about it. There was no need for me to help push her off the cliff she was heading right for. I did begin feeling out potential candidates for the seat though-- something I'm still working on.

Since Hill's resignation announcement (above) late Sunday, Washington Post reporters Meagan Flynn and Michelle Ye He Lee, in separate articles, presented her story-- or the seamy side of it-- without any political context. Sunday night Lee broke the story for Post readers. "Last week, the House Ethics Committee opened an investigation into allegations that Hill was romantically involved with her legislative director, Graham Kelly, a relationship that would violate House ethics rules... Her departure came swiftly after allegations surfaced about a week ago in an article on the conservative website RedState.org. The article alleged that Hill and her husband were in a consensual three-person relationship with a woman on her campaign team. The article included text messages it said were between Hill and the woman as well as intimate photos of them together. Hill is openly bisexual. The article also alleged that Hill was involved romantically with Kelly. Under House ethics rules adopted last year in response to high-profile sexual harassment claims involving members of Congress, it is against the official code of conduct for members to 'engage in a sexual relationship with any employee' who works for the member."

Presumably it was Pelosi who made the call that Hill had to resign (rather than retire and just not run for reelection), a strategy that will make it easier for a Democrat to hold the seat. Pelosi announced that Hill "acknowledged errors in judgment that made her continued service as a Member untenable. We must ensure a climate of integrity and dignity in the Congress, and in all workplaces."




Hill's claim that she did not have a romantic relationship with Kelly-- the only thing that would have broken any House rules-- is sketchy. She said "Allegations that I have been involved in a relationship with Mr. Kelly are absolutely false. I am saddened that the deeply personal matter of my divorce has been brought into public view and the vindictive claims of my ex have now involved the lives and reputations of unrelated parties." Since I know from personal experience that she's a liar, I wouldn't believe the denial for two seconds. Lee added that "In her statement Sunday, she said she is pursuing legal options against those who released private photos, saying that 'having private photos of personal moments weaponized against me has been an appalling invasion of my privacy.' ... Hill has accused Republican operatives and her husband of coordinating a 'smear campaign' amid the couple’s pending divorce."

Monday morning, Meagan Flynn built on Lee's story. "For the first time," she wrote, "a House ethics rule that forbids sexual relationships with subordinates, passed in the wake of the #MeToo movement, has forced a lawmaker out of Congress. But to many observers, rather than drive home a warning about the consequences of sexual misconduct, Rep. Katie Hill’s resignation pointed to the disturbing power of 'revenge porn.' The California Democrat’s announcement Sunday that she would resign comes after the House Ethics Committee opened an investigation into allegations that she had a romantic relationship with her legislative director, which would violate House ethics rules, and which Hill denied. Hill was also accused of having a three-person sexual relationship with a female campaign staffer and her now-estranged husband, which she admitted was improper. But the allegations only came to light after a conservative news site and British tabloid published nude images of Hill without her consent-- circumstances that have led many critics to note that Hill is both accused of sexual impropriety and is a victim of sexual exploitation."

Hill herself has acknowledged both aspects of her case, previously saying she knew “even a consensual relationship with a subordinate is inappropriate,” while vowing Sunday to mount a legal fight regarding the leak of intimate photos. She has accused her “abusive husband,” with whom she is undergoing a contentious divorce, of engaging in a “smear campaign built around cyber exploitation,” saying he enlisted “hateful political operatives” for help. The nude photos were published by the conservative site RedState.org and the Daily Mail.

“Having private photos of personal moments weaponized against me has been an appalling invasion of my privacy,” she said Sunday. “It’s also illegal, and we are currently pursuing all of our available legal options.”

But fewer lawmakers have outwardly addressed the problem of revenge porn, or nonconsensual pornography. Rep. Matt Gaetz (R-FL) was a notable exception. Last week, Gaetz called the House ethics investigation “absurd,” questioning, “Who among us would look perfect if every ex leaked every photo/text?” He suggested the real reason Hill was being investigated “is because she is different.” Hill is also one of the first openly bisexual members of Congress.

Jill Filipovic, an attorney who authored the 2017 book The H-Spot: The Feminist Pursuit of Happiness, pointed out that the dominant focus in Hill’s case appeared to be on the alleged affairs rather than on the revenge porn, which she argued could deter other women from aspiring to public office.

“It’s important to have consistent standards and say that sexual relationships with underlings are not appropriate, whether the boss is male or female,” she wrote in a Medium essay last week. “But if we care about gender equality and the ability for women to fully participate in the public sphere, the sexualized attacks against Hill are the most pressing matter.”

Other critics noted that Rep. Duncan D. Hunter (R-CA) was accused by federal prosecutors in June of using taxpayer money to fund extramarital affairs with congressional staffers and lobbyists. The House Ethics Committee launched an investigation into Hunter’s conduct in September 2018, after he was originally indicted on charges of wire fraud and misuse of campaign funds. But despite pressure to resign from some lawmakers, Hunter has remained in Congress. Hunter has denied wrongdoing, and as The Post reported previously, the ethics panel has deferred taking action as federal prosecutors conclude their own probe.

The House rule that prompted the ethics panel to launch an investigation into Hill’s alleged relationship with congressional staffer Graham Kelly was passed in February 2018, during the peak of the #MeToo movement fallout. For the first time in Congress, the House resolution addressed the improper power dynamics of consensual relationships between members of Congress and their employees by banning any such relationship, while further protecting accusers who come forward with sexual harassment claims.

At the time the law passed, nine members of Congress had recently resigned or announced their looming departure amid allegations of sexual misconduct or related impropriety-- including one case that also involved leaked nude photos.

Former Texas congressman Joe Barton announced he would not seek reelection in 2018 after a nude photo of him circulated on Twitter and across the Internet, leading to revelations that the Republican, who was then married but separated from his wife, was having affairs with multiple women. In a November 2017 statement, Barton apologized for not using “better judgment,” saying he let down his constituents while acknowledging consensual sexual relationships he had had with other women.

A recording of a phone call Barton had with one woman, obtained by the Washington Post, revealed him telling the woman not to disseminate the explicit photos or else he would report her to the Capitol Police. Some argued Barton was a victim of revenge porn, while others questioned whether the nude photo he had sent was unsolicited.

But one notable difference between the Barton case and Hill’s is the fact that right-wing publications chose to release the photos, especially since they depicted “a politician of the opposing party,” Quinta Jurecic, managing editor of Lawfare, a legal blog, wrote in an op-ed.

“This is an ugly line to have crossed,” she wrote, adding: “The United States has not historically had a culture in which political media outlets publish nude photographs of opposition politicians for sport. It’s also a disappointing irony that this is taking place in a period in which legislatures are increasingly recognizing the harm of nonconsensual pornography.”

According to the Cyber Civil Rights Institute, 46 states and the District of Columbia have revenge porn laws-- and California, Hill’s home state, is among them. Reps. Jackie Speier (D-CA) and John Katko (R-NY) also reintroduced bipartisan legislation in May that would federally criminalize sharing sexually explicit images of someone without that person’s consent. Sen. Kamala D. Harris (D-CA), a Democratic presidential candidate, has introduced companion legislation in the Senate.

Mary Anne Franks, a professor at the University of Miami School of Law who assisted in drafting the first law against nonconsensual pornography, urged the passage of the bill, known as the SHIELD Act, and spoke out in support of Hill on Twitter.

“One of the many terrible effects of nonconsensual pornography is how it can be used to drive women out of politics,” she wrote. “As we at [Cyber Civil Rights Institute] have been emphasizing for years, ‘revenge porn’ very often serves as a tool of abusive partners and a means to silence women.”

Names being bandied about on the Democratic side are Secretary of State Alex Padilla (who represented the 20th Senate district east of CA-25), Assemblywoman Christie Smith (who made it official already! and appears to be the DCCC fave), Bryan Caforio and Lee Rogers (the most progressive name out there). On the Republican side there are over a dozen either in or talking about it-- from Russia-Gate jailbird George Papadopoulous to ex-L.A. County Supervisor Mike Antonovich, probably the strongest potential GOP candidate. Lancaster City Councillor Angela Underwood-Jacobs has already announced, as has Mike Garcia, who the NRCC was supporting when he was viewed as a sacrificial lamb. Now they will dump him as fast as they can find someone more electable. Steve Knight has told friends he's going to probably run.

No More Republican Members Of Congress From Los Angeles? Time Has Come Today-- Guest Post By Lee Rogers, Part II

Yesterday Dr. Lee Rogers took a look at the crucial congressional race in CA-25 for us. This is Part II. I suggest you take a look at Part I if you missed it while observing Memorial Day.

"This is Bryan. Don’t be like Bryan." Caforio Threatens CA-25 Democrats' Chances in November
by Dr. Lee Rogers

In California’s 25th District, one Democratic candidate is foolishly fueling an uprising against himself, which will limit any chance he has of winning in November, should he clear the primary. Bryan Caforio’s campaign has engaged an unprecedented negative campaign against a fellow Democrat, Katie Hill.

Now, the nascent, but growing #LyinBryan and #NeverCaforio movements threaten to undermine a general election campaign against incumbent Representative Steve Knight, who already bested him in 2016 by 6%, even though Hillary Clinton beat President Trump by 7%. Knight’s claims that Caforio was a carpet-bagging Beverly Hills attorney were particularly damaging and progressives were already leery of Caforio’s negative campaign against fellow Democrat Lou Vince and his history representing big corporations, millionaires, and an oil company against a group of Montanans.

Caforio’s recent despicable behavior caused me to produce a 2 minute video opposing his intraparty “slash and burn” campaign, pointing out his lies which include mail pieces accusing Hill of giving bed bugs to the homeless people she helped as Executive Director of People Assisting the Homeless (PATH). Caforio inaccurately likens Hill to Donald Trump, when in reality, running a lying, negative campaign is the closest you can get to being Trumpian.



Another contender is Democrat Jess Phoenix, a volcanologist (with an “o”, not “u”), who has performed well in the debates, by many accounts even better than all the other candidates. She is very knowledgeable and impressive, but now, at the final hour of the primary, she has not raised enough money or momentum to beat Caforio and threatens to split the Hill Democratic vote, risking Caforio advancing and dooming Democrats in November. If Phoenix runs again in the future, the organization she’s built in 2018 will certainly help her be a formidable candidate from the start.

I think Democrats have a real chance to turn CA-25 blue in 2018, but only if they choose the right candidate, Katie Hill, and reject Bryan Caforio’s negative, lying campaign.

