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  From: Mark Graffis <ab758@virgin.usvi.net>
  Newsgroups: misc.activism.progressive
        Copyright &copy 1997 The (Raleigh, N.C.) News & Observer
     RESEARCH TRIANGLE PARK, N.C. (July 15, 1997 01:21 a.m. EDT) -- Along
     with developing drugs that treat everything from ulcers to AIDS,
     Wellcome has spent the past few years perfecting a product of a
     different sort: corporate politics.
     The pharmaceutical giant has blossomed into one of the most
     influential companies in Washington. Since the beginning of the
     decade, donations to federal candidates from its employee political
     action committee have risen 400 percent.
     Its PAC now ranks 15th nationally. It employs five full-time
     lobbyists. Last year, it contracted with 50 additional lobbyists,
     including several former congressmen. During the first six months of
     1996, Glaxo spent more than $2.1 million lobbying Congress on such
     issues as a high-profile fight that extended a drug patent and, some
     analysts believe, earned it at least an extra $1 billion in sales.
     The company is kind to politicians in other ways, including letting
     them use its corporate jet. The result is a political force whose
     influence is felt in the drugstore, where customers face higher
     for certain prescriptions; at the ballot box, where state and
     politicians, backed by Glaxo money, run for office; and in Congress,
     where measures of interest to Glaxo are often considered.
     Glaxo officials argue that their investment in politics is simply
     meant to ensure that legislation affecting their business gets a fair
     hearing in Congress. They contend that it has little impact on how
     politicians actually vote.
     "We're really striving just to get a real full and fair and honest
     open debate on issues," said Timothy Williams, an associate general
     counsel who was chairman of the Glaxo Wellcome PAC's board of
     directors for the past two years.
     "We hope our involvement will at least lead politicians to give
     a 360-degree perspective and take into account both sides of the
     The company has achieved such prominence that Sen. Ted Kennedy,
     D-Mass., took to the Senate floor last year to rail against it and
     lobbying strength. Glaxo, he said, was an example of corporate
     influencing politics.
     "They're definitely very powerful," said Nancy Watzman, project
     director for the Center for Responsive Politics, a Washington-based
     nonprofit that monitors campaign finance issues. "And they're doing
     all the things that make you powerful in Washington."
     Glaxo's parent company is based in Great Britain and has been
     operating in the United States since 1977. Two years ago, it merged
     with competitor Burroughs Wellcome to form the world's largest
     pharmaceutical company.
     Even before the merger, Glaxo was an active political player. As the
     company was completing construction of its $450 million headquarters
     in 1989, Sen. Jesse Helms, R-N.C., flew to Australia at Glaxo's
     request as part of the company's efforts to change a U.S. law that
     limited legal imports of Australian opium, a crop it controlled. A
     year later, Helms persuaded Congress to pass a $10 million tax break
     on import duties the company paid for an ingredient in one of its
     major drugs.
     Talk of a health-care revolution really got Glaxo going. When Bill
     Clinton was elected president in 1992, pharmaceutical companies
     worried about possible new restrictions. Glaxo mobilized its forces
     and joined the fight that would eventually defeat the reform
     Along with Glaxo's political donations, then-CEO Charlie Sanders
     helped form an industry group that bought radio ads in 25
     congressional districts to argue against the price control in
     Clinton's plan.
     The company has built on the political lessons it learned in that
     fight. Perhaps nothing better illustrates Glaxo's growing influence
     than the battle it won in keeping an extension of the patent for
     Zantac, Glaxo's ulcer medicine.
     "Here's a situation where there's one company that stood to benefit
     and spent millions and millions of dollars on a particular
     said Watzman, of the Center for Responsive Politics.
     "And despite a pretty organized opposition, they managed to win
     through the force of their lobbying. I think that definitely caught
     people's attention."
     Glaxo's successes are a case study in the science of corporate
     politics. It has succeeded by spending a lot of money and taking the
     role politics plays in the health of its company very seriously.
     This past election its PAC donations were the largest of any U.S.
     pharmaceutical company. Glaxo encourages employees to be politically
     active and has organized its own political network for workers.
     "The important thing is that employees here are American citizens,"
     said Nancy Pekarek, a Glaxo Wellcome spokeswoman.
     More than 1,500 employees contribute to the company PAC. They elect a
     board that decides which candidates will receive donations.
     Republicans have been the major beneficiaries, by almost five to one.
