Cronyism: Obama Administration Showers Your Tax Dollars on Shifty Wall Street Operator and Liberal Donor
In a corrupt deal, the Obama administration is paying a shifty Wall Street operator’s firm an extravagantly inflated price for an unneeded vaccine, at a cost to taxpayers of hundreds of millions of dollars.
The Los Angeles Times has taken note:
Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work. Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor. When Siga complained that contracting specialists at the Department of Health and Human Services were resisting the company’s financial demands, senior officials replaced the government’s lead negotiator for the deal, interviews and documents show. When Siga was in danger of losing its grip on the contract a year ago, the officials blocked other firms from competing. Siga was awarded the final contract in May through a “sole-source” procurement in which it was the only company asked to submit a proposal. The contract calls for Siga to deliver 1.7 million doses of the drug for the nation’s biodefense stockpile. The price of approximately $255 per dose is well above what the government’s specialists had earlier said was reasonable, according to internal documents and interviews.
This is insane. Smallpox was totally eradicated years ago. There are maybe two lab samples left in the world, and they are under high security in the U.S. and Russia. If someone can break U.S. or Russian security, why not steal a nuke instead? How would a terrorist weaponize it? Why would a sovereign state want to risk infecting itself along with others? So it makes little sense to waste money on this. Ron Perelman is a horribly shifty individual, who has made a lot of money at the expense of minority shareholders and credulous bondholders. His ability to get purportedly distinguished board members of his companies to approve rank abuse of stakeholders in his entities is amazing. This political payoff to Perelman can’t be explained by anything other than rank cronyism.
Meanwhile, lawmakers are allegedly trading stock on inside information.
Government favors for politically-connected companies have risen, as have government regulations designed to destroy their competitors. The bigger the government gets, the more favors it hands out, and the more businesses it shakes down for campaign contributions, as The Washington Examiner‘s Tim Carney has noted. Companies increasingly lobby (and make donations to powerful politicians) in order to get them to drop proposed legislation that would harm the companies — like a new “tax” or “sales restriction,” or a new law making it easier for trial lawyers and state attorney generals to sue the company in question. Government officials use the threat of such legislation to raise millions in campaign cash for their allies.
Companies that lobby are getting so many government favors — and avoiding so much political retaliation from administration officials and allied lawmakers — that companies that hire lobbyists have outperformed companies that don’t by an annual rate of 11 percent per year since 2002, according to data from the investment-research firm Strategas. The advantage reaped by firms that lobby has been even more pronounced since 2008, says The Economist.
Newsweek, which provided fawning coverage of the Obama administration in the past, is now finally reporting on how “Obama Campaign Backers and Bundlers Were Rewarded With Green Grants and Loans.” And The Washington Post recently reported on the long history of failed government energy projects even before the Solyndra scandal:
Solyndra, the solar-panel maker that received more than half a billion dollars in federal loans from the Obama administration only to go bankrupt this fall, isn’t the first dud for U.S. government officials trying to play venture capitalist in the energy industry. The Clinch River Breeder Reactor. The Synthetic Fuels Corporation. The hydrogen car. Clean coal. These are but a few examples spanning several decades — a graveyard of costly and failed projects. Not a single one of these much-ballyhooed initiatives is producing or saving a drop or a watt or a whiff of energy, but they have managed to burn through far more more taxpayer money than the ill-fated Solyndra. An Energy Department report in 2008 estimated that the federal government had spent $172 billion . . . What does Washington have to show for these investments?
The future failure of Solyndra and other massive government boondoggles backed by Obama administration officials was so obvious that a White House advisor privately recommended firing the Energy Secretary, who had brushed aside the concerns of civil servants in order in order to shower taxpayer money on these failed schemes. This recommendation was ignored, enabling hundreds of millions more to end up in the pockets of companies tied to Obama donors. An ABC News story about this can be found here.