Winning One Of The Last Republican Held Seats In Los Angeles-- A Two-Part Guest Post By Lee Rogers

Anyone who has followed this blog for the past half dozen years knows Dr. Lee Rogers, primarily because he ran for Congress in CA-25 twice. The heart of the district is Santa Clarita but spreads south to Porter Ranch, west into Simi Valley, north as far as Gorman and east to Palmdale and up to Lancaster in the Antelope Valley. Lee challenged powerful (and corrupt) Republican Buck McKeon in 2012 and 2014, In 2012 he scared McKeon with a much closer race than he was used to, 129,593 (54.8%) to 106,982 (45.2%). McKeon decided to retire. In 2014, Lee was one of the first victims of the new jungle primary, when two Republicans prevailed in the first round and no Democrat made it to the general election. Today he is a prominent, internationally-known speaker and author on health policy. This week he endorsed Katie Hill for the CA-25 election.

Democrats' Chance to Flip CA-25 Rests with Katie Hill, Part I
by Dr. Lee Rogers

The outlook to flip California’s 25th District has never looked better. But that outlook is dimming with the prospect of a Bryan Caforio win over Katie Hill in California’s top two primary. Caforio lost to incumbent Republican Steve Knight in 2016. Caforio, who is attempting to run as a progressive, is dogged by his work as a lawyer representing big corporations, millionaires, and an oil company against citizens claiming seeping petroleum polluted their land.

Katie Hill, who is from the district and work includes being the executive director of the nonprofit PATH (People Assisting The Homeless), has worked to pass measures in LA area to reduce homelessness.

“In the Business of Helping People”



A political-newcomer, Hill has even out-raised Caforio $1.1M to $1M for the primary election cycle. Even more astonishing is what trusted political analysts are saying about Hill and CA-25.

The Cook Political Report has CA-25 as a toss up and cautions Democrats could nominate the “wrong” candidate.

CA-25: Steve Knight (R)-- Northern LA County: Santa Clarita, Palmdale

Toss Up. Democrats don't face any risk of a primary lockout here, but they do run the risk of nominating the "wrong" candidate. Knight faces four Democrats on the June ballot, but the race for the second runoff slot is between non-profit executive Katie Hill and 2016 nominee Bryan Caforio. The "Beverly Hills trial lawyer" label doomed Caforio in 2016, and a Caforio nomination could help Knight survive in a district Hillary Clinton carried by seven points.

Hill, 31, grew up in the district (unlike Caforio) and has run one of the largest anti-homelessness non-profits in the state. She owns guns and horses and culturally fits this parochial seat. Her first ad features her narrating her pitch while mountain climbing. She would offer a stark generational contrast to Knight, who has a tendency to shoot from the lip. And with the help of EMILY's List and LGBT groups, she's outraised Caforio $1 million to $883,000.

But despite her general election appeal, Hill isn't a sure bet to advance to November. Caforio is running as the "true progressive," retains plenty of name ID from his last race and is fond of replaying an old endorsement video President Obama cut for him in 2016. Meanwhile, Hill risks splitting women's votes with two minor Democrats on the ballot, volcano scientist Jess Phoenix and former Oak Park school board member Mary Pallant.

If Hill advances, Knight would probably become the underdog. If Caforio advances, Knight would still have a chance of keeping this seat in the GOP's column.”

Local Democrats have a real chance to add to a Democratic majority and rebuke Donald Trump’s policies in Washington, but only if they choose the right opponent to Representative Steve Knight.

Katie Hill’s platform of Universal Healthcare, Rebuilding the American Dream, and having an accountable, representative Government resonates with people in the district and is strengthened by the fact that her message is delivered by such a credible person.

The Crazy Republican Party War Against Health Care

Yesterday CNN interviewed John Kasich, who was in Munich for a security conference. Among other things, they asked him about Paul Ryan's and the House Republicans' plans to take away health care from millions of Americans by "phasing out" the Medicaid expansion under the Affordable Care Act. You can listen to Kasich's response in the short video above. In short, he's appalled. "That is a very, very bad idea," he said, "because we cannot turn our back on the most vulnerable." But that's exactly what Ryan's plan, timidly and partially presented last Thursday, does, by forcing the already hard-pressed states to pay more of what the feds were paying towards the health costs. 31 states-- where most Americans live-- would be impacted by the GOP power play. Ryan's plan pits the extremist Republican House against more mainstream Republican senators and governors.

The plan was sent to Republican House members to take home to study it over the break-- and several of them, for a variety of reasons, promptly leaked it to the press. The far right is fuming because they oppose the tax credits that aren't offset in the budget and more mainstream Republicans are unhappy because it will leave poor people out in the cold. The new plan also repeals the mandate, which, according to the Congressional Budget Office, would almost immediately raise insurance premiums by around 20%, something most Republican congressmen don't want to see happen before the 2018 midterm elections, when increases like that would likely cost the GOP at least 35 seats-- and control of the House.

On Saturday, The Atlantic's Vann Newkirk took a stab at explaining what the House Republican leadership is doing. Remember the vast majority of Medicaid recipients are either disabled or low-income seniors, many with serious (i.e., expensive) health care needs. Those costs have been split between the states and the feds. Ryan (and Trump's new Secretary of Health, Tom Price) want to change that now, not just in regard to their Obamacare obsession but also as a as a way to destroy Medicaid entirely. "The plan," he wrote, "is short on specifics, including the mechanics of its implementation, and looks like a watered-down combination of some existing Republican repeal plans, including Ryan’s and Price’s. It would repeal Obamacare’s taxes and mandates, and replace the tax subsidies for purchasing insurance on the exchanges with tax credits and incentives for health-savings accounts. The details of those tax credits are not provided, save that they would be age-rated and refundable but not adjusted by income."

The proposal appears "likely to sharply reduce the number of people covered, since it rolls back funding for the Medicaid expansion, ends subsidies, and eliminates the mandate to purchase insurance. Their tax-credit policy would invert Obamacare’s progressive financing scheme. Under current law, subsidies increase as income decreases, but the Republican plan would flatten that tax advantage, thus no longer proportionally increasing affordability for low-income people. It would age-rate the credits, granting more affordable coverage to older people, who tend to be sicker than younger Americans, but would not control for costs among poorer individuals, who also tend to be sicker and more prone to disability than their middle- and upper-class counterparts."



And it establishes "a per capita cap on federal Medicaid funding for individuals based on state economic and health factors, as well as the category of beneficiary (whether they are aged, blind and disabled, children, or otherwise able adults). That reform erases the open-ended funding of Medicaid and essentially replaces it with a set annual allotment of federal funds to each state. The brief would allow states to receive that funding as a block grant, provided that they 'transition' people covered under the Obamacare Medicaid expansion to other programs. That block grant appears to come with rather significant relaxation on states’ requirements to meet eligibility standards and provide comprehensive services for Medicaid enrollees."

The per capita cap and block-granting scheme would certainly save the federal government money. The main appeal of universal spending caps is not only that they promote thrift among states, but that pegging them to economic factors, at the start of a prescribed “base year,” basically underfunds them in the future. But this scheme might also work against the ability of Medicaid to effectively cover people. A report from the Kaiser Family Foundation shows that such a policy could “lock in” funding to states based on their position in the base year, and would create long-term “winners” and “losers” in states. States would no longer be able to react in real time to crises like drug epidemics, disasters, or job crunches, and funding would not respond to demographic changes. In essence, people might be blocked from receiving care simply based on where they live. That this problem recreates the geographic incoherence of the current Obamacare Medicaid expansion-- where people covered under the expansion in some states will lose coverage if they move to non-expansion states-- is no small irony.

The logic behind block grants and per capita caps on federal funding is that they force states to be efficient with Medicaid dollars since they’re on the hook after that money is gone. But there are no guarantees that states wouldn’t simply create that “efficiency” by dropping people from coverage, diminishing the services covered, or reducing payments to providers. In fact, the House plan appears to encourage just that, as it only specifies coverage of mandatory services for disabled and elderly people in its requirements for block grants. The ensuing system, then, would no longer be a safety-net entitlement for all people who need care, but one where many of the riskiest patients with the most pressing issues might simply be forced to do without. That’s a strong departure from the underlying logic of the program, outlined when President Lyndon Johnson railed against “the injustice which denies the miracle of healing to the old and to the poor” when he signed the amendment to the Social Security Act, which gave the country Medicare and Medicaid in 1965.

DWT has heard that Lee Rogers, the progressive doctor who previously ran for Congress in Los Angeles, is being recruited by district supporters to run again in 2018. And we think thats good news because Dr. Rogers knows how to give Republicans a taste of their own bad medicine. Dr. Rogers offered the following diagnosis and prescription on Paul Ryan's plan:

"Republicans are fixated on their belief the healthcare is a privilege. But they use confusing language to hide this unpopular fact. They state that they want everyone to have 'access to healthcare.' We all know that having access to care is in not the same as having care. As Senator Bernie Sanders pointed out, you currently have access to one of Donald Trump's mansions, but without 5 million dollars, you can't afford it. I believe healthcare is a right. There is nothing more precious than your life. Medicaid expansion has helped low-income patients get the care they need and it has also been an economic stimulant for the states. We can't put greedy insurance companies and the pharmaceutical industry back in charge of healthcare."

Hopefully demonstrators at Ryan's house Wednesday will remind the rogue-Catholic of this

Mylan Didn’t Lower EpiPen Prices After All; They Just Appeared To

Senator Joe Manchin's daughter Heather Bresch, CEO of Mylan, and some of the work she's been doing. Note — the EpiPen price is actually around $640 at most pharmacies (source).

by Gaius Publius

These days have seen a number of stories about the Mylan EpiPen scandal, the essence of which is captured in the graphic at the top (note, though, that the graphic understates the EpiPen price; it's now around $640). Heather Bresch, Mylan's CEO, decided to increase corporate profit by increasing the price of a mature product, EpiPen, a device that delivers life-saving epinephrine to people who suffer life-threatening anaphylactic shock from allergic exposure to, for example, bee stings and peanuts. In the view of most observers, she did it simply because she could.

There's no economic reason for the price increases, any of them. Epinephrine (basically adrenalin) is not proprietary. As Dr. Lee Rogers notes in the first link below, "As a hormone, it's a product of nature and cannot be patented." And the delivery mechanism (the "pen") has been around since 1977. All of the R&D is done, and the medicine is cheap. All told, each EpiPen contains just one dollar worth of medicine. (And it seems the original EpiPen was at least partly developed with taxpayer money.)

Yet under Heather Bresch, Mylan has steadily raised the price from about $50, its price when Mylan acquired the 50-year-old product, to more than $600 — because they could. In 2009, the year Bresch became president, the price of the EpiPen was increased 19%, followed by 10% hikes each year from 2010 through 2013. Then:

After successfully pushing for legislation requiring all public schools to carry emergency epinephrine [devices], Mylan jacked up the price by 15 percent every other quarter from the end of 2013 to the second quarter of 2016 [emphasis mine].

