Rachel Maddow: Blue Dog Mike Ross Pocketed Over $1 Million from Pharmacy Chain USA Drug
By Heather Wednesday Sep 23, 2009 7:00am
I wonder what the voters in Ross' district are going to think as this news comes out. From The Politico's Propublica: Mike Ross raises eyebrows with healthy haul:
Arkansas Rep. Mike Ross — a Blue Dog Democrat playing a key role in the health care debate — sold a piece of commercial property in 2007 for substantially more than a county assessment and an independent appraisal say it was worth.
The buyer: an Arkansas-based pharmacy chain with a keen interest in how the debate plays out.
Ross sold Holly’s Health Mart in Prescott, Ark., to USA Drug for $420,000 — an eye-popping price for real estate in a tiny train and lumber town about 100 miles southwest of Little Rock.
“You can buy half the town for $420,000,” said Adam Guthrie, chairman of the county Board of Equalization and the only licensed real estate appraiser in Prescott.
But the $420,000 that USA Drug paid for the pharmacy’s building and land was just the beginning of what Ross and his wife, Holly, made from the sale of Holly’s Health Mart. USA Drug owner Stephen L. LaFrance Sr. also paid the Rosses $500,000 to $1 million for the pharmacy’s assets and paid Holly Ross an additional $100,000 to $250,000 for signing a noncompete agreement. Those numbers, which Mike Ross listed on the financial disclosure reports he files as a member of Congress, bring the total value of the transaction to between $1 million and $1.67 million.
And that’s not counting the $2,300 campaign contribution Ross received from LaFrance two weeks after the sale closed.
Holly Ross remains the pharmacist at Holly’s Health Mart under USA Drug. Neither she nor her husband agreed to speak with ProPublica for this story.
Mike Ross declined to be interviewed by both The Politico and The Rachel Maddow Show. He did however issue this response to The Politico:
“This style of gotcha politics is why many folks are fed up with Washington and it is a shame serious debate on reform has, once again, fallen off course. Instead of having civil dialogue over true and substantive disagreements about reforming our broken health care system, outside groups are trying to taint a completely legal and respected small business that my wife and I worked hard for 14 years to establish.
“When we sold our family business, Holly's Health Mart, over two years ago, we reported and disclosed all the transactions required by the House Ethics reporting requirements. I also accurately reported the property on my personal financial statement in 2007, when I sold the business. I sold it for the amount that I have indicated it was worth on every personal financial statement since 1999. I spent $316,000 in 1998 constructing the building that houses the pharmacy and sold it for $420,000 in 2007 – the annual return on investment is less than four percent. I would have made more during that time period if I had invested in a certificate of deposit (CD).
“I have never done a favor for the buyer, who I have only met a few times in my life. The buyer did not just buy brick and mortar; he bought a successful, trusted, centrally-located and profitable pharmacy in my hometown. In two of my closest races, the buyer supported my Republican opponent in both of them. He has since supported my campaign.
“I welcome any debate and review on my voting record and my positions on the issue. I have said all along that we need health care reform in this country; in fact, I ran for Congress to address our broken system. It is for these reasons why I supported health care reform legislation in the Energy & Commerce Committee in order to ensure that we could move forward with the legislative process and give Members of Congress time to read the bill and talk it over with their constituents. We need common sense health care reform that reduces costs, increases access, forces insurance companies to cover pre-existing conditions and protects patient choice. My ultimate goal has always been to pass a health care reform bill that will offer the kind of reforms I can support – a common sense plan that reflects Arkansas values.”
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would this be labeled a smear?
More like a skid mark.
I'm confused. Is it a requirement that you be a crook to become a politician or is it a requirement that you be a politican to become a crook?
As my mother would say "It's 6 of one and half of dozen of another."
Duke Cunningham go to prison for doing the same thing???
Pretty much but that was back in the olden days when laws and rules mattered. We have evolved now into a time when if you can get away with something, you get extra points.
Brilliant reporting.
She took it off Politico who took it off Propublica.
FYI: http://www.usadrug.com/about.htm
She did credit Politico...
Thanks to Rachel for bringing it to teevee!
My objection is to characterizing the act of repeating someone else's work in reporting what is a matter of public record as "brilliant reporting."
this kind of exploitation has been happening forever.
In case no ones noticed.
The story was co-published at Propublica and Politico.
Politico credits Propublica as the source.
Politico published a response by Ross here
Frederick J. Ryan Jr., Politico President and CEO was on staff for Ronald Reagan.
The New York Times ran a piece on Politico 2 weeks before it started publishing here
Glenn Greenwald 05/03/07: The Politico: Exhibit A for our broken political press here
and 05/04/07: Who funds and runs the Politico? here
I always am cautious to link to Wiki, because of the obvious caveat, it is open source and you must keep your grains of salt handy.
That said, Wiki on ProPublica here
Get used to it because it's cut throat economics now down here in Sheepledom.
Violation of the public trust should be a capital offense.
wish . . (upon a star)
and Ross has a deplorable record on health care, but the journalism here is as sleazy as the act it purports to "uncover" from public records.
from the Politico: "The issue is whether the Congressman received more on the sale of his building than someone without his power and influence would have received for selling this building."
Read more: http://www.politico.com/news/stories/0909/274...
I agree that this is the problem... based on who he was (Rep. Ross) he was paid more money than if he'd just been Joe Blow (I love that name!). And therein lies the problem for Rep. Ross. He can't deny it; he's actually agreed that he was paid more than someone else would have been... I think that's a big problem for him legally, if not morally.
You state:
"he's actually agreed that he was paid more than someone else would have been... I think that's a big problem for him legally, if not morally."
I would agree with you if your statement was true. But I cannot find anywhere he "actually agreed." Can you?
"As we read his statement, Rep. Ross does not deny that he received significantly more than an arms-length fair-market price for the building—on top of the very considerable sums he and his wife received for selling and continuing to run the business.”
Rep. Ross states that the buyer bought more than “brick and mortar” for their $420,000, that they also bought “a successful, trusted, centrally-located and profitable pharmacy in my hometown.” But, as the story noted, the buyer paid an additional $500,001 to $1 million for the business, as well as $100,001 and $250,000 for agreement not to compete against the new owners. Those payments brought the total value of the transaction to between $1 million and $1.67 million."
Read more: http://www.politico.com/news/stories/0909/274...
Politico framed the question in their second article after he responded to their first article then said he "does not deny it." That is a piece of journalistic sleaze.
I think public trust went out with dial phones. The public has trouble trusting just about anyone in politics these days.
resources and pay congressmen to represent us!
What? Oh; never mind.
Look at the Big run up happening right now it's party time dude!
would someone please tell me why this is not a fraud committed against the taxpayer?
can politicians not be charged with breach of the public trust?
.
But I suppose one could argue that he misrepresented a material fact when he campaigned as a representative of the people when in fact he was a representative of this corporation or what ever. And that misrepresentation was made intentionally to induce the people to vote for him on reliance of his misrepresentation, and that the reliance was to the people's detriment as they elected someone who did not represent their interests.
I love it when the left jumps to conclusions like the right.
It would be a MASSIVE, MASSIVE, as-in-no-court-in-it's-right-mind-would-buy-MASSIVE stretch of an argument that I just put together really for shits and giggles.
before he was elected to Congress. He sold the business in 2007 and was re-elected in 2008.
Shitting and giggling are important, but not generally considered part of the rational thought process.
Buying an asset from a public official for ridiculously more than fair market value is shady, at best. If a quid pro quo can be demonstrated then it's bribery. Unfortunately, proving the quid pro quo usually requires either a wire-tap, a discovered document or someone turning state's evidence.
However, I would suspect that this sort of action would put one be a violation of a House Ethics rule.
Why don't you dig into the story and explain it to us jump-to-conclusions types. After all, just because a company (over)pays a Policiian 1.6 million dollars, and he votes in their favor, doesn't HAVE to mean it was a type of bribe.
But it is quacking awfully loud!
consciousness. It's about money a deals a deal thank you. Saudi Arabia could care less if they sell oil to us or our enemies they want the money. Adolph Hitler needs raw materials for something?
Huge tonnage? Nice let's cut a deal we'll supply him business is business!
Call Ross what he really is, a real Reslug in sheepskin and selling out the people who put him office, just for huge Drug Co. payoffs.
Vote the crook out of office, since we desperately need to clean up Washington DC. of these dirty rats.
now. Very rambling and almost incoherent, but interesting to watch...
a really bad traffic accident you can't take your eyes off of?
commercial...
:)
All about corruption, then why aren't outing crooked politicians like this? Oh wait...
... FUCKED!
has anyone compared the purchase of this pharmacy to any other similar purchase of a pharmacy by a competitive chain. All we know is the Rosses sold a local business to a home state based chain at a profit, which included a real estate sales price above local tax appraised values. Didn't some raise objections to Obama's home purchase based on value differentials?
