DPC | July 9, 2007

Senate Oversight Highlights Week of June 25, 2007

“It is the proper duty of a representative body to look diligently into every affair of government and to talk much about what it sees. It is meant to be the eyes and the voice, and to embody the wisdom and will of its constituents.…” — Woodrow Wilson

Congress has the Constitutional responsibility to perform oversight of the Executive Branch and matters of public interest. This report summarizes highlights from each week’s Senate oversight hearings.

 

Tuesday, June 27, 2007: Senate Committee on the Judiciary, Subcommittee on the Constitution, Civil Rights, and Property Rights

“Oversight of the Federal Death Penalty”

·Further demonstrating their disrespect for the role of federal prosecutors, the Bush Administration’s Justice Department, under Attorneys General Ashcroft and Gonzales, has greatly diminished the authority of prosecutors to decide when to seek the death penalty. 

·Unlike the Clinton Administration, the Bush Administration has dismissed concerns of the legal and civil rights communities that African-American and Hispanic defendants disproportionately receive death penalty authorizations and sentences. 

·Recent exonerations have only amplified the importance of getting death penalty decisions right – the first time – because there are no second chances. Great weight should be given to the decisions of prosecutors closest to the case, especially when prosecutors have chosen not to seek the death penalty.

 

Tuesday, June 26, 2007: Senate Committee on Commerce, Science, and Transportation
“Impact of Media Violence on Children”

• Senators and witnesses discussed the negative effects of media violence on children, and contended that voluntary efforts by the entertainment industry have not solved the problem of indecent and violent programming for children. 
   
• An entertainment industry executive argued that imposing content limits is unjustified, and said that the responsibility for safeguarding children from media violence lies with parents. 
   
• While the Committee heard calls for the regulation of violence in the media, a witness voiced concerns that an attempt to regulate violence on television would violate the First Amendment. 

 

Wednesday, June 27, 2007: Senate Committee on Finance
“The Stealth Tax that’s No Longer a Wealth Tax: How to Stop the AMT from Sneaking Up on Unsuspecting Taxpayers”

• The Alternative Minimum Tax (AMT) is affecting fewer wealthy taxpayers while raising taxes on an increasing number of middle-class Americans. 
   
• Uncertainty about the future amount of taxes owed can only be solved by a permanent solution to the AMT problem. 
   
• The AMT punishes taxpayers who are married, those with large families, and those who live in higher-tax states.

 

Wednesday, June 27, 2007: Senate Committee on Homeland Security and Governmental Affairs
“Violent Islamist Extremism: The European Experience”

• The Iraq War is fueling terrorism and extremism in Europe and contributing to a sense of alienation among many Muslim communities. 
   
• Preventing radicalization and addressing violent Islamist extremism requires a comprehensive, multi-pronged strategy. 
   
• Engagement with the Muslim American community is vital to American security.
  
   

Wednesday, June 20, 2007: Senate Committee on Banking, Housing, and Urban Affairs, Subcommittee on Housing, Transportation, and Community Development
“Ending Mortgage Abuse: Safeguarding Homebuyers”

• Discrimination by mortgage brokers has made minorities more susceptible to predatory loan practices. 
   
• Collusion among poorly regulated mortgage lenders, brokers, and appraisers goes on because of a lack of federal oversight and enforcement. 
   
• Witnesses testified that federal regulation is necessary to curb lending abuses and will not harm borrowers or scrupulous lenders.

 

Wednesday, June 27, 2007: Senate Special Committee on Aging
“Paid to Prescribe? Exploring the Relationship Between Doctors and the Drug Industry”

• Senators and witnesses examined the financial relationship between the pharmaceutical industry and physicians. 
   
• Gifts and payments from the industry to physicians can have a negative influence on the quality and cost of patient care and undermine the public’s trust. 
   
• Representatives from the American Medical Association (AMA) and Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade organization, testified about their self-imposed, voluntary guidelines.
   
• While there are voluntary guidelines in place and some state-level regulation, Senators and witnesses testified that more needs to be done at the federal level.

Further demonstrating their disrespect for the role of federal prosecutors, the Bush Administration’s Justice Department, under Attorneys General Ashcroft and Gonzales, has greatly diminished the authority of prosecutors to decide when to seek the death penalty.In fact, since 2001, the Department has erred in favor of seeking the death penalty, often times over the objections of the U.S. Attorney and prosecutors closest to the case and has stripped prosecutors of their autonomy to enter plea agreements that take death off the table.

SEN. FEINGOLD: This is the first oversight hearing on the federal death penalty that the Senate Judiciary Committee has held in six years…. There have been many developments in the last six years. In 2001, the Justice Department made controversial changes to the protocols for Justice Department review of death-eligible cases. The new protocols required U.S. Attorneys for the first time to get [the] Attorney General[‘s] approval to enter into plea bargains that take the death penalty off the table. This resulted, in one New York case, in Attorney General Ashcroft nullifying a plea agreement in which a defendant had agreed to cooperate with the government in exchange for pleading guilty to a non-capital murder charge. This action was heavily criticized for jeopardizing future cooperation agreements, and Ashcroft finally reversed his decision more than a year later.

Those protocol changes also reversed the presumption against seeking the federal death penalty in a local jurisdiction that had already chosen to outlaw capital punishment, and instead stated that a lack of “appropriate punishment”in the local jurisdiction should be a factor in deciding whether to bring a federal capital case. 

DAVID BRUCK, FEDERAL DEATH PENALTY RESOURCE COUNSEL DIRECTOR, VIRGINIA CAPITAL CASE CLEARINGHOUSE, WASHINGTON AND LEE SCHOOL OF LAW: Prior to 1995, Justice Department regulations specified only that the death penalty could not be sought without the written authorization of the Attorney General. Individual United States Attorney’s Offices had unfettered and un[-]reviewed discretion to decline to seek the death penalty in any case: unless a local federal prosecutor wished to seek the death penalty, no rule or protocol required Main Justice involvement in the question of whether death would be sought. 

This changed in January, 1995, when Attorney General Reno promulgated a more complex set of regulations governing the exercise of discretion by the federal government in death-eligible cases. Under the 1995 protocol, U.S. Attorneys were required to submit to the Attorney General the question of whether death would be sought in any prosecution for an offense carrying a potential death sentence, regardless of whether the local U.S. Attorney wished to seek the death penalty. The regulation created a multi-tiered decision-making process at both the district and Main Justice levels, culminating in a recommendation from a newly-created Capital Case Review Committee and an ultimate decision by the Attorney General that the government would or would not file notice of intent to seek the death penalty…. 

Attorney General Reno overruled U.S. Attorney recommendations only rarely, and the cases in which she did so were evenly balanced between disapproving U.S. Attorneys’ requests to seek the death penalty (27 defendants), and authorizing the death penalty where such authorization had not been requested (26 defendants). Furthermore, because the U.S. Attorneys retained discretion to negotiate guilty pleas for non-capital sentences without further Main Justice review or approval, no case that Attorney General Reno authorized for death over a local prosecutor’s recommendation actually proceeded to trial as a capital case during the 1995-2000 period. In other words, the Attorney General’s newly-codified power to “require” local prosecutors to seek the death penalty was sparingly used, and had had no actual impact on the number of death sentences imposed. 

This changed with the advent of the Bush Administration in 2001. First, a revision to the protocol in June of that year specified that the death penalty could not be withdrawn by reason of a plea bargain without the Attorney General’s express permission. The Department has recently disclosed that the Attorney General has disapproved plea agreements for some 15 defendants since 2001, and more generally, the number of negotiated non-capital dispositions of cases following death penalty authorizations dropped markedly after adoption of the new rule. The overall effect of the requirement of [the] Attorney General[‘s] approval for negotiated settlements in death-eligible cases has been that a decision to authorize the death penalty now means, for the first time, a very high likelihood that the case will actually proceed to trial with the government seeking death. 