And that's how the game is played.

A Shakedown Scheme with a Sidecar of Murder

As I noted here, this is basically a shakedown scheme with a sidecar of murder — "Got a peanut allergy? Pay my new price or the kid dies." In the meantime, corporate profit went through the roof, as did CEO compensation, as the graphic shows.

Dr. Lee Rogers, a medical doctor and a former progressive House candidate, broke the story here:

U.S. Senator Joe Manchin’s Daughter-- the Next Martin Shkreli

and DWT issued a follow-up story here:

Why Do We Pay The Highest Prices For Drugs In The World?

Two side wrinkles and you're up to date:

First, CEO Bresch may have engaged in insider trading when she sold over 100,000 shares of Mylan stock in advance of the latest price increases. As noted in the second link above, the stock price fell drastically after Dr. Rogers' piece was published.

Second, Bresch has taken Mylan through a corporate "inversion," a scheme by which a U.S. company buys a foreign subsidiary, then becomes a foreign corporation, with nothing else changing but its U.S. tax status. LA Times reporter Michael Hiltzik has written a full report on Mylan's inversion here.

Shamed by the Scandal, Heather Bresch Pretended to Lower EpiPen's Price

Mylan's price-gouging on its EpiPen business is indeed a scandal, not just on the business pages because of the sudden stock decline, but in the larger press because of the "vulture CEO" angle. Even MSNBC, which tends to keep hands off of Democrats, covered it, and tagged Sen. Joe Manchin in the story. (For more on Manchin and his responsibility for his daughter's career, do read Dr. Rogers' well researched story. Manchin's been involved at almost every stage of it.)

As a result of the horrible press, Mylan responded. It was initially reported that Mylan would lower the price of its EpiPen package by 50% in response to public outrage. For example, from The Hill:

EpiPen maker lowers price after uproar

The maker of EpiPens announced Thursday that it is reducing the price of the device following an uproar in Washington over the cost of the treatment for serious allergic reactions.

Mylan, the company that makes EpiPen, said it will provide a savings card worth up to $300 for people who had been paying the full price out-of-pocket, effectively reducing the cost by 50 percent.

The company is also making it easier to qualify for its patient assistance program, which eliminates out-of-pocket costs for uninsured and underinsured people....

Mylan announced the changed a day after Hillary Clinton denounced the company for hiking the cost of EpiPens 400 percent in recent years. Lawmakers on Capitol Hill had also sounded the alarm, sending letters to the company and to the Food and Drug Administration pressing for answers.

Mylan also pointed to insurance companies in its Thursday statement, noting that higher deductibles have left patients picking up more of the cost of drugs like EpiPens.

I hope you noted that last sentence, in which Mylan says "higher deductibles have left patients picking up more of the cost of drugs like EpiPens." Remember, each EpiPen contains about $1 worth of medicine. Patients are actually picking up the cost of CEO Bresch's nearly 700% compensation increase.

But it didn't take long for that "50% reduction in cost" claim to be more carefully looked at. For example, from USuncut:

EpiPen did not actually lower their price — it’s just another Pharma scam

Mylan Pharmaceuticals is now running a slick PR campaign to try and convince Americans they lowered the price of the EpiPen. Don’t buy it.

On Thursday morning, it was widely reported that Mylan responded to consumer outrage by lowering the price of the drug by 50 percent. While that may be true on the surface, the company didn’t actually change the price at all. The drug company’s rollout of EpiPen price cuts only applies to uninsured and underinsured consumers, who are given a $300 savings card while still having to pay roughly $300 more for a [$640] package of two EpiPens.

The bottom line?

However, the market price of the EpiPen remains the same.

And that's how the game is played.

This is Heather Manchin Bresch, by the way, in case you see her on the street. I'm sure she'd be glad to explain the numerous price increases at length. Maybe there's a nuance she can point you to that I've missed.

Mylan CEO Heather Bresch (source; photo credit Joe Wojcik)

Or maybe not. This really is shakedown scheme, with a sidecar of "or your kid dies." Is predator too strong a word for this behavior? Or is predation just business as usual in drug company CEO suites and the DC political offices that take their money?

Hate the Drug Companies? Support California's Prop 61 Next November

If you think predator is not too strong a word for drug company "shakedown or death" profit schemes, consider supporting California's new Proposition 61, which will end Big Pharma's hold on unchecked and sky-high prices. Prop 61 is a serious attack on drug pricing, and it will work if it's passed. It will also appear in a number of other states if it's passed — hope for us all.

More on Prop 61 here.

GP
 

Why Do We Pay The Highest Prices For Drugs In The World?

And why is Bernie blocking Obama's nominee for FDA head? Obama's done a lot of good things as president and there's a tendency for progressives to be favorable towards him. But it behooves us to remember he's a politician-- from Chicago-- and that he's done a lot of bad things as well and to be wary of what he's up to now. Bernie's 100% right to block Obama's FDA nominee-- and 100% is more than 99%.

