Obama administration attempting to force out CEO over marketing violations

posted at 1:35 pm on April 26, 2011 by Ed Morrissey

According to the Wall Street Journal, the Obama administration has launched an effort to remove a CEO in a private-sector pharmaceutical firm as punishment for violations in marketing laws.  The Department of Health and Human Services notified Forest Laboratories that it plans to blacklist CEO Howard Solomon from doing any business with the federal government, a status that would effectively lock out Forest from any government contracting:

A government attempt to oust a longtime drug-company chief executive over his company’s marketing violations is raising alarms in that industry and beyond about a potential expansion of federal involvement in the business world.

The Department of Health and Human Services this month notified Howard Solomon of Forest Laboratories Inc. that it intends to exclude him from doing business with the federal government. This, in turn, could prevent Forest from selling its drugs to Medicare, Medicaid and the Veterans Administration. If the government implements its ban, Forest would have to dump Mr. Solomon, now 83 years old, in order to protect its corporate revenue. No drug company, large or small, can afford to lose out on sales to the federal government, a major customer.

The campaign against drug-company CEOs is part of a larger Obama administration effort to pursue individual executives blamed for wrongdoing rather than simply punishing companies. The government has tried to prosecute Wall Street executives in connection with the 2008 financial crisis, but with limited success.

The Health and Human Services department startled drug makers last year when the agency said it would start invoking a little-used administrative policy under the Social Security Act against pharmaceutical executives. This policy allows officials to bar corporate leaders from health-industry companies doing business with the government, if a drug company is guilty of criminal misconduct. The agency said a chief executive or other leader can be banned even if he or she had no knowledge of a company’s criminal actions. Retaining a banned executive can trigger a company’s exclusion from government business.

In other words, the government has decided to arbitrarily decide on punishment without any due process in regard to the individuals involved.  The Obama administration wants the power to dictate to the private sector who can and cannot run firms that do business with Washington. I’m not sure even Ayn Rand predicted that in Atlas Shrugged.

It’s not difficult to see where this will lead.  Firms of insufficient political correctness — or insufficiently supportive of the President and his political cronies — can expect to get the Solomon treatment.  Those that pay homage to the agenda of the ruling class, or pay cash to its campaigns, will almost certainly get a pass.

Think that’s an exaggeration?  Contrast the HHS treatment of Howard Solomon to that of Sacramento Mayor Kevin Johnson, who was found personally liable for fraudulent handling of federal funds.  Did the Obama administration cut off the city of Sacramento from further federal aid because of that status?  Not exactly, as Byron York explained at the time:

Johnson, now the mayor of Sacramento, California, started a non-profit organization called St. Hope. The group’s mission, according to its website, is “to revitalize inner-city communities through public education, civic leadership, economic development and the arts.”  As part of its work, St. Hope received a grant of about $850,000 from AmeriCorps.

Last year, Walpin began an investigation of how Johnson’s group spent the money.  According to the Associated Press, “[Walpin] found that Johnson, a former all-star point guard for the Phoenix Suns, had used AmeriCorps grants to pay volunteers to engage in school-board political activities, run personal errands for Johnson and even wash his car.” Walpin asked federal prosecutors to investigate.  In April, the U.S. attorney in Sacramento, a Bush holdover, declined to file any criminal charges in the matter and also criticized Walpin’s investigation.

That might suggest that St. HOPE was OK, and it was Walpin who was in the wrong.  But at the same time prosecutors decided not to file any charges against St. HOPE, the U.S. attorney’s office also entered into a settlement with St. HOPE in which the group also agreed to pay back about half of the $850,000 it had received from AmeriCorps.

In his letter to the president, Grassley defended Walpin’s performance.  “There have been no negative findings against Mr. Walpin by the Integrity Committee of the Council of the Inspectors General on Integrity and Efficiency (CIGIE), and he has identified millions of dollars in AmeriCorps funds either wasted outright or spent in violation of established guidelines,” Grassley wrote.  “In other words, it appears he has been doing his job. ”

The bottom line is that the AmeriCorps IG accused a prominent Obama supporter of misusing AmeriCorps grant money.  After an investigation, the prominent Obama supporter had to pay back more than $400,000 of that grant money.  And Obama fired the AmeriCorps IG.

This administration follows the rule of whim, not of law.  Congress needs to look into this thuggish attempt to bully Solomon out of his job — and they should take another look at the Johnson/Walpin case while they’re at it.


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More evidence in support of the assertion that the government has too much of our money, and that it should be taken away. Politicians as a class should be trusted only with the bare minimum required to achieve a very narrow set of objectives. Otherwise, this kind of thing will inevitably ensue.

Take the money away!!!

mr.blacksheep on April 26, 2011 at 5:27 PM

This administration has gone beyond scaring me – I’m petrified.

gophergirl on April 26, 2011 at 1:51 PM

We should all be afraid. What new obscenity will failbama decree tomorrow?

dogsoldier on April 26, 2011 at 5:27 PM

Il Duce!

davo on April 26, 2011 at 5:33 PM

Can someone explain to me how this differs from what the Nazis did?

No, You can’t.

ahem on April 26, 2011 at 6:38 PM

The Obama administration wants the power to dictate to the private sector who can and cannot run firms that do business with Washington.

And if they are successful, what next? Why stop at CEO’s? Why not individual supervisors, managers or employees who contribute too much to a particular party, or advocate a little too much for conservative causes on their free time, or who blog too effectively much on conservative websites, or just have the “wrong ideas’ about important issues.

Hey, who cares about some rich CEO. It’s just some old rich guy they’re going after. All the sheep can go back to sleep.

JellyToast on April 26, 2011 at 6:49 PM

So what did this CEO do to Obama, as our Pu$$y in Chief always has his reasons, when acting in such a personal manner.

Another way to read this is that our Pu$$y in Chief would kill old people, in his personal vendetta against Howard Solomon.

MNHawk on April 26, 2011 at 6:56 PM

It’s not difficult to see where this will lead.

Right, Hugo’s Venezuela, and who knows what thereafter.

petefrt on April 26, 2011 at 8:40 PM

It would appear that America is no longer a free market country.

OldEnglish on April 26, 2011 at 8:57 PM

Right, Hugo’s Venezuela, and who knows what thereafter.

petefrt on April 26, 2011 at 8:40 PM

And don’t you love the “media?” Never ever did I think I would live to see such a thing in America. Our great free press, the watchdog of our rights and freedoms have instead become the attack dog of all things American.

JellyToast on April 26, 2011 at 10:04 PM

They are setting up a norm. Kind of like the whole TSA pat down. It is understood now, if you want to fly to grandmothers bd party, you will have to subject yourself to a little one on one rubbing party, more so if you are five years old.

They will start with the CEO, nobody will notice, what?, it’s time for him to retire anyway. But soon, as someone pointed out, it will come down the food chain. Labor laws will come into play to protect the employee, so alongside reporting the ethnicity of the employee, you will now be required as the employer, to report the political stance of the employee.

So my question is, what is our party doing about it? About anything? Apparently the dem’s took a shellacking in November and now it is April. I’m getting the feeling that are leaders are afraid, afraid that someone from their past might call out that one of them had a snot bubble hanging from their nose when they were 10. Okay, well, that is just me being stupid, but I think you know what I mean. Who gives a rat’s behind if they put your entire life on the news? Someone needs to stand up and stop this, men with balls always have a past, that is just the way it is. Freedom is way more important than being a coward, and yes Mister Speaker, this pretty much is directed at you, defund everything, don’t raise the ceiling. Don’t subsume(— don’t even know if that Is a word, but I’m using it, so you grammar/spelling Nazis can look the other way) to their chicken little lies.

nwpammy on April 26, 2011 at 10:37 PM

And don’t you love the “media?” Never ever did I think I would live to see such a thing in America. Our great free press, the watchdog of our rights and freedoms have instead become the attack dog of all things American.

JellyToast on April 26, 2011 at 10:04 PM

and the lapdog of all things Obama.

redridinghood on April 26, 2011 at 10:48 PM

Congress needs to look into this thuggish attempt to bully Solomon out of his job — and they should take another look at the Johnson/Walpin case while they’re at it.

Now that you mention, where are the congressional investigations? Is the GOP still afraid to look mean when it comes to Obama?

pearson on April 26, 2011 at 11:07 PM

The scariest part of something like this is that unless people are going to the trouble of seeking out news for themselves, it’s unlikely that mainstream America will ever hear about it.

Murf76 on April 26, 2011 at 11:33 PM

Right, Hugo’s Venezuela, and who knows what thereafter.

petefrt on April 26, 2011 at 8:40 PM

At the risk of breaking Godwin’s Law, 1930s Germany.

pdigaudio on April 27, 2011 at 1:42 AM

“The danger to America is not Barack Obama but a citizenry capable of entrusting an inexperienced man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America . Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama. It is less likely to survive a multitude of fools such as those who made him their president.”

Sent to me by a friend…Seems to fit this situation…

Gohawgs on April 27, 2011 at 2:47 AM

God, yes.

What these people lack in historical knowledge, common sense, intestinal fortitude, leadership, and judgment of character defies belief.

Seriously, if everybody paid income tax, and their nut was about to increase to 1000 dollars paid from 500 paid per year, you’d see some different behavior and a whole lot more questions being asked.

This is downright frightening. