Industry Cash Flowed To Drafters of Reform

As liberal protesters marched outside, Sen. Max Baucus sat down inside a San Francisco mansion for a dinner of chicken cordon bleu and a discussion of landmark health-care legislation under consideration by his Senate Finance Committee.

At the table on May 26 were about 20 donors willing to fork over $10,000 or more to the Democratic Senatorial Campaign Committee, including executives of major insurance companies, hospitals and other health-care firms.

"Most people there had an agenda; they wanted the ear of a senator, and they got it," said Aaron Roland, a San Francisco health-care activist who paid half price to attend the gathering. "Money gets you in the door. The only thing the other side can do is march around and protest outside."

As his committee has taken center stage in the battle over health-care reform, Chairman Baucus (D-Mont.) has emerged as a leading recipient of Senate campaign contributions from the hospitals, insurers and other medical interest groups hoping to shape the legislation to their advantage. Health-related companies and their employees gave Baucus's political committees nearly $1.5 million in 2007 and 2008, when he began holding hearings and making preparations for this year's reform debate.

Top health executives and lobbyists have continued to flock to the senator's often extravagant fundraising events in recent months. During a Senate break in late June, for example, Baucus held his 10th annual fly-fishing and golfing weekend in Big Sky, Mont., for a minimum donation of $2,500. Later this month comes "Camp Baucus," a "trip for the whole family" that adds horseback riding and hiking to the list of activities.

To avoid any appearance of favoritism, his aides say, Baucus quietly began refusing contributions from health-care political action committees after June 1. But the policy does not apply to lobbyists or corporate executives, who continued to make donations, disclosure records show.

Baucus declined requests to comment for this article. Spokesman Tyler Matsdorf said the senator "is only driven by one thing: what is right for Montana and the country. And he will continue his open process of working together with the president, his colleagues in Congress, and groups and individuals from across the nation to get this legislation passed."

Baucus's fundraising prowess underscores the enduring political strength of the health-care lobby, which led all other sectors in donations to federal candidates during the last election cycle and has shifted its giving to Democrats as the party has tightened its control of Congress.

The sector gave nearly $170 million to federal lawmakers in 2007 and 2008, with 54 percent going to Democrats, according to data compiled by the Center for Responsive Politics, which tracks money in politics. The shift in parties was even more pronounced during the first three months of this year, when Democrats collected 60 percent of the $5.4 million donated by health-care companies and their employees, the data show.

Many of these contributions have been focused on Baucus, Charles E. Grassley (R-Iowa) and other senators in the moderate camps of their respective parties, whose votes could prove crucial in a final health-care reform deal, as well as the leaders of five key committees leading the debate. Grassley, the Finance Committee's ranking Republican, received more than $2 million from the health and insurance sectors since 2003. House Ways and Means Chairman Charles B. Rangel (D-N.Y.) took in $1.6 million from the health sector and its employees over the past two years; ranking Republican Dave Camp (Mich.) received nearly $1 million.

But Baucus, a senator from a sparsely populated and conservative Western state who is serving his sixth term, stands out for the rising tide of health-care contributions to his campaign committee, Friends of Max Baucus, and his political-action committee, Glacier PAC. Baucus collected $3 million from the health and insurance sectors from 2003 to 2008, about 20 percent of the total, data show. Less than 10 percent of the money came from Montana.

Top out-of-state corporate contributors included Schering-Plough, New York Life Insurance, Amgen, and Blue Cross and Blue Shield; individual executives such as Richard T. Clark, chief executive and president of drugmaker Merck, have also made regular donations. Most of these companies, particularly major insurers, strongly oppose a public insurance option, which is favored by President Obama and top House Democrats but has not received support from Baucus's committee.

Baucus is a longtime centrist in the Democratic caucus, and his committee chairmanship has made him a key broker in the health-reform debate. Many former Baucus staff members, including two chiefs of staff, lobby on behalf of the pharmaceutical industry and other health-care players and have been closely involved in negotiations on the legislation.

John Jonas, a Patton Boggs health-care lobbyist who has attended a Baucus fly-fishing event and other fundraisers, said the Montana senator is "key to getting anything done" when it comes to health-care legislation.

"This is not an overwhelmingly liberal Congress, and it's certainly not a liberal Senate," said Jonas, whose clients include Bristol-Myers Squibb, Pfizer and Northwestern Mutual. "I think Max is uniquely situated to try to accomplish that, because he's more of a centrist and moderate Democrat than others are."

But Jerry Flanagan, a health-care analyst with Consumer Watchdog, a California-based advocacy group, said the tide of campaign contributions amounts to "a huge down payment" by companies that expect favorable policies in return. "That is the cold reality of big-money politics," he said.

Baucus won easy reelection in the fall, but he has continued to hold fundraisers since then. In addition to the fly-fishing event, he held his "Eighth Annual Ski and Snowmobile Weekend" in Big Sky in February and celebrated the start of his sixth term with a $10,000-a-table dinner at the Washington Court Hotel later that month. Aides say another fundraiser scheduled for July 7 at Bistro Bis in Capitol Hill was scrapped.

Baucus's office declined to provide attendance and donation details about his fundraising events, and federal records laws do not require such disclosures. Starting in June, aides say, Baucus adopted an internal office policy to refuse contributions from health-care PACs and to continue doing so until after Congress passes reform legislation.

But new Federal Election Commission documents filed last week show that individual lobbyists and others with health-care connections continued to make contributions to Baucus committees throughout June. Examples from Baucus's Glacier PAC include $5,000 from the Independent Insurance Agents and Brokers of America and $2,500 from lobbyists with U.S. Strategies, which represents numerous health-care firms. Overall, half of the $110,000 in donations to the PAC from April to June came from health-care firms and lobbyists, including Schering-Plough, Medtronic and New York Life.

Craig Holman, government affairs lobbyist for the Public Citizen advocacy group, said the continued fundraising by Baucus during the health-care debate is "very troubling."

"He's doing all this fundraising right in the middle of this effort to mark up a bill," Holman said. "When you put these events close to matters concerning these lobbyists, clearly it's a signal. You are expected to show up with a check."

Baucus and his aides strongly dispute any assertion that campaign contributions have an impact on the senator's policy views and proposals. Aides say he has frequently backed policies opposed by health-care companies, including support for greater availability of generic drugs, allowing drug imports from Canada and cutting payments to the Medicare Advantage plan.

During an interview earlier this year with the Missoulian newspaper, Baucus said that "no one gets special treatment." He added: "Your word is your bond back there."

Research editor Alice Crites contributed to this report.

By Dan Eggen