This morning in a letter to his supporters, southwest Michigan congressional candidate Paul Clements, a progressive who supported Bernie in the primary, asked "What does a 10% cost increase mean to you? For many seniors a 10% increase in the cost of medication can mean the difference between this medicine or that one, between taking the whole pill, or half. Or it can mean the difference between food and medicine. Right now our laws put corporate profit above seniors' needs. A new independent analysis published yesterday says the cost of hundreds of medications in the Medicare Part D program rose by 10% since 2014. Even more, the cost of simply enrolling in Part D rose 13% over last year alone. We need to let the government negotiate drug prices. In Congress I will be a leading proponent for it, and Congressman Upton has led efforts banning such negotiations. That's why I'm running, because simple, practical changes to our laws can make life changing differences to millions of Americans." (You can support Clements' bid to defeat anti-health care reactionary Fred Upton here. His opponent, Fred Upton, is among the biggest bribe takers from Mylan and Big Pharma in general, and makes sure their agenda sails through his committee and through Congress.)

A few days ago, Lee Rogers broke the story about how Joe Manchin's greed-driven, avaricious daughter-- who, like her father, has a clear record of being a cheat and a lowlife-- right here at DWT. Yesterday Lee reminded me that aside from the Manchin daughter giving herself a 671% pay increase to celebrate all the people who would die when she raised the price of EpiPen-- from $2,453,456 nine years ago to $18,931,068 today-- she also illegally used inside information to trade over 100,000 shares in early August, anticipating her company's stock collapsing when news broke about Mylan's plan to murder their customers. The average price she got was around $50/share, bringing the greedy little monster $5,010,000.00, leaving her with another 828,318 shares valued at $41,415,900.00. The share price has been crashing ever since Rogers wrote his piece about how she raised the price of EpiPen to $635. (from $57).

And this is how the stock was performing as I was writing this post:

Were the Manchin daughter to sell her 100,200 shares at $43 instead of the $50 she sold it at when only she knew what was about to happen, she would have netted $4,308,600, nearly a million dollars less than she was able to bank. I have a vague recollection from my days working inside corporate America that insider trading is highly illegal and that all senior level executives are warned about the dangers, but from what I've been able to discern, she hasn't been fired or arrested yet-- or even questioned.

The Manchin daughter is a former lobbyist for the company and when she took over as CEO, the amount Mylan spent on lobbying soared astronomically. She contributes to political campaigns-- a legalistic term for bribery-- through the Generic Pharmaceutical Association, which spent $175,448 bribing members of Congress last cycle. The crooked Members who took the biggest bribes in 2014 were notoriously corrupt Republicans Mitch McConnell (KY), Joe Pitts (PA), Fred Upton (MI) and Lamar Alexander (TN) and so far this cycle Manchin's daughter has made sure the crooked members who got greased we're Chuck Schumer (D-NY), Tim Scott (R-SC), hometown boy David McKinley (R-WV), Keith Rothfus (R-PA), Fred Upton (MI) again... and she made sure Pelosi's corrupt DCCC chairman Ben Ray Lujan got a taste as well. And what did she want for her bribes? Mylan successfully pushed through legislation to encourage use of the EpiPen in schools nationwide, as well as about $4 million in lobbying for the School Access to Emergency Epinephrine Act.

Michael Hiltzik pointed out for L.A. Times readers that little Heather, Manchin's horrid daughter, has condoned a tax-dodging scheme for her company as well, as had Rogers when he first broke the story on Monday. "[T]here’s another reason," wrote Hiltzik, "to detest this remarkably amoral corporation: It’s also a tax dodger. Mylan is one of the leading exploiters of the technique known as inversion, in which a U.S. company cuts its tax bill by acquiring a foreign firm and moving its tax domicile to the acquired company’s homeland." Heather's not making America great again.

Mylan’s 2014 deal involved its buying a generics manufacturer from Abbott Laboratories and reincorporating in the Netherlands, the subsidiary’s home. As in all inversions, nothing else changed: Mylan’s operational headquarters remained in Pennsylvania, and its main workforce didn’t relocate. At one point, Mylan even appealed to U.S. antitrust officials to help it block a takeover bid from an Israeli company. But the deal did allow the firm to cut its U.S. tax bill.

President Obama has labeled inversions “unpatriotic” and “one of the most insidious loopholes out there.” The Treasury Department has tightened tax rules several times to discourage them, and public disapproval has spiked a deal here and there.

Mylan’s inversion helped give this variety of loophole its noxious reputation, in part because defense of its deal was so transparently self-serving. Its CEO, Heather Bresch, daughter of U.S. Sen. Joe Manchin (D-W.Va.), wrung her hands over the anguish she suffered in deciding to skip out on the company’s obligations as a U.S. corporation. She told the New York Times, “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.” Credulously, the Times regurgitated that she made the decision “reluctantly, and she genuinely seems to mean it.”

Should Mylan be believed? Let’s judge it by its marketing of the EpiPen. The spring-loaded syringe-like device is designed to deliver a measured dose of epinephrine, which instantly reverses the swelling, breathing problems and other manifestations of severe reactions to peanuts, bee stings and other allergens. The pens come in two-packs in order to provide a second dose if needed. Families with allergy-prone kids have to lay in a supply of several packs, say for home and school, and replace them once a year when they expire.

Since acquiring rights to the product in 2007 when a two-pack sold for about $100, Mylan has relentlessly raised its price, to more than $600 now. That can place the product out of reach of families whose insurance doesn’t fully cover the cost, forcing them to use expired pens or resort to hand-injections, which can be dangerous.

The price increase isn’t driven by Mylan’s costs. The manufacturing cost is essentially pennies per device, and the active ingredient, epinephrine, is a generic drug that has been in use for decades, so the company isn’t working down any research and development costs. Instead, it’s simply profiteering from market dynamics: Its main competitor, a product made by Sanofi, was taken off the market last year because of manufacturing defects. Another potential rival, from the generics company Teva, hasn’t yet won approval from the Food and Drug Administration.