In addition, Attorneys General Ashcroft and Gonzales both exercised their power to overrule local death penalty decisions largely in one direction, choosing to require death penalty trials in cases where U.S. Attorneys had not recommended death 73 times, while overruling death recommendations for only 16 defendants. These 73 “required” death prosecutions represent a remarkably large proportion–one-third–of the 216 defendants authorized for the death penalty since 2001. 

… 

Paul K. Charlton, Former U.S. Attorney, District of Arizona: While there are surely a number of professions that can provide the same rewards, few carry the enormous responsibility and power that a prosecutor possesses. The decisions a prosecutor makes may alter or destroy reputations and careers. Where appropriate, a prosecutor will bring charges in order to deprive a criminal of his liberty interest. But it is the ultimate penalty that marks the profession of prosecutor as unique. Federal law allows a prosecutor to seek to take another person’s life, and to do so methodically and intentionally. Of all of the decisions that a prosecutor will make in his or her career, none will be more important than the whether to seek the death penalty. 

To illustrate this point, I wish to share my experience with you on a case which is currently set for trial. In that case, United States v. Rios Rico, the Attorney General ordered that the Arizona U.S. Attorney’s office seek the death penalty. I disagree with the Attorney General’s decision in Rios Rico…. 

The object of my testimony is not argue with the ultimate decision of the Attorney General, though, as I say, it is one with which I disagree. My goal, instead, is to illuminate the process, or lack thereof, that went into supporting the decision of the Attorney General to seek the death penalty. In arriving at its decision to seek the death penalty in Rios Rico, I believe that the Department of Justice erred in two ways. First, the Department failed to consider the quality of the evidence underlying the charges in the case. Second, the Department did not adequately take into consideration the opinions of the U.S. Attorney or the line prosecutors. Failing to consider these issues raises the risk that we will execute someone who is not deserving of the death penalty, and that is a mistake that we as a society cannot make.

 … 

With this in mind, I sought to convince the Death Penalty Committee not to recommend death in this case. The line Assistant U.S. Attorneys, the prosecutors assigned to the case, made their arguments to the Death Penalty Committee in person and we submitted a written memorandum setting out the reasons in support of my view that the death penalty was not appropriate. 

Under the previous Attorney General, when the Death Penalty Committee disagreed with my decision, I was notified of that disagreement. Here, the Death Penalty Committee rejected my position and that of the line Assistants. I received no word of their disagreement until I received a letter from Attorney General Gonzales “authorizing” me to seek the death penalty. No one had sought my opinion or provided me with an opportunity to give additional input after our initial presentation to the Death Penalty Committee. 

Once I received the Attorney General’s letter, I asked to have the decision reconsidered. In so doing I spoke with a number of individuals, including people within the Office of the Attorney General and the Assistant Attorney General for the Criminal Division. My most memorable discussion took place with Deputy Attorney General Paul McNulty. After speaking with McNulty, I received a call from his chief of staff, Mike Elston. Elston indicated that McNulty had spoken to the Attorney General and that McNulty wanted me to be aware of two things. First, that McNulty had spent a significant amount of time on this issue with the Attorney General, perhaps as much as 5 to 10 minutes. Second, McNulty wanted me to know that in presenting my view, he, McNulty, had remained neutral, neither supporting nor opposing my position. I was struck that on an issue as important as whether to execute someone, so little time would be devoted to the topic and that the Deputy Attorney General would maintain a neutral position. Elston reported that the Attorney General remained in favor of seeking the death penalty. When I asked to speak with the Attorney General personally on this issue, he denied my request. 

The Rios Rico case is instructive for a number of reasons. The Department should consider the quality of the evidence before determining whether to seek the death penalty. That did not happen here. The Department should give great weight to the opinions of the line prosecutors who are prosecuting the case. That did not happen here. The Attorney General should provide the U.S. Attorney with the opportunity to speak with the Attorney General personally on the issue of whether to seek the death penalty. That did not happen here. 

Unlike the Clinton Administration, the Bush Administration has dismissed concerns of the legal and civil rights communities that African-American and Hispanic defendants disproportionately receive death penalty authorizations and sentences. 

MR. BRUCK: The central concern of the hearings that this committee conducted June of 2001 was race, and more particularly with the unexplained fact that the overwhelming majority of criminal defendants whom the federal government was seeking to execute was drawn from racial and ethnic minority groups. Nine months earlier, then-Attorney General Reno and then-Deputy Attorney General Eric Holder had issued a report summarizing a massive amount of data on the previous five years’ processing of capital cases by the Department of Justice, and had both expressed concern over what appeared to be a racially and ethnically lop-sided pattern of capital prosecution. This concern at the highest levels of federal law enforcement eventually led to a RAND Corporation analysis of the 1995-2000 data, but in the meantime six more years have elapsed, the federal death penalty remains primarily focused on African-American and Hispanic defendants, and the Department of Justice has moved from a policy of relative transparency and openness (as evidenced by unprompted decision to issue the September, 2000 report) to one of greater secrecy in its implementation of the Federal Death Penalty Act.

At the same time, the federal death penalty system has become ever-larger, slower, more bureaucratic and more expensive, and we are no closer than we were in 2001 to understanding why, out of all the murders that occur in the United States each year, the federal system appears disproportionately to single out for death penalty prosecution those accused murderers who happen to be African-American and Hispanic. 

To be sure, we now have hundreds of pages of tables, charts and statistical analysis of the Clinton Administration’s death penalty record. But that was seven years and many hundreds of cases ago. More importantly, the research that has been done so far sheds little or no light on the most basic question: why is the pool of federally-indicted homicide defendants from which federal capital prosecutions are drawn itself so overwhelmingly African-American and Hispanic? The RAND study declined to examine this question at all, confining its analysis to the processing of those capital-eligible defendants already in the federal criminal justice system. 

The authors of a second study financed by the National Institute of Justice interviewed state and federal decision-makers in four federal districts in an effort to better understand the process by which homicides become federal cases (and thus subject to the Federal Death Penalty Act), but this study was descriptive rather than quantitative, and did not even attempt to answer the question of whether the wide array of current policies respecting the “federalization” of homicide prosecutions had either the intent or the effect of singling out minority defendants. 

Thus[,] the factual question that still must be answered before we can know whether the racial and ethnic composition of the pool of federal defendants from which death penalty prosecutions are drawn is “disproportionately”African-American or Hispanic when compared to the racial and ethnic composition of the much larger group of persons who are charged with homicides that could have been (but are usually not) brought into federal rather than state court. 

… 

Hilary O. Shelton, Director, Washington Bureau, NATIONAL ASSOCIATION FOR THE ADVANCEMENT OF COLORED PEOPLE (NAACP):From the days of slavery, through years of lynchings and Jim Crow laws, and even today capital punishment has always been deeply affected by race. This is true among the states as well as at the federal level. Despite the fact that African Americans make up only 13 percent of our Nation’s population, almost 50 percent of those who currently sit on the federal death row are African American. 

Furthermore, across the Nation about 80 percent of the victims in the underlying murder in death penalty cases are white, while less than 50 percent of murder victims overall are white. This statistic implies that white lives are valued more than those of racial or ethnic minorities in our criminal justice system…. 

Perhaps more disturbing is the fact that nobody at the Department of Justice can conclusively say that race is not a factor in determining which defendants are to be tried in federal death penalty cases. 