     During 1995-96, Glaxo doled out $495,000 in soft money to the two
     major parties, with 90 percent going to the Republicans.
     Glaxo spent more than $2 million lobbying from January to June 1996.
     Sanders said lobbying is something every major company does, and that
     Glaxo simply wants to get a fair hearing on its issues.
     "Lobbying has a bad name because people think you are getting some
     undue influence," Sanders said. "But the fact is, you want to talk to
     your representative and tell them if something is affecting you and
     present your side. But that's democracy. That's what it's all about."
     Congressmen can expect to receive phone calls or letters from Glaxo
     employees asking them to support the company. The "Civic Action
     Network" consists of 1,800 employees from across the country.
     "Any true grass-roots movement has breadth as well as depth," said
     Dick Domann, director of the network. "And since we have folks from
     Alaska to Florida, that carries a little more weight."
     Glaxo's links to politicians extend to the skies, as well.
     can borrow or rent the company's 10-seat corporate jet, if it's
     nearby. Helms used it three times during the fall campaign and paid
     Glaxo $3,479, according to his records.
     "It's not uncommon for members of Congress to make requests for our
     jet," Pekarek said. "It's a common practice, I believe, among
     companies who own jets."
     When all these various lobbying methods are working in sync, the
     results can be powerful. Consider the fight over the ulcer medicine.
     When Congress passed the General Agreement on Tariffs and Trade in
     1994, it unexpectedly -- and, Glaxo critics say, inadvertently --
     extended two dozen drug patents, including the one for Zantac.
     Consumers would have to wait another 19 months for a cheaper generic
     version while Glaxo earned at least an extra $1 billion. It also
     a Canadian company building a plant to make a generic version would
     not go into operation until Glaxo's patent rights run out.
     Sen. David Pryor, an Arkansas Democrat who left office last year,
     wrote a bill to close what he called a "loophole" and eliminate that
     19-month patent extension.
     In fighting Pryor's bill, Glaxo found itself pitted against other
     pharmaceutical companies, the Clinton administration and a host of
     public-interest groups.
     Sen. Orrin Hatch, R-Utah, would eventually broker a compromise bill
     that allowed Glaxo to keep its 19-month patent extension.
     That was good news for Glaxo, which had donated more than $20,000 to
     Hatch and his PAC since 1990. The company also gave $5 million to the
     University of Utah's Huntsman Cancer Institute, which had been
     by a major Republican donor and Hatch supporter. Glaxp also flew
     here to give a speech to employees.
     Eleven senators, including Helms and Lauch Faircloth, R-N.C.,
     circulated a "dear colleague" letter urging senators to support
     Glaxo's position. Faircloth is a Glaxo stockholder and has received
     $15,000 in contributions from the company's PAC since 1990.
     Sen. Carol Moseley-Braun, D-Ill., also signed the letter. She
     $9,999 in contributions and was paid twice to speak at Glaxo
     Glaxo added some firepower, including Dennis DeConcini, the former
     Arizona senator who once served as chairman of the committee
     considering the bill, and former Sen. William Brock, a Tennessee
     Republican turned lobbyist who was once trade representative for
     President Reagan.
     The 53 senators who voted in favor of Glaxo received an average
     contribution of $5,470, according to the Center for Responsive
     Politics. Those who voted against received an average of $1,447.
     Ciba-Geigy, which wants to introduce a generic version, donated an
     average of $578 to the 45 who voted against it.
     The battle left bitter feelings among Glaxo's opponents.
     "What has happened since discovery of the loophole is a lesson in
     greed," said Kennedy during the final debate. "Glaxo and the other
     brand-name manufacturers began an intense lobbying campaign to
     this inadvertent mistake from being corrected. Corporate profits, not
     research and development, will be the prime beneficiary."
     Glaxo is focusing on the future -- speeding up approval of new drugs,
     legislation that would allow the export of drugs not approved for
     in the United States, and a tax credit for research and development.
     Critics say Glaxo's aggressive attitude toward politics will become
     even more common as companies seek to secure their profits in the
     global market.
     "They're a model for the future of what a corporation is becoming
     ...," said Bob Hall of Democracy South. "They're very active in
     manipulating politics to their benefit and doing it at every level
     that they need to do it."
     By CHRIS O'BRIEN, Raleigh News & Observer
  James Love | Center for Study of Responsive Law
  P.O. Box 19367 | Washington, DC 20036 | 202.387.8030
  http://www.cptech.org | love@cptech.org