Mylan’s price-gouging has enraged patients and doctors and created whitecaps on Capitol Hill. On Monday, Sen. Amy Klobuchar (D-Minn.), ranking member of the Senate antitrust subcommittee, asked the Federal Trade Commission to look into the matter. Sen. Chuck Grassley (R-Iowa), chairman of the Judiciary Committee, also has questioned the increases.

“There does not appear to be any justification for the continual price increases of EpiPen,” Klobuchar wrote the FTC. “Manufacturing costs for the product have been stable and Mylan does not need to recover the product’s research and development costs... Not only is this alarming price increase unjustified, it puts life-saving treatment out of reach to the consumers who need it most.”

Mylan rationalizes the EpiPen’s price as the fair cost of “a life-saving drug,” as Bresch told Wall Street analysts this month. Under the circumstances, she said, “I think that you can see it falls as not an expensive product.” She did acknowledge, however, that “as employers shift more cost to employees and make that everything has got to come out of pocket before you hit your deductible... you’re seeing a lot of noise around EpiPen.”

A lot of profit too. Mylan recorded $847 million in net income last year on sales of $9.4 billion. The EpiPen was a significant contributor, with sales of $1 billion.

The company has tried to have it both ways in relation to its inversion deal. Let’s examine Bresch’s assertion that the company found it just impossible to “maintain competitiveness” under U.S. tax rules. At a 2015 forum sponsored by Fortune Magazine, she griped that “there is an unlevel playing field in our country. We really penalize U.S.-based companies.”

Is that so? As we pointed out at the time of its inversion, over the previous two years, its sales had increased 12.7% and profits 16%; among its big competitors paying putatively lower taxes, British-based GlaxoSmithKline had gained only 3.14% in sales and 11.23% in profits. Israel-based Teva’s sales had risen 11%, and its profits declined 54%. Israel’s top corporate tax rate is 26.5%, the equivalent top U.S. federal rate is 35%.

But Mylan didn’t pay that top rate, of course. Almost no U.S. corporation does; CEOs use the statutory rate as a political boogeyman. Mylan’s effective tax rate had been only 16.2% in 2013, 20% in 2012 and 17.7% in 2011.

Bresch’s contention that Mylan was a “reluctant” inverter doesn’t hold much water. At that Fortune event, she reiterated the claim that Mylan hadn’t been seeking an inversion partner but had been willing to look into a deal “if the opportunity presented itself.” But she also seemed to say that its search for a partner was rather more proactive than that. “When we were inverting, we … looked at a lot of countries because we had the opportunity to really domicile where we wanted to, and the Netherlands was a... natural.”

Corporate mouthpieces and other defenders of inversions say there’s nothing wrong-- even something admirable-- in a company’s trying to do the best for its shareholders by cutting their tax bites. The argument is: “You don’t like it? Change the tax law.”

The problem with this position is that U.S. corporations have lots of advantages over foreign competitors that have to be paid for by taxes; inversions just amount to sticking the cost to someone else. Mylan itself proved this point last year, when it tried to fend off a takeover attempt by Teva by asking the U.S. government to declare it a U.S. company. That would have given U.S. antitrust officials the opportunity to block the takeover by a foreign company. Teva’s takeover attempt eventually broke down anyway.

Dena Grayson is running for an open congressional seat in central Florida. Her statement on Mylan is exactly the kind of strong position voters are looking from for leaders. Please wrap your head around what she's saying and then, if you agree, consider contributing to her campaign here.

"As a doctor and medical researcher, I know first-hand how much innovative new treatments can relieve suffering and save lives. And I know that it takes many years and extraordinary effort to discover and develop effective treatments for deadly diseases. But this isn’t scientific innovation by Manchin’s daughter at Mylan. It’s good ol' fashioned greed, plain and simple. Even worse, it's at the cost of the most vulnerable members of our society: sick kids. While Manchin’s avaricious daughter relaxes in her mansion, parents are forced to make a choice that no parent should ever have to make: whether to protect their child from dying from a fatal allergic attack, versus paying the rent. Yes, Mylan produces a tried and true medicine that saves lives, but it’s not innovative. It’s as though Mylan stumbled upon an cheap, old print of a Monet painting in their grandmother’s attic, and are now trying to pass it off as an original masterpiece. If Mylan is unable or unwilling to control their greed, then we will have to do it for them. Plain and simple."

Blue America has billboards up all over Polk County right now

UPDATE:

Manchin's not very bright daughter-- and utterly devoid of a moral compass-- has cost Mylan's shareholders in the realm of $3 billion dollars, just so she could pocket a few million for herself. So far she's still neither fired nor arrested... but I bet no one's too happy about this:

Casting a Web of Lies for Campaign Dollars-- A Guest Post By Lee Rogers

The 2 most dishonest grifters trying to separate you from your cash today

Today is the day. I’m sure your inbox has already blown up. It’s June 30-- the most important day in political donations. But if you read these campaign solicitations, every day is the most important day in fundraising. If you’re involved in politics, or have ever donated to candidate, or to any interest group, your email inbox has come to realize there really isn’t any “season” for campaign fundraising. Requests for money are incessant. People often wonder, “How did I even get on this distribution list?” Well, surprisingly, you don’t have to sign up for emails from a candidate or organization to be spammed. Your email address is shared numerous times by campaigns, interest groups, and the party. Even software vendors to campaigns bury language in their agreements that if the candidate loses, they have permission to acquire their email list and give it to the party where it gets prostituted out to anyone they wish. You could spend weeks in a never-ending battle of clicking “unsubscribe” in an effort to clean up your inbox, only to be added to more lists.