The Bush Department of Justice has also repeatedly disregarded the mores and values of people in states and jurisdictions where the death penalty has been outlawed.

MR. BRUCK: The Department has succeeded in securing eight death sentences in six jurisdictions where the death penalty is unavailable under state law. These have occurred in one case each in Iowa (two co-defendants), Massachusetts, Michigan, North Dakota, Vermont, and West Virginia (two co-defendants). The Department’s response to Senator Feingold’s question (No. 13) concerning the number of authorizations in such cases appears not to answer the precise question asked, but rather reports the number of cases in which the government has “tried and sought the death penalty,” a figure which would apparently not include cases in which the death penalty request was withdrawn due to plea negotiations or otherwise terminated prior to trial. The DOJ response also refers to “non-death [sic] penalty states,” a term which does not on its face include the District of Columbia and Puerto Rico, two non-death penalty jurisdictions in which U.S. Attorney Generals [sic] have authorized the death penalty to be sought on many occasions… 

… 

Roberto J. Sanchez Ramos, Secretary OF Justice, Commonwealth of Puerto Rico: The people of Puerto Rico have a longstanding, unwavering and broadly accepted commitment against the death penalty for moral, social, political, economic, cultural and religious reasons. The Constitution of the Commonwealth of Puerto Rico, enacted in 1952 and officially approved by the United States Congress, which gives expression to the culture and values of our citizens, provides in Article II, Section 7, that “the death penalty shall not exist” in Puerto Rico. 

More recently, considerable attention has been directed toward the consistent efforts of federal prosecutors in Puerto Rico to seek the death penalty in numerous cases. This federal policy is not in accord with our local culture and promotes jurisdictional tensions that require the immediate attention of policy-makers to establish rules generous and reasonable enough to accommodate the different qualities and diverse cultures that interrelate in the American legal system. In this sense, comity is a value that must not be disregarded if diverse peoples are to work and progress as one. 

Recent exonerations have only amplified the importance of getting death penalty decisions right – the first time – because there are no second chances. Great weight should be given to the decisions of prosecutors closest to the case, especially when prosecutors have chosen not to seek the death penalty.

SEC. SANCHEZ RAMOS: [T]he possibility of mistakes in the application of the death penalty is not theoretical; in fact, the evidence suggests it is not even remote. There is considerable evidence that an alarming number of persons have been incorrectly sentenced to death by various jurisdictions within the United States. For example, a study conducted at the Columbia University School of Law found that the overall national rate of prejudicial error in capital cases was 68 percent. When the cases were retried, over 82 percent of the defendants were not sentenced to death and seven percent were completely acquitted. 

DNA testing has also served to exonerate death row inmates. At least fourteen inmates exonerated by DNA testing were at one time sentenced to death or served time on death row. Here, too, the justice system had concluded that these defendants were guilty and deserving of the death penalty. DNA testing became available only in the early 1990s, due to advancements in science. If this testing had not been discovered until ten years later, many of these inmates would have been executed. And if DNA testing had been applied to earlier cases where inmates were executed in the 1970s and 1980s, the odds are high that it would have proven that some of them were innocent as well. 

… 

MS. SHELTON: Finally, the NAACP is very concerned about the number of people who have been exonerated since being placed on death row. Since 1973, over 120 people have been released from death row with evidence of their innocence. The death penalty is the ultimate punishment, one that is impossible to reverse in light of new evidence. 
 

Senators and witnesses discussed the negative effects of media violence on children.

SEN. ROCKEFELLER: Children today are being subjected to an unprecedented level of violent television content. There is no doubt it is coarsening our culture. I fear, too, that it is weakening our society…. 

I hold the entertainment industry responsible. Decades of scientific research have shown that violent television programming has a detrimental impact on the development of children. Yet today the content industry is in a never ending race to the bottom. It makes you wonder if there even is a bottom anymore…. 

Children watch on average between two and four hours of television every day. The occurrence of violence on television has increased by 75 percent since 1998 and has increased across the board on all five of the major broadcast networks. On average, American youth view more than 1,000 murders, rapes, and assaults each year on television. Sadly, by the time our children leave elementary school, they will have seen on average 100,000 acts of violence on television. 

… 

Dr. Dale Kunkel, Professor, Department of Communication, University of Arizona: Concern on the part of the public and Congress about the harmful influence of media violence on children dates back to the 1950s and 1960s, and remains strong today. The legitimacy of that concern is corroborated by extensive scientific research that has accumulated over the past 40 years. Indeed, in reviewing the totality of empirical evidence regarding the impact of media violence, the conclusion that exposure to violent portrayals poses a risk of harmful effects on children has been reached by the U.S. Surgeon General, the National Institutes of Mental Health, the National Academy of Sciences, the American Medical Association, the American Psychological Association, the American Academy of Pediatrics, and a host of other scientific and public health agencies and organizations. 

… 

Jeff J. McIntyre, Senior Legislative and Federal Affairs Officer, Public Policy Office, American Psychological Association: While the foundations of acts of violence are complex and variable, certain risk factors have been established in the psychological literature. Among the factors that place youth at risk for committing an act of violence are exposure to acts of violence. This includes, but is not limited to, those in the media. 

Foremost, the conclusions drawn on the basis of more than 30 years of research contributed by APA members – as highlighted in the U.S. Surgeon General’s report in 1972, the National Institute of Mental Health’s report in 1982, and the three-year National Television Violence Study in the 1990’s – shows that repeated exposure to violence in the mass media places children at risk for: 

·increases in aggression; 

·desensitization to acts of violence; 

·and unrealistic increases in fear of becoming a victim of violence, which results in the development of other negative characteristics, such as mistrust of others. 

… 

Tim Winter, President, Parents Television Council (PTC): This past January the PTC released Dying to Entertain – our latest Special Report analyzing the volume and degree of violence on primetime television. The television season which concluded last year was the most violent that the PTC has ever recorded – averaging 4.41 instances of violence per hour during prime time, or one instance every 13 and 1/2 minutes – an increase of 75 percent since the 1998 television season. Over the course of a year, that means many thousands of violent depictions are broadcast over the public airwaves at times when millions of children are in the audience.

Between 1998 and 2006, violence increased in every time slot, including the so-called “Family Hour” of 8 p.m. Eastern, 7 p.m. Central Time. Last year nearly half (49 percent) of all episodes which aired during the study period contained at least one instance of violence. Fifty-six percent was person-on-person violence. And 54 percent of violent scenes contained either a depiction of death or an implied death…. 

Mr. Chairman, violence has played an important role in dramatic story-telling for thousands of years. But the state of television violence is nothing like it has ever been before. As former FCC Chairman Newt Minow recently noted, “forty years ago I said television was a vast wasteland; now it is a toxic dump.”

 

Voluntary efforts by the media industry have not solved the problem of indecent and violent programming for children.

SEN. ROCKEFELLER: After years of inadequate and ineffective voluntary efforts by the industry, we are no closer to solving the problem of indecent and violent programming for children despite claims that parents have many tools at their disposal to address unwanted programming…. 

For too long, we have heard promises to do better, to put better tools in the hands of parents, to provide more options for families. But none of this has yielded results. Instead, we have the industry blaming parents for their lack of oversight of children’s television viewing. This is cowardly. We have a responsibility to do better, a responsibility the government must take seriously…. 

I have met with many representatives from the entertainment industry representing– broadcasters, cable, movies, and others. The one thing every CEO I meet tells me is that they are personally appalled by the violent content that is on television and they personally they agree with me. And, if they could change it they could. But yet, I never get a reason as to why the industry will not stop showing violent content. I think we all know the answer. Violent content is cheap to produce and profitable. It sells. The entertainment industry could change what we watch on television but it chooses to sell sex and violence instead. I reject the notion that television merely reflects our society, but rather I believe that television can and should be a positive force. 

To be blunt, the big media companies have placed a greater emphasis on their corporate short term profits than on long term health and well being of our children…. 

Instead of addressing the problem – too much violent programming on television – the industry seeks to hide behind ineffective band aids of voluntary action and providing parents more “tools”. Parents do not want more tools. They want the content off the air. It is no big secret that the industry has hoped that its latest voluntary campaign will stave off Congress from establishing common sense content and ratings regulations for television. I know that we will hear their now familiar arguments here today. The entertainment industry will claim that voluntary actions are sufficient and that they are only giving the public what it wants to view while giving parents all the tools necessary to block unwanted programming…. 

We now know that the entertainment and broadcasting industry has proven itself unable and unwilling to police itself. 

…

MR. WINTER: Our research into the television ratings system has repeatedly concluded that the industry’s application of it is arbitrary, inconsistent, capricious and self-serving. In a study we released this past April, content ratings descriptors were either inaccurate or missing two-thirds of the time. During the study period, not one single program on primetime broadcast television was rated TV-MA, meaning that the networks felt all of their content was appropriate for children as young as 14…. 

When it comes to behaving responsibly, sadly the industry is the model of inertia. Only when forced by the public through you is there every any positive movement undertaken by the industry. Mr. Chairman, I know in my heart that the industry is capable of solving this issue if they truly wanted to. The people I worked with during my twenty-plus years in the industry are brilliant and creative. In fact the industry did implement solutions for decades in the past. But the question is: will they help to solve this issue today? If the National Rifle Association can help the Congress pass consensus gun control legislation, then I believe Hollywood can help the Congress deal with this issue. Moreover, it must. Representing more than a million concerned families, we stand ready to work with you to forge real solutions to these problems. I hope the industry will step up and join us. 
 

An entertainment industry executive argued that imposing content limits is unjustified, and said that the responsibility for safeguarding children from media violence lies with parents.

Peter Liguori, President of Entertainment, Fox Broadcasting Company: Given the inherent difficulty of defining violence and drawing lines about what is appropriate, any attempt to regulate the depiction of violence seemingly would be found unconstitutional. And it would have a profound chilling effect on the creative community’s ability to produce authentic programming reflective of the world we live in. Let me be clear: I share your concern about violence in our society. But there isn’t an easy solution. The studies on the relationship between TV violence and violence in young people are clear. Three reports produced by our government – the Surgeon General, the FTC, and the FCC – have concluded that, while there may be a connection between television and violence, there is no causal link. This distinction is critically important. Without a causal link, we cannot justify imposing content limits on the media. 

Should we as parents, nonetheless, do our jobs to minimize our kids’ exposure to violent television? Absolutely. But this is the job of parents, not the government. In closing, parents have the information, the tools and, above all, the responsibility to decide which television shows are right for themselves and their children. We believe we should keep it that way.
 

The Committee heard calls for the regulation of violence in the media.

SEN. ROCKEFELLER: I fear that graphic violent programming has become so pervasive and has been shown to be so harmful, we are left with no choice but to have the government step in. 

I know that Congress has been reluctant to take on the issue of violence because defining decency is difficult. I will again reintroduce my legislation, because we must address this issue. I understand that these are hard lines to draw, but just because they are difficult doesn’t mean that we should stand by and do nothing. For the sake of our children and grandchildren, we have a moral obligation to tackle television violence and arm our parents with the tools to make their children safer. 

The real question for all of us here today is: “What are we going to do about protecting our children from the pervasive and escalating level of television violence?” Doing nothing is not an option. 

… 

DR. KUNKEL: It is well established by a compelling body of scientific evidence that television violence poses a risk of harmful effects for child-viewers. While exposure to media violence is not necessarily the most potent factor contributing to real world violence and aggression in the United States today, it is certainly the most pervasive. Millions of children spend an average of 20 or more hours per week watching television, and this cumulative exposure to violent images can shape young minds in unhealthy ways. Given the free-speech guarantees of the First Amendment, the courts have ruled that there must be evidence of a “compelling governmental interest” in order for Congress to take action that would regulate television content in any way, such as the indecency regulations enforced by the FCC. In my view, the empirical evidence documenting the risk of harmful effects from children’s exposure to televised violence clearly meets this threshold, and I should note that former Attorney General Janet Reno offered an identical opinion to this Committee when she testified before it on this same issue in the 1990s.

 

A witness voiced concerns that an attempt to regulate violence on television would violate the First Amendment.

Laurence H. Tribe, Carl M. Loeb University Professor, Harvard Law School: Any serious attempt to regulate violence on television would also be unconstitutional because the very effort on government’s part to regulate televised violence is an attempt by government to dictate the right way to think and feel about violence. But the First Amendment prohibits the government from forcing people to adopt a particular position on any subject of debate, whether the topic is global warming, immigration, or violence. And even if one believes that the First Amendment allows legislatures to limit the availability of violent content for the sake of young children – a conclusion that I believe is inconsistent with constitutional principle and Supreme Court precedent, which recognizes that children enjoy First Amendment protections as well – it is undeniable that the First Amendment fully protects the rights of adults and older children to view televised violence, and the concomitant rights of broadcasters, cable/satellite operators, and artists to formulate and express that content. Whatever Congress’s power to protect children, it cannot regulate speech in a way that infringes on these fundamental rights. 

The Alternative Minimum Tax (AMT) is affecting fewer wealthy taxpayers while raising taxes on an increasing number of middle-class Americans. 

SEN. BAUCUS: At the AMT’s beginning, Congress tried to stop just 155 taxpayers with incomes above $200,000 from completely avoiding taxes. It was an attempt to make sure that all taxpayers paid their fair share. Now, the AMT has morphed into a terrible beast. It ensnares American families who are just trying to get by. It besets families who are working hard and raising children. The IRS reported that 3.6 million taxpayers paid the AMT in 2005. And the Joint Committee on Taxation estimates that 4.2 million paid it in 2006. Of these, 25,000 had adjusted gross income of less than $20,000. That’s right – less than $20,000. Nearly 200,000 AMT taxpayers made between $75,000 and $100,000. One-point-three million taxpayers made between $100,000 and $200,000. Only 80,000 taxpayers made more than $1 million. 

…

FRANK DEGEN, GOVERNMENT RELATIONS COMMITTEE CHAIR, NATIONAL ASSOCIATION OF ENROLLED AGENTS: [T]he number of tax returns with AGIs (Adjusted Gross Incomes) over $200,000 without any tax liability has ballooned – to 2,420 in tax year 2004. 

…

DR. Leonard E. Burman,Director, Tax Policy Center; Senior Fellow, the Urban Institute: By 2010, half of all tax filers making between $75,000 and $100,000 will pay the AMT, up from 36 percent this year and less than one percent in 2006, when the temporary AMT fix was still in place…. In 2006, only 31 percent of filers with incomes above $1 million were affected by the AMT, compared with 51 percent of those with incomes between $200,000 and $500,000. By 2010, the difference is even starker: only 39 percent of millionaires will pay the AMT, but 94 percent of those in the $200,000 to $500,000 income class will. 

… 

Dr. Kevin Hassett, Director of Economic Policy Studies, American Enterprise Institute for Policy Research: AMT rates are higher, and often significantly so, for taxpayers with incomes between about $50,000 and about $300,000.
 

Uncertainty about the future amount of taxes owed can only be solved by a permanent solution to the AMT problem. 