If USA Drug got some benefit from actions taken by Ross, or if they were a front for someone else, like a pharmaceutical manufacturer, or a subsidiary of an Health Insurance company, you may have a big story.
The title of the article at Propublica is "Rep. Mike Ross Raises Eyebrows With Healthy Haul." Raises eyebrows is all. It does not say Ross committed any crime or fraud.
Response to Ross from Propublica states:
Rep. Ross states that the buyer bought more than “brick and mortar” for their $420,000, that they also bought "a successful, trusted, centrally-located and profitable pharmacy in my hometown." But, as the story noted, the buyer paid an additional $500,001 to $1 million for the business, as well as between $100,001 and $250,000 for agreement not to compete against the new owners. Those payments brought the total value of the transaction to between $1 million and $1.67 million.
It seems odd that Holly would still be running the place after they sold it to a pharmacy competitor. Also, they sold it to a guy who voiced his concerns about health care reform in the Arkansas Democrat-Gazette:
"Universal health care will ruin our health care in America," LaFrance told the reporter. "There'll be long lines, they won't be able to get treated, potential doctors will be afraid to go into medical school, there will be an outflux of doctors -- in my opinion. It's not broke and don't fix it."
Describing the drug industry as "very big business," he said the high prices charged for prescription drugs are possible only because insurance companies and the government underwrite about 95 percent of the cost.
"So when the customer pays $7, $10, $15, $20" for a prescription co-pay, "it doesn't hurt him. They don't realize that the insurance company is paying the other $125. That's kind of a double-edged sword; if it wasn't for insurance, the American pharmaceutical industry wouldn't be able to charge the prices it charges today, because the public wouldn't put up with it," LaFrance told the Democrat-Gazette.
"Our sales are higher, because it affects the top line of sales," he added. If the government doesn't interfere, there's "nothing but good days ahead."
1) The Propublica headline is not the headline here. The use of "Pocketed" and "over 1 million" are, at the least, implicative of
2) wrongdoing, as voiced by a number of commenters that the transaction is crooked, corrupt, fraudulent.
You say "it seems odd Holly would still be running the place after they sold it." I don't know how odd it is. Retention of current management and non competition clauses are not unusual in business acquisitions. Are they overvalued here? I do not know. The article does not address the issue.
The biggest contributor to the total dollar amount of this transaction, from $500,000 to $1,000,000 is the amount USA Drug paid for the assets (read inventory) of the business. Is that out of line? I have no idea. The article does not state that. It does not even address it. The range is caused by the Congressional disclosure form category from which it is drawn.
There is no doubt that the owner of the chain which bought the Ross pharamacy sounds like a right wing nut on the health care issue. Ross points out that when he had Republican opposition, USA Drug owner La France contributed to his opponent. I would hate to have my political views attributed to people from whom I purchased property or vice versa.
There could be serious criminal and ethical problems in this transaction. There could be nothing out of the ordinary. I just don't think the conclusions some reach are justified. An eyebrow can be lowered with the same ease it is raised.
"So when the customer pays $7, $10, $15, $20" for a prescription co-pay, "it doesn't hurt him. They don't realize that the insurance company is paying the other $125.....," LaFrance told the Democrat-Gazette.
And I suppose the Insurance Companies CEO's are paying the company share out of the family inheritance? More like your family inheritance. LG: Life is good. Keep shoveling those exorbitant premiums into the hopper.
tool to the curb!!! This guy is selling out his own people for the corporations. I'm glad he got snagged and I'm looking forward to watching him get voted out of office.
Great job Rachel :)
I think it's, well, interesting that a drug company chose to pay 420 thousand dollars for a drug store.
Just sayin'.
The issues are:
1) transparency of politicians' financial dealings
2) influence of financial dealings on politicians
3) violation of public trust & responsibility by politicians
Every politician's complete financial records should be published on the web and updated daily including bank balances, deposit and payment records, stock portfolios and transactions, etc. for all accounts including joint, corporate, PAC, campaign, etc.
Yup! The right is going nuts on this one the story from another sight, she didn't do it herself, duh! she got the story OUT and she REPORTED the FACTS oops, that isn't the way the Moron at fox noise or the MSM do it.
Keep up the good work Rachael.
A Prescott, AK sale between $1 million and $1.67 million....? I have no question about the financial reporting of the sale but I do wonder about the sale:to whom and the deals in the whole package. Really wonder.
Isolate and attack. How many blue dogs are there?
Not enough to protect themselves if this keeps up, I would warrant.
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