Let’s face it. Campaigning is tough. Not because it’s difficult to walk neighborhoods, knock on doors, talk to voters, speak at rallies, go to house parties, interview with the press, attend party events, or meet other elected officials. That’s what candidates love to do. But what may surprise most Americans, but few insiders, is that candidates, especially challengers, really spend about 90% of their time fundraising. Incumbents spend a large amount of time fundraising too, but they can raise more money in considerably less time. It takes a tremendous amount of money to run for federal office, while the size of the district and the cost of the media markets to run TV ads are two of the major drivers. Campaigns hire finance teams and fundraising consultants to help them strategize on how to raise money. Candidates often spend hours at a time on the phone using computer-generated call sheets to ask for money, which campaign finance people jokingly call “dialing for dollars.” There is often a finance staffer with the candidate on the phone to enter notes of the conversation so that the candidate can easily reconnect with the donor on a personal level during future resolicitations.

But the easiest target of all is online fundraising. It’s one of the few types of fundraising which can be completed without candidates using their own time. Even if an email only generates a few hundred or a couple thousand dollars, it’s worth it.

There is frequently a battle on campaigns between the finance staff and the GOTV staff or the candidate on how many and how often to send out fundraising emails. The finance staff cares about one thing only, money in the bank, and they don’t mind “burning the list” (a phrase that means you send out so many emails the list becomes ineffective) in order to do that.

The dishonesty in campaign fundraising feeds into what people hate most about politicians-- they’ll say or do anything to get elected. And yet, email fundraising is its own breed of deception.

Here is a list of the common lies and misleading practices used in campaign fundraising emails:

Using a false “From:” address

Campaigns will frequently send out an email from someone famous, another elected official, or even just someone else on the campaign to trick a recipient into opening it. They’re never really from someone famous. The actual address is a campaign address like info@thiscampaign.com or famousactorname@thiscampaign.com.

Fabricating a forward

Campaigns write an email that appears to be forwarded from the candidate. It usually includes “Fwd:” in the subject line and often the campaign staffer writes, “Did you see this?” in the body.

Creating false deadlines

Federal Election Commission deadlines are at the end of quarters, March 31, June 30, September 30, and December 31. Campaigns will use a deadline-oriented appeal around dates that aren’t actually deadlines, using language like, “Hurry, you only have until midnight tonight to make a difference in this race.”

Using fake goals

Campaigns write emails like, “Hey, we’re only $5,771 short of our fundraising goal, can I count on you to help?” These numbers are completely made up.

Matching programs

“Double your donation! We’re receiving matching funds for all donations that come in this quarter.” Of course, they never say who’s matching the donations, because no one actually is.

Sign Petitions

Campaigns will send out emails asking for signatures on an online petition, which also requests the signer’s email address. Campaigns don’t care about the petition, but in reality they are just building their email list so they can spam you later for money.

However, a couple lies I saw in recent fundraising communications should win an award for the biggest frauds.

Runner Up

A fundraising letter I received from Republican Senator Ted Cruz proved that snail mail can still be just as deceptive as email fundraising. The envelope read “Check enclosed” and appeared to be a check through the address window. Opening the envelope revealed a $45.00 forged check, complete with “security features” and fake account numbers at the bottom. The reverse of the check had an area for endorsement. Small text stated “THIS CHECK IS A FACSIMILE NOT REDEEMABLE OR NEGOTIABLE AND HAS NO CASH VALUE.” As it turns out, the check is a scam for a donor matching program with deceptive messaging to trick the recipient into opening the letter.

Biggest Lie

Also recently, I received the latest in a barrage of email blasts from Democratic Congressman Patrick Murphy, running for US Senate in Florida, even though I never subscribed to his list and I have actually donated to his primary opponent, Rep. Alan Grayson.

The email came from Murphy finance director Josh Wolf, which faked a string of emails between Murphy and Wolf using the prospective donor’s (or you might say “victim’s”) name claiming that Murphy was personally asking for the donor by name to see if they’ve contributed yet to meet their arbitrary goal.

In the string complete with fake email headers, Murphy writes, “Can you ping [donor first name] to see if they can help?”

No doubt that raising money is the most difficult, and sadly the most important, part of campaigns. It is also the least favorite activity for candidates who often have to be corralled by their finance staff. Candidates look for easy ways out and let the finance staff craft the messaging and strategy for online fundraising. Which regrettably, leads to blatant deception and for some reason this is accepted industry practice. Maybe I’m alone, but I believe that a candidate without scruples in fundraising in their campaign for office, likely won’t have any scruples when performing the duties of their office.

Dr. Lee Rogers was a Democratic candidate for U.S. Congress in California’s 25th District in 2012 and 2014. Blue America, which endorsed Lee when he ran, raises money the old fashioned way and without any of the dishonest gimmicks encouraged by the DCCC, DSCC, or DNC and other groups you might expect more honesty and transparency from from. Below is a thermometer that leads to an ActBlue page which contains the candidates we have endorsed this cycle. They are all worthwhile progressives worthy of contributions today, tomorrow any any time between now and election day.