Wendell Potter: "My Apologies to Michael Moore and the Health Insurance Industry"

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In advance of my appearance with Michael Moore on Countdown with Keith Olbermann tonight on MSNBC (8 and 11 p.m. ET), I would like to offer an apology to both Moore and his arch enemy, the health insurance industry, which spent a lot of policyholder premiums in 2007 to attack his movie, Sicko. I need to apologize to Moore for the role I played in the insurance industry's public relations attack campaign again him and Sicko, which was about the increasingly unfair and dysfunctional U.S. health care system. (I was head of corporate communications at one of the country's biggest insurance companies when I left my job in May 2008.) And I need to apologize to health insurers for failing to note in my new book, Deadly Spin, that the front group they used to attack Moore and Sicko -- Health Care America -- was originally a front group for drug companies. APCO Worldwide, the PR firm that operated the front group for insurers during the summer of 2007, was outraged -- outraged, I tell you -- that I wrote in the book that the raison d'être for Health Care America was to disseminate the insurance industry's talking points as part of a multi-pronged, fear-mongering campaign against Moore and his movie. An APCO executive told a reporter who had reviewed the book that I was guilty of one of the deceptive PR tactics I condemned: the selective disclosure of information to manipulate public opinion.

Which Industry Was Really Behind "Health Care America?"

Well, shucks. Ignorance is no defense, I know, but no one at APCO ever told me, even when I was on the insurance industry's side, that Health Care America's first benefactor was Big Pharma. Here are the offending sentences, excerpted from the chapter entitled "The Campaign Against Sicko," in which I described a top-secret meeting of insurance company flacks -- including me -- where APCO and America's Health Insurance Plans (AHIP), the lobbying group for insurers, laid out the industry's strategy:

(AHIP's Mike) Tuffin and (APCO's Robert) Schooling said they had already begun recruiting conservative and free-market think tanks, including the American Enterprise Institute and the Galen Institute, as third-party allies. Those allies, they said, would be working aggressively to discredit Moore and his movie. They then mentioned an ally that most of us had never heard of, Health Care America. It had been created by AHIP and APCO for the sole purpose of attacking Moore and his contention that people in countries with government-run systems spent far less and got better care than people in the United States. The sole reason Health Care America exists, they said, was to talk about the shortcomings of government-run systems.

I learned a few days ago from Jack O'Dwyer, longtime watchdog of the PR profession and publisher of O'Dwyer's PR Daily, that an APCO executive told him I had failed to disclose that APCO had originally set up Health Care America in 2006 with money primarily from big drug companies. Big Pharma was worried at the time that drug makers would be Moore's main target in the movie. Thinking ahead, they feared that being vilified in Sicko would increase the odds that lawmakers would cast them as the chief villain when the health care reform debate got underway. O'Dwyer blogged last Tuesday that, "Just about every known evil practice that PR has ever engaged in is described in 'Deadly Spin.' " He noted that I had mentioned APCO -- the second biggest firm in the O'Dwyer ranking, with $100.3 million in fees in 2009 -- several times in the book. APCO and AHIP must be paying a media monitoring service to alert them immediately when I am mentioned in the media, as they did for Michael Moore and Sicko three years ago. Within hours, APCO Senior Vice President William Pierce sent O'Dwyer an email to challenge my credibility because of my failure to disclose Health Care America's original incarnation. He's right --partially. I should have pointed out in the book that APCO repurposed Health Care America for the insurance industry and other special interests who were concerned that Sicko might lead to reforms that would threaten their profits, too. I would have disclosed it if I had known about it. Unlike PR people who practice the dark arts of PR, I had no intention of misleading anyone.

Now, Even More Info About "Health Care America"

After hearing from O'Dwyer, I discovered even more about Health Care America than I had recalled. I came across a couple of interesting articles and a press release from 2006 that Pierce had sent to the media. (He was listed as the organization's media contact, although he was an employee of APCO during the entire brief existence of Health Care America. If you called the number on the press release, you would have reached Pierce at his APCO office.) I also found Health Care America's federal tax returns for 2006 and 2007, which were helpful in understanding just how much of a front group it really was. In a press release dated April 6, 2006, Pierce announced that Health Care America -- which he described as a non-partisan, non-profit organization --had "opened for business as a champion for common-sense solutions to improving our health care system without furthering government control."

The Old PR Dodge and Weave

In one of the hardest-working paragraphs of spin I've come across in a long time, the release went on to quote Sarah Berk, the outfit's executive director, as saying: "We will promote access, choice, innovation, quality and competition in the U.S. health care system. And we will highlight how government-controlled systems around the world limit payment choice, stifle innovation and force thousands to wait for health care services in the U.S." (Note to Ms. Berk: Please make plans now to join me next July at the 11th annual Remote Area Medical Free Health Care Expedition at the Wise County, Virginia Fairgrounds. If you come early enough, you can help other volunteers scrub and sanitize the animal stalls where doctors and nurses treat the thousands of patients who wait for a year to get the care they need, but cannot afford in the United States of America. Be forewarned, however. The experience might force you to consider another line of work, as it did for me when I went to Wise County in 2007. I knew then that my days as a spinmeister for the insurance industry were numbered.) The release did not disclose that Ms. Berk had recently left the American Hospital Association where, according to a story in Roll Call, she was director of "grassroots" advocacy and federal relations. Roll Call also reported that she earlier had "worked on health issues" for former Sen. Rick Santorum (R-Pennsylvania). So what were the common-sense solutions Health Care America promised to champion? Well, according to Roll Call, Ms. Berk "declined" to talk about them. "We're not there yet," Roll Call quoted her as saying. "We're not here to get in the weeds on issues." That was not the only declining she did that day. According to Roll Call, "Berk declined to name any specific companies or groups that were backing (Health Care America)." Oh, well. Roll Call did disclose a tidbit that the Pierce's press release did not: "Health Care America is represented by public affairs firm APCO Worldwide and is currently leasing office space from APCO." One has to wonder how much space APCO's front group leased from APCO. Berk was identified as the only employee, although she was quoted in Roll Call as saying that she planned to hire at least one other person within three months.

Undisclosed Sources of Income, Mysterious Expenditures and "Virtual Offices"

According to the Form 990 Health Care America filed with the IRS for 2006, it took in $822,298.00 from undisclosed sources. Of that, $142,500 was paid out in compensation, presumably to Ms. Berk, and $9,000 was spent for "occupancy." Accounting and legal fees totaled nearly $47,000. By far the biggest expenditure -- $240,000 -- was for "consultant services." One has to wonder how much of that went to APCO. Health Care America's Form 990 for 2007 disclosed that Ms. Berk was even more handsomely rewarded for her work during the second and apparently final year of the organization's existence (I could not find a Form 990 for any subsequent year), one presumes because she apparently never got around to hiring anyone else and consequently had to work an average of 60 hours a week, or so she claimed. She was paid $197,917 in 2007. Legal and accounting fees skyrocketed to more than $80,000, and the amount spent for "occupancy" jumped to $15,870 in 2007. One has to wonder who got that $15,870. In the 2006 Form 990, Ms. Berk listed her office address as 1455 Pennsylvania Avenue, N.W., Suite 400, Washington, D.C. 20004. That is not where APCO is located. In fact, that is the address of a "virtual office" at the Willard Office Building. Well, of course. How appropriate. Why would a front group need a real office? The Web site for the virtual office at the Willard lists these amenities: a prime business address; a "live" receptionist; a lobby greeter, a business support center, a client drop-off/pick-up point; and mail forwarding, all for $125 a month. That's a heck of a deal for an "office" in the heart of arguably the most important city on the planet. Note, however, that you will have to pay extra to have your organization's name in the lobby directory and to actually use a real office or conference room. You can rent a real office for $10-$35 an hour, which for some reason reminds me of the fleabag motels I've heard about that rent rooms by the hour. Make no mistake, though, the Willard is no fleabag. Here's a fun fact, noted on the Web site for Suite 400:

The Willard Office Building is nestled between the famous Willard Intercontinental Hotel, where the term 'lobbyist' was coined, and the Occidental Restaurant, where D.C.'s power brokers negotiate deals over fabulous American fare.

Go ahead. Google the address. You'll find that oodles of organizations claim to occupy Suite 400. Let's hope that all those folks don't show up for work on the same day.

Operating Front Groups Isn't Criminal, Just Shameful

While the Forms 990 disclosed some interesting information, they didn't disclose the details that would be most helpful in determining who is really behind Health Care America. The government doesn't require such disclosure, even though front groups play a major role in persuading people to think the way the groups' financiers want them to think and to do what they want them to do, such as disrupting Congressional Democrats' town hall meetings. The ultimate goal, of course, is to influence public policy. "Where's the felony Potter is saying took place?" Pierce asked O'Dwyer. There was no felony (that I have personal knowledge of), and I never said that anyone at APCO had committed one. That's the problem. Setting up and operating front groups -- and not having to disclose who is behind them -- is shameful and, according to the code of ethics of the Public Relations Society of America, unethical. But it's perfectly legal. So APCO, I've apologized for failing to disclose something I didn't know when I wrote Deadly Spin. Now it's your turn. How about you apologizing to the American people for the role you played in making it necessary for me to write the book in the first place. P.S.: I just received a message from an APCO spokesperson who wrote to chastise me for writing that the insurance industry would "push Moore off the cliff" in a worst-case scenario. "You know there was never any suggestion to do anyone personal harm," she wrote. Yes, I knew that and I wrote that. She should read the book. Here's what I wrote on page 38 of the chapter about Sicko:

Tuffin and Schooling wrapped up their presentation with a 'worse-case scenario' plan. If Sicko showed signs of being as influential in shaping public opinion on health care reform as An Inconvenient Truth had been in changing attitudes about climate change, then the industry would have to consider implementing a plan 'to push Moore off the cliff.' They didn't elaborate, and no one asked what they meant by that. We knew they didn't mean it literally -- that a hit man would be sent to take Moore out. Rather, an all-out effort would be made to depict Moore as someone intent on destroying the free-market health care system and with it, the American way of life.

The APCO spokesperson denied the firm had done research on Moore's family and said APCO "did not attempt to suppress turnout for the movie." I'll let the PR plan, which I first discussed on Bill Moyers Journal in July 2009, speak for itself. Moyers' staff obtained copies of May 2007 and June 2007 versions of the PR plan developed by APCO and AHIP. To view the interview and PDF versions of the documents, click this link. P.P.S: I also want to apologize to Moore for not disclosing until now that, while I was still working for the insurance industry, I traveled as an industry spy to his hometown of Bellaire, Michigan, to attend the official U.S. premiere of Sicko on June 16, 2007. Moore and I actually met that day, although he doesn't know it. (I didn't tell him who I was or who I worked for). The picture accompanying this story, taken at a pre-screening reception by another movie-goer, shows me on Moore's left and my son, Alex, on his right. Alex, who has always been a big fan of Moore's, traveled with me on the reconnaissance mission. Moore even autographed a Sicko poster for Alex. It's quite a memento.