MR. DEGEN: Congress has regularly renewed increased AMT exemption amounts. And to minimize the budget pain of there decisions, Congress has chosen to implement one and two year patches instead of engineering a permanent fix. Enrolled agents and sophisticated taxpayers understand this to be a band-aid approach to dealing with the AMT, while the unsophisticated (both taxpayers and preparers) may not even be aware that they are dodging the AMT bullet. The net result, however, is that the current environment of temporary, short-term AMT fixes makes meaningful, long-term tax planning impossible for millions of taxpayers. 

… 

DR. BURMAN: For example, in 2006, a patch was not enacted until May – after a substantial share of estimated tax payments and payroll withholding had been remitted for the year. Up until that point, taxpayers had to guess about whether they might owe as much as $4,000 or more in additional tax if the patch legislation did not pass. If they had guessed wrong, some could have been subject to penalties and interest for underpayment of estimated tax.
 

The AMT punishes taxpayers who are married, those with large families, and those who live in higher-tax states. 

DR. BURMAN: In 2006, taxpayers with three or more children were almost four times as likely to owe AMT as those with no children. By 2010, almost half of families with three or more children will find themselves on the AMT, compared with only 17 percent of those without children…. In 2006, households in high-tax states were almost three times more likely to be on the AMT than those in low-tax jurisdictions….The combination of the AMT marriage penalties, the fact that married couples often have children, and the fact that married couples tend to have higher household incomes resulted in married couples being more than five times as likely to owe AMT as singles in 2006. In 2007, with expiration of the temporary AMT fix, married couples are 15 times more likely to owe AMT than singles…. 

[A]bsent a change in law, the AMT will become the de facto tax system for upper-middle-class families with children. In 2006, the AMT affected less than one percent of married couples with two or more children and adjusted gross income between $75,000 and $100,000, but by 2010 that share will rise to 89 percent. 

The Iraq War is fueling terrorism and extremism in Europe and contributing to a sense of alienation among many Muslim communities.

JUDGE JEAN LOUIS BRUGIẺRE, First Vice President, Investigating Magistrate, France: The situation in Iraq is feeding Islamist activism in Europe. Several Islamist cells linked to Iraqi networks were dismantled in France in 2005 and 2006 when they planned to carry out terrorist actions. 

… 

DR. MARC SAGEMAN, Principal, Sageman Consulting, LLC: On the first prong, it is important to remove as soon as possible U.S. troops from Iraq, which has become the main source of inspiration of the new generation of Islamist terrorists. In the West, the Muslim community is very sensitive to the action of local law enforcement agencies. If it perceives them to act against its members, it will assume that the state is also against it. In a sense, that is what happened in many European countries, where Caucasian policemen patrol immigrant neighborhoods. Local police forces need to be seen as part of the community at large and their recruitment need to reflect the composition of their communities. It is not enough to have regular meetings with Muslim community leaders, whom the younger generation does not respect. Through the recruitment of young Muslims, police forces would have an ongoing everyday relationship with young people in the community. Furthermore, it is important to win the Muslim community over and explain police actions to them.
 

Preventing radicalization and addressing violent Islamist extremism requires a comprehensive, multi-pronged strategy. 

SEN. COLLINS: What I have already learned has reinforced my belief that there is no universal solvent to wipe away the stain of violent extremism. Police work, border security, and intelligence gathering are certainly part of the mix, but as the office of the Netherlands Coordinator for Counterterrorism recently observed, “Polarization, inter-ethnic violence, and xenophobia remain causes of concerns,” because they can increase the sense of rejection and alienation among Muslim communities. 

… 

LIDEWIJDE ONGERING, Deputy National Coordinator for Counterterrorism, Ministry of Justice, Netherlands: One way we work to prevent radicalization is by intensifying our efforts to integrate Muslims into Dutch society. We are trying to make Muslims feel more included, mainly by paying more attention to the identity issues confronting young Muslims in a Western environment, combating discrimination and exclusion, and encouraging Muslims to participate in society and politics…. A second main way we work to prevent radicalization is by increasing social resistance to radicalization and terrorism, especially within the Muslim community. In the Dutch government’s view, these problems cannot be solved without the help of our country’s Muslims. They’re the ones who generally suffer most from the radicals and terrorists…. Muslims are the ones who are bet able to recognize and resist the dangers of Islamic fundamentalism, jihadism and terrorism at an early stage…. A third and final way we work to prevent radicalization is by identifying, isolation and containing processes of radicalization. With this we want to stop radicalization before it leads to violence. This requires the authorities to be provocative in detecting signals that individuals may be isolating themselves or even turning against society. 
 

Engagement with the Muslim American community is vital to American security.

LYNN MARTIN AND FAROOQ KATHAWARI, Co-Chairs, Task Force for Muslim American Civic and Political Engagement, Chicago Council on Global Affairs: The Task Force has concluded that greater Muslim American civic and political engagement is urgently needed to prevent alienation in a community that is vital to U.S. security and relations with the Muslim world. Although Muslim Americans are a well-educated, diverse group that can make greater contributions to the nation, they lack strong institutions and sufficient recognizable public or political voices to gain regular access to government and media circles…. It is in the interest of all Americans to build trust and rapidly bring Muslim Americans into the social and political mainstream to strengthen our democratic institutions and improve U.S. foreign policy. Muslim American leaders should continue to take the lead in encouraging greater civic participation, leadership development, and institution building within their community. Non-Muslim groups and government leaders can work to improve collaborations with Muslim American institutions and provide greater opportunities for young Muslim Americans in government service. 

… 

SEN. LIEBERMAN: If the Pew estimates are correct, and there are roughly 1.5 million Muslims age 18 and older in the U.S., having five percent looking at al Qaeda favorably means there is a sizeable pool of Muslims who either are susceptible to al Qaeda’s propaganda and plans or already believe it…. That’s why it is important, as I said in the beginning, to understand how people become radicalized so we can counter that process before it turns into action. 

… 

DR. SAGEMAN: The American Muslim community is relatively young, having mostly immigrated in the last half century. Its young generation is searching for its identity and tying to define its role with respect to the rest of American society. It is important for the rest of American society to welcome Muslim Americans and help them integrate better within the fabric of our nation. We are doing better than our European counterparts in this regard, but we must continue to promote core American values of justice and fairness and fight those elements in our society that try to single out and antagonize part of our nation. 

Discrimination by mortgage brokers has made minorities more susceptible to predatory loan practices.

SEN. SCHUMER: HUD [Department of Housing and Urban Development] and the U.S. Treasury found that sub-prime loans were issued five times more frequently to black neighborhood households as they were to white neighborhood households. And 39 percent of homeowners living in upper-income black neighborhoods have sub-prime refinancing – twice the rate of homeowners living in lower-income white neighborhoods. 

… 

David Berenbaum, Executive Vice President, National Community Reinvestment Coalition (NCRC): [T]esting of mortgage brokers recently uncovered a 46 percent rate of disparate treatment based on race and national origin…. White testers were routinely shown higher levels of service, of encouragement and given more information about loan products. In the most egregious cases, members of the control group were given better pricing, and the tested companies represented their policies differently to the two testers…. NCRC documented pricing discrimination in 25 percent of the fair lending tests, and noted that fees were discussed 62 percent of the time with white testers but only 35 percent of the time with “protected testers.” Fixed rate loans were discussed 77 percent of the time with white testers but only 50 percent of the time with African American and Latino testers….

 When several residents of a minority or working class neighborhood suffer price discrimination, the neighborhood loses millions of dollars that could have been reinvested in neighborhood businesses and other institutions to build wealth…. 

[S]ubprime loans made up a high 41.9 percent of all refinance loans to low and moderate-income (LMI) African-Americans. In contrast, subprime loans were 19.2 percent of refinance loans to LMI whites in 2004. LMI African-Americans were 2.2 times more likely than LMI whites to receive subprime loans. Even for middle- and upper-income (MUI) African-Americans, subprime loans made up a large percentage (30.2 percent) of all refinance loans. Moreover, the subprime share of loans to MUI African-Americans was 2.7 times larger than the subprime share of loans to MUI whites. 

. …

 

Wade Henderson, President and CHIEF EXECUTIVE OFFICER, Leadership Conference on Civil Rights:The truth is that if federally regulated institutions were meeting their fair lending and CRA [Community Reinvestment Act] requirements and making affordable, sustainable, prime loans to deserving borrowers, we would not have seen such an explosive growth in abusive subprime lending. The hard truth is that African-Americans, Latinos and female householders disproportionately receive unsustainable high cost subprime loans. Federally regulated lenders, who routinely have denial rates for African-American and Latino loan applicants that are at least double the rate for Caucasian loan applicants, are not lending as they should to African-American, Latino and female borrowers. This gap in fair lending has opened the door for the unregulated lending market to come in and take advantage of these borrowers…. 

According to Home Mortgage Disclosure Act data, in 2005, over half of the loans to African Americans were higher-rate subprime loans, including 54.7 percent of purchase loans and 49.3 percent of refinance loans. For Latino borrowers, these figures were 46.1 percent and 33.8 percent, respectively. That same year, African Americans were 3.2, and Latinos 2.7, times more likely to receive a higher-rate home purchase loan than white non-Latino borrowers. And for refinances, African Americans were 2.3, and Latinos 1.6, times more likely to receive a higher-rate loan than non-Latino whites. According to research by the Center for Responsible Lending, these racial and ethnic disparities exist even after controlling for borrower traits such as credit scores, equity, and other risk factors…. 

[B]orrowers in predominately minority communities face 35 percent greater odds of receiving a prepayment penalty with a term of two years or more, compared to residents in zip codes with a “low”concentration of minority residents. For borrowers in medium-high minority areas, the odds of receiving prepayment penalties of two years or more is ten percent greater than that of similarly situated borrowers in low minority areas. 
 

Collusion among poorly regulated mortgage lenders, brokers, and appraisers goes on because of a lack of federal oversight and enforcement. 

MR.Berenbaum: A sample of CRF [Consumer Rescue Fund] loans revealed that about one-fifth of the homes were overvalued by more than 50 percent of their true value, and two thirds of the homes were overvalued by 15-50 percent more than their true value. Inflating appraisals leave borrowers with unaffordable loans that they are unable to refinance because the loan amounts are higher than the true value of their homes, especially as the housing market cools in the next few years. The results are too often theft of homeowner wealth, equity stripping, and/or foreclosure…. 

Of the 500 appraisers surveyed nationwide, an alarming figure of 55 percent said they felt pressure to overstate values of the properties they appraised. In addition, 99 percent of the appraisers interviewed believed that their peers give in to lender demands at some point. A more recent October Research report that was released in 2006 found that the incidence of pressuring appraisers increased to 90 percent.

… 

Mr. Henderson:[A]spects of the subprime mortgage lending system have reflected not just carelessness and a lack of accountability, but outright greed. Many mortgage brokers, for example, are given bonuses, or “yield spread premiums,” for steering unwitting borrowers into higher-rate subprime mortgages than their incomes or credit scores would otherwise dictate. Many subprime mortgages also include heavy penalties for early repayment, penalties that require borrowers to sacrifice thousands of dollars of equity in their homes if they wish to refinance at a lower rate…. 

[A]lthough the Federal Reserve has flagged 270 institutions for potential fair lending violations, there have been no cases brought or public actions taken by HUD, DOJ [Department of Justice], or any other entity. In addition, Congress should hold hearings on the failure of the regulators to adequately ensure that their member institutions are meeting their obligations under the Community Reinvestment Act. By driving large numbers of prospective lenders into the arms of abusive subprime lenders, the failure of federally-regulated lending institutions to live up to their obligations under these laws has been one of the key contributing factors to the mess in which we currently find ourselves. 

… 

Alan Hummel, Senior Vice President and Chief Appraiser, Forsythe Appraisals, LLC, on behalf of the Appraisal Institute:Our organizations are deeply concerned with the disparity of oversight and regulation of the appraisal process in the mortgage market today. There are rules governing federally regulated financial institutions, but virtually none for all other mortgage originators in the marketplace. Greater appraisal problems spring up in the unregulated wilderness…. Today, unscrupulous lenders and brokers have a totally free shot at the appraisal. They can coerce, pressure, entice, or conspire with appraisers, virtually without consequences. As a result, many deem appraiser coercion the way to do business. Too many brokers and lenders unfortunately view the appraisal process as something to be manipulated…. 

Ninety percent of appraisers were pressured by mortgage brokers, lenders, realty agents, consumers and others to raise property valuations to enable deals to go through. This was nearly double the abuse findings of a similar study three years ago. Moreover, the survey found that 75 percent of appraisers reported “negative ramifications” if they did not cooperate, alter their appraisal, to provide an artificial valuation. The prime culprits of pressure, according to the survey, were mortgage brokers (71 percent), real estate agents/brokers (56 percent), consumers (35 percent), lenders (33 percent), and appraisal management companies (25 percent)…. Unfortunately, these parties with a vested interest in the transaction are often the same people managing the appraisal process within many financial institutions, and therein is a terrible conflict of interest. In this situation our members experience systemic problems with coercion. Appraisers are ordered to doctor their reports or else never see work from those parties again…. 

[M]ore than 60 percent of the state appraiser regulatory agencies failed to uphold their 2006 enforcement responsibilities. Fourteen of the 23 states audited by the Appraisal Subcommittee did not resolve complaints expeditiously or did not adequately document enforcement files. 

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Michael D. Calhoun, President, Center For Responsible Lending:Subprime mortgage brokers, lenders, securitizers, and investors are operating in a market that rewards business practices that directly undermine homeowners and sustainable homeownership. Markets function effectively when transactions are likely to benefit all parties involved, but we don’t have that situation in subprime lending. The unfortunate truth is that brokers, lenders and investors have reaped enormous gains by originating loans with payments that explode in two short years, requiring homeowners, like clockwork, to refinance to a new subprime loan…. 

It is notable that the suppliers who provide the majority of subprime loans –mortgage brokers – have the least financial interest in loan quality. According to the Mortgage Bankers Association, mortgage brokers now originate 45 percent of all mortgages, and 71 percent of subprime loans. It is troubling that brokers, who have aggressively marketed dangerous loans in communities of color and low-wealth neighborhoods, and who have routinely charged excessive and unnecessary fees, have no financial interest in the ultimate success of the loans. Given the strong financial incentives to make unaffordable loans packed with fees, mere guidelines and suggestions will not be enough to stop risky loan practices and dangerous loan products…. 

The broker has specialized market knowledge that the borrower lacks and relies on. And brokers hold themselves out to borrowers as a trusted adviser for navigating the complex mortgage market; why otherwise would a person engage and pay for one? Yet, in most states, mortgage brokers have no legal responsibility to refrain from selling inappropriate, unaffordable loans, or to avoid benefiting personally at the expense of their borrowers. Brokers and lenders are focused on feeding investor demand in exchange for high fees, regardless of how particular products affect individual homeowners. Moreover, because of the way they are compensated, brokers have strong incentives to sell excessively expensive loans.
 

Witnesses testified that federal regulation is necessary to curb lending abuses and will not harm borrowers or scrupulous lenders. 

MR.Berenbaum: The rapid adoption of dangerous exotic and subprime ARM (Adjustable Rate Mortgages) loans as mainstream products indicates that the market has too few self-correcting mechanisms to curb dangerous products and practices. Strong law and regulation that effectively stop abusive practices do not reduce responsible lending. Instead well-crafted law puts the abusive lenders out of business, benefiting responsible lenders and families alike. 

… 

Anthony Yezer, Professor, George Washington University: FHA (Federal Housing Authority) mortgage insurance had substantial property inspection requirements, mortgage interest limits and other provisions designed to reduce the possibility that households would make bad decisions when they purchased and financed housing. I have long recommended that FHA be revitalized and that it be made a more effective competitor with conventional lenders. Instead, regulatory pressure on Fannie Mae and Freddie Mac forced them to compete with FHA (once again government policy has operated in the wrong direction). 

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Mr. Henderson:The GSE (Government Sponsored Enterprises) reported in 1996, based on an analysis of loans it had reviewed, that 35 percent of subprime mortgages could have qualified for a conforming, prime loan. More recently, Freddie Mac has conservatively estimated that 15 percent of subprime borrowers could qualify for traditional loans. Fannie Mae has reported estimates that up to 50 percent of subprime borrowers could qualify for prime loans…. 

Under the Home Ownership and Equity Protection Actof 1994 (HOEPA), the Federal Reserve has not only the statutory authority but the obligation to take much stronger action that would apply to all mortgage lenders. HOEPA states that the Federal Reserve “shall prohibit”mortgage loans that are “unfair, deceptive or designed to evade the provisions”of HOEPA, or that “are associated with abusive lending practices, or that are otherwise not in the interest of the borrower. To date, the Federal Reserve has utterly and inexcusably failed to use its authority, under HOEPA, to curtail abusive subprime mortgage lending practices. In doing so, it missed a vital opportunity to prevent countless numbers of Americans from losing their homes in the rapidly growing nationwide wave of foreclosures.

… 

Mr. Calhoun:Lenders who care about sustainable ownership take a few basic steps before approving subprime loans. They document the borrower’s income with the best information available, and make sure they have accurate property appraisals. They escrow for taxes and insurance, and they refrain from applying prepayment penalties, which bring no benefit to subprime borrowers, but only trap them in high-cost loans or drain thousands of dollars of hard-earned family equity. Lenders concerned about sustainable ownership do not saddle debt-strapped borrowers with loans designed to ratchet up in cost, and responsible lenders also take a hard look at the borrower’s ability to repay the loan. These are not industry secrets, but rather common-sense best practices that responsible lenders have always used in subprime lending, and that are still the norm in the prime sector.

 

Senators and witnesses examined the financial relationship between the pharmaceutical industry and physicians. 

SEN. KOHL: Today, we look forward to examining the financial relationship between the pharmaceutical industry and physicians. Interactions between doctors and drug manufacturer representatives often involve payments that can actually take the form of cash and gifts, such as meals, travel to conferences, or textbooks.

Unlike other professions, physicians are allowed to take payments from companies whose products they may choose to prescribe to their patients. Recent studies show that the more doctors interact with drug marketers, even though receiving small gifts and modest meals, the more likely doctors are to prescribe the expensive new drugs that are being marketed to them when a more affordable generic would do just as well…. Even more alarming, these gifts and payments can compromise physicians' medical judgment by putting their financial interest ahead of the welfare of their patients. Over the last several years, there have been attempts by the federal government, medical organizations, and drug companies to curb the excessive gifts and payments to physicians.

Unfortunately, as we'll hear from some of our witnesses today, financial ties between doctors and drug companies are only deepening. In fact, a study published in the New England Journal of Medicine earlier this year reported that 94 percent of physicians have received food and beverages, medication samples, and other gifts as well as payments for trips from drug companies…. It has been estimated that the drug industry spends $19 billion annually on marketing to physicians in the form of gifts, lunches, drug samples, and sponsorship of education programs. Companies certainly have the right to spend as much as they choose to promote their products, but as the largest payer of prescription drug costs, the federal government has an obligation to examine and take action when companies unfairly or illegally attempt to manipulate the market.

JEROME KASSIRER, MD, DISTINGUISHED PROFESSOR, TUFTS UNIVERSITY SCHOOL OF MEDICINE: I have been asked to provide a brief overview…of the complex intertwining of the medical profession and the pharmaceutical, biotechnology, and device industries and the consequences of these relationships. I will assert that the medical profession has become excessively dependent on the largess of industry, that these financial connections have a negative influence on the quality and cost of patient care and the trust of the public, and that the profession's response to these threats has been inadequate.

…

The magnitude of drug promotion astonishes, as 100,000 drug reps visit doctors, residents, nurses, and medical students every day and ply them with free gifts, meals, and gadgets. Medical meetings are mini-circuses, replete with enormous glittering displays and hovering attractive personnel. Although couched as education, these marketing efforts are thinly disguised bribes.

Just as surprising is the magnitude of physician involvement with industry. As you pointed out a few minutes ago, among a random sample of doctors reported just weeks ago in the New England Journal, more than three-quarters had taken free samples, free food, and free tickets to sporting events from industry; more than one-third accepted free continuing medical education; and another third had received payments for speaking or consulting for the companies or enrolling patients in clinical trials.

Some have estimated the industry's total advertising bill at $70 billion. There is nothing fundamentally wrong with advertising products, but when financial incentives yield inappropriate or dangerous care, when they inordinately raise the cost of care, when they risk patients' lives in clinical trials, and when they damage the profession, they have gone too far.

Gifts and payments from the industry to physicians can have a negative influence on the quality and cost of patient care and undermine the public’s trust.

DR. KASSIRER: Only two weeks ago, the New York Times reported that drugs were being selected for cancer patients depending on the profit they would achieve for a medical practice. The same week, we read a study that showed that sponsorship of controlled trials of statins was closely correlated with positive results of such trials.

Three weeks ago, we learned that payments for enrolling patients in clinical trials were leading to shabby research practices by unqualified researchers. This spring, we learned that physicians with financial ties to the company that makes Epogen were inappropriately represented on a National Kidney Foundation committee that recommended potentially dangerous doses of the drug….

 

Financial payments have swayed professional medical organizations to make inappropriate clinical recommendations. They have influenced industry-paid speakers to recommend risky drugs. They have biased FDA panels and yielded inappropriate behavior by NIH scientists.

 

GREG ROSENTHAL, MD: Drug companies exert control by controlling drug trials and linking them to marketing efforts; nurturing key opinion leaders, or KOLs, to influence medical decision- making; providing money, travel, and publicity for community doctors when they agree to promote certain products; funding professorships and other academic needs of those who support company interests; using unrestricted grants to influence journals, societies, meetings, and web sites; controlling speakers and presentation of CME courses and materials; and creating bogus expert panels to promote products and treatments.

…

The influence of Big Pharm, as we call it, is pervasive. Research used to be independently funded and designed, but with the decrease in public funding, drug companies have moved in aggressively. The independent trials have been replaced by corporate-sponsored RCTs, or randomized control trials. Although bias in such trials has been well documented, companies have, largely through their KOLs, promoted the idea that only sponsor data is valid, and there is growing pressure to ignore any non-CSRCT data. Either through financial inducement or fear tactics, many physicians are persuaded to comply. There have also been efforts to block studies and ignore data that might conflict with CSRCTs…. Societies and medical journals have become dependent on unrestricted grants from numerous pharmaceutical companies. In this context, unrestricted means "Use this for whatever you want, but if you ever want another one, don't displease us."

PETER LURIE, MD, M.P.H, DEPUTY DIRECTOR, PUBLIC CITIZEN’S HEALTH RESEARCH GROUP:There are multiple studies showing an impact upon changes in prescribing of doctors, upon their early adoption of new medications which themselves might be hazardous, and changes in formularies, all of them the result of interactions with drug representatives, with all-expenses-paid travel to various exotic locations, and the like. The companies, therefore, have a clear conflict of interest, and yet we have surrendered the marketplace to them by allowing them to influence physicians. The result can be prescribing that is based on marketing instead of on science. Patients are the victims of all this.

 

Representatives from the American Medical Association (AMA) and Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s trade organization, testified about their self-imposed, voluntary guidelines.
 

ROBERT SADE, CHAIR, COUNCIL ON ETHICAL AND JUDICIAL AFFAIRS, AMERICAN MEDICAL ASSOCIATION: The AMA was created in 1847 for the specific purpose of establishing ethical standards for all physicians. The AMA code of ethics has been continually revised for 160 years, guided by the Council on Ethical and Judicial Affairs, and serves as the primary compendium of medical professional ethical statements in the United States.

The code has clear ethical guidelines that govern physician interaction with the pharmaceutical industry. For example, physicians must not place their own financial interests above the welfare of their patients. A physician's medical recommendations must not be inappropriately influenced by financial considerations. Accordingly, it's unethical for a physician to accept any kind of compensation from a pharmaceutical company as a quid pro quo for prescribing its products.

The AMA code acknowledges that the giving of gifts reflects a customary social practice. However, it warns that gifts to physicians from commercial businesses may not be consistent with the AMA code. The code requires that gifts accepted by physicians must mainly benefit patients and should be of only modest value.

Also, the AMA code explicitly provides that no gifts should be accepted if conditions are attached, such as prescribing certain drugs. All gifts, however, are not inappropriate. Indeed, many of them will benefit patients. An example is when physicians provide drug samples to patients who have a medically indicated need for treatment but cannot afford to buy the necessary drugs.

The AMA works with state medical associations and specialty societies to disseminate ethical standards. To ensure compliance with these standards, the AMA relies not only on the Council on Ethical and Judicial Affairs, but also on medical licensing boards.

MARJORIE POWELL, SENIOR ASSISTANT GENERAL COUNSEL, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA: In 2002, PhRMA adopted a significantly revised marketing code, which focused exactly on that, identifying that the role of a physician's prescribing is to meet the patient's medical needs using the physician's medical knowledge and clinical experience. But some of that medical knowledge comes from practicing using prescription drugs once they've been on the market and experience with those drugs. It also comes from learning about new medicines, and that's the role of the pharmaceutical industry which has developed those new medicines.

In our code, we've clearly identified that if a pharmaceutical sales representative is providing a gift to a physician, it should be to benefit the patient. It should be of insubstantial value, not of any substantial value. It should not be frequent. It should also not be in exchange for prescribing any particular drug. We also talked about a number of other things in our code, including the ways that pharmaceutical companies might enter into consulting arrangements with physicians and other members of the health care profession, because those health care professionals have important information to convey back to pharmaceutical companies, partly running clinical trials, but also helping a company to identify, for example, why it is that a patient may not be compliant with a drug regimen and what kinds of possible changes in a medicine would improve compliance.

 

While there are voluntary guidelines in place and some state-level regulation, Senators and witnesses testified that more needs to be done at the federal level.

 

SEN. KOHL: Obviously, we take this issue very seriously, and we will continue oversight of the relationship between doctors and the drug industry. While there are voluntary guidelines already in place, to us it seems clear that they're not being sufficiently well followed. We intend to vigorously pursue stronger adherence to these guidelines, as well as to propose a national registry to require disclosure of payments and gifts. I believe we need transparency at the minimum and at the outset. Many of these gifts are not illegal, but we need them disclosed. These interactions involving things of value between the pharmaceutical industry and doctors, in our judgment, need to be made public.

 

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DR. LURIE: I'm here to talk about the state laws that require disclosure of gifts from drug companies to doctors…. We have a minority of states that have laws, and…those laws are riddled with holes and poor enforcement…. The overall quality of the statutes in the different states has been poor. Their implementation has been worse. And because the physician payment issue is a national one, not a state one, the most rational approach to this issue is a national reporting requirement.

…

 

DR. KASSIRER: And what have leaders in the profession done to counter a trend in which the profession has become increasingly beholden to industry? Not much. The American Medical Association and many other physician organizations permit their members to receive gifts and meals and to serve on pharmaceutical companies' speaker's bureaus. Most of them have no proscription against members' involvement as consultants to industry for marketing or for the development of educational materials. In fact, most medical society rules are no more stringent than those of PhRMA.

Last year, my colleagues and I recommended conflict-of-interest policies for academic medical centers. We proposed that industry-paid gifts and meals be eliminated; that faculty should not join industry speaker's bureaus, that all faculty consulting with industry be strictly overseen by contract, that drug formulary committees be free of conflicted physicians, and that free drug samples be regulated by a voucher system…. I'd like to see a federal registry for reporting analogous to those of some states. I'd also like to see a congressional mandate to the Institute of Medicine of the National Academy of Sciences for studies that mirror those that called attention to medical errors.

We must put more pressure on both the profession and the industry. In my opinion, both have reneged on their ethical responsibilities for the care of the sick.

…

[I]f you look at the reports in the newspapers, it's been largely about the lack of disclosure. So people have made a lot about the fact that physicians have done various things and made various comments and have not disclosed their ties with industry, which could have influenced their opinions. The fact is that we must pay attention to a much more fundamental issue, and that is that disclosure is perhaps necessary in terms of identifying those who have conflicts of interest, but it is not sufficient, because disclosure doesn't solve the problem. The problem is the conflict, and disclosure doesn't solve the conflict.

THE HONORABLE SHARON TREAT, MAINE STATE REPRESENTATIVE: As of this month, at least 30 states have enacted laws or introduced legislation on one or more of the following topics: disclosing spending, as we've just heard; beefing up state authority to enforce misleading advertising and marketing rules; protecting privacy by restricting the marketing use of prescription data; regulating instant messaging and advertising in electronic prescribing software; regulating drug industry sales representatives' activities; establishing independent, evidence-based, detailing programs; and requiring disclosure and posting of clinical trials information.

…

There certainly is a strong role for federal government to take action in many of these areas. To begin with, just to shine a light on marketing practices, as this committee is doing, is of great value. There's also a need to have much stronger standards governing conflicts of interest, to take action to curb misleading marketing, and to require disclosure of payments and gifts, as well as of clinical trial data and other safety data. It would also, I need to stress, be a major step forward if the federal government would start by vigorously enforcing the laws already on the books which bar misleading advertising and off-label promotion, and if labeling standards and enforcement were not subject to negotiation with the industry.

That said, we do have concerns about laws which might preempt state authority to act, particularly in those cases where states are acting within their traditional regulatory and enforcement functions and have actually stronger state laws. States have a traditional and effective role in enforcing consumer protection and misleading advertising laws, protecting public health, regulating medical professionals, implementing Medicaid, and safeguarding the privacy of their citizenry. It would be a bad bargain to trade strong state laws, even if they're in place only on a patchwork basis, for weak federal laws that limit or prohibit state action.

States are passing laws because there is a regulatory and enforcement void. But public health issues need to be addressed, nonetheless, and they are taking action to do that. Congress should act, but it should partner with the states rather than preempt them.

DPC