Telecom giant AT&T is currently proposing a $39 billion buyout of T-Mobile. The purchase, according to the Department of Justice (DOJ), would have negative implications for the telecommunications market, so much so that the DOJ filed a civil antitrust lawsuit on August 31st to block the proposed acquisition, stating that it would “substantially lessen competition…resulting in higher prices, poorer quality services, fewer choices and fewer innovative products.” AT&T vowed to “vigorously contest” the matter. In addition to hiring 99 lobbyists and spending $11.7 million (not including fees for 40 lawyers and 15 consultants), numerous charities – after receiving donations from AT&T – wrote letters to the Federal Communications Commission urging them to approve the buyout.
The Center for Public Integrity’s investigation of the AT&T proposal highlights growing concern about “the marriage of lobbying and charitable efforts” as contributing to “influence peddling.” Influence peddling, which often involves a “payment” of some kind, refers to the use of one’s connections or influence to get favors or preferential treatment. By donating money to charities and gaining their favor, did the corporation use its influence to encourage its beneficiaries to lobby for the buyout? Did it peddle its influence to nonprofit organizations that needed funds?
Nonprofits that provide public services need resources, financial and otherwise. When corporations that are seeking to gain political and economic favor forge ties with nonprofits, it may or may not be win-win. Certainly, the $148 million AT&T donated through its corporate, foundation, and employee-giving programs in 2010 is a drop in the bucket compared to a $39 billion buyout and annual revenues of $114 billion. If the organizations receiving those funds then lobby on the company’s behalf, it is indeed a good investment. In turn, the nonprofits get some operating funds, but at what cost? Many of the AT&T organizations claimed that the donations they received did not influence their decision to lobby the FCC. Still, it’s not easy to bite the hand that feeds you, especially during an economic downturn.
The AT&T situation illuminates key issues when it comes to industry ties and nonprofits. As I write in my book Pink Ribbon Blues, the range of promotional materials that industry leaders use to sway public opinion about breast cancer and promote specific health behaviors is far-ranging, from Web sites to press releases, to participation or sponsorship of pink ribbon events, to direct-to-consumer advertising, to logos on pink merchandise. Corporations in the breast cancer industry spend billions each year to promote the cause while marketing their own revenue-producing solutions to the epidemic. There are numerous examples.
While profiting each year from the imaging technology used to diagnose breast cancer, General Electric boasts:
“Consumers can make a difference in the fight against breast cancer thanks to the new GE Breast Cancer Awareness cordless phone from Thomson. The company will support research and education for early detection by donating a percentage of the net sales of the phone to the National Breast Cancer Foundation. The product will feature the official pink ribbon memorializing Breast Cancer victims and survivors alike, and the GE brand logo has been changed to a matching pink.“
Just as General Electric pinks its logo to align with pink ribbon culture, ads for cancer drugs use the breast cancer brand to draw on the culture’s common themes. A 2002 ad for Arimidex in Ladies’ Home Journal (Oct, p. 99) features a woman in pink boxing gloves ready to face the opponent with feminine style and power. AstraZeneca’s full-page ad includes “questions you may want to ask” your doctor. Readers are advised to “Tear out this page. You may find it helpful when talking with your doctor at your next appointment.” An ad for Novartis Pharmaceutical’s product Femara (letrozole) states: “You had breast cancer. You had Tamoxifen. Now what?… Is there anything more you can do to increase your chances of staying cancer free?”
Drug companies spend billions of dollars each year on direct-to-consumer advertising to persuade people to “ask your doctor about [fill in the blank].” In 2008, DTCA for prescription products on television, radio, magazines and newspapers, and outdoor advertising venues totaled $4.4 billion, a 500 percent increase in spending since 1996. Drawing on the breast cancer brand and pink ribbon culture enables the industry to forge connections with consumers and supply the weapons of choice in the war against breast cancer. It doesn’t stop with the advertising.
The industry forges reciprocal relationships with key players in pink ribbon culture. Komen founder Nancy Brinker and General Electric Chairman and CEO Jeff Immelt announced a three-year partnership that includes $1 billion for research and development for “cancer detection and treatment technology,” and another $100 million to “find and fund ideas for better breast cancer diagnostics.” I imagine GE will design, manufacture, and distribute these diagnostics. Healthcare research analysts predict that the market for medical imaging equipment (not including services) is expected to thrive at a 7.6 percent compound annual growth rate.
In addition to its central role in National Breast Cancer Awareness Month as an original underwriter for the campaign, AstraZeneca is closely tied to a number of breast cancer nonprofits, including Susan G. Komen for the Cure. Komen receives a portion of its operating funds from each of its 122 affiliates, and the affiliates receive their contributions from the races and from individual and corporate donors. In the first 6 months of 2008, AstraZeneca’s financial reports listed $97,000 in contributions to several Komen affiliates for general support, fundraisers, and an awareness event for legislators. Is it any surprise that advertising for AstraZeneca would also show up at the races? AstraZeneca received the Komen Friend in the Fight Award in 2003, and in 2004 it launched a global breast cancer awareness campaign – “Redefining Hope and Beauty” – to spread the awareness (and Komen’s) message internationally. Is it possible for Komen, or any other corporate beneficiaries, to stay critically aware of the potential conflicts of interest that arise when a corporation markets to the very audience they are advocating for?
I regularly contemplate the role of money, marketing, and ethics. In April, Susan Hertzberg from Breast Cancer Action Montreal wrote an essay for the Pink Ribbon Blues Blog about how her organization keeps corporate conflicts of interest in check. In 2001 the BCAM board formalized a Policy on Corporate Contributions. The policy establishes three principles to guide BCAM’s corporate fundraising strategy. They are broadly elaborated in the policy statement, but briefly they are:
- BCAM will not accept financial support from corporate entities whose products or services are known to BCAM to include cancer diagnosis or treatment;
- BCAM advocates the precautionary principle (i.e., that calls for acting on the weight of the evidence that links environmental carcinogens to cancers rather than waiting for absolute proof of cause and effect);
- BCAM cannot endorse organizations or events that accept funding from sources unacceptable to BCAM, but is willing to cooperate when goals are similar.
Is it possible for a nonprofit to maintain its integrity and critical stance about an industry that profits from the very social problem it is trying to solve? Perhaps. But only if there are no strings attached, no influence peddling, and the corporations do not undermine the ultimate missions of the organizations. It seems to me that a strong policy on corporate contributions is a step in the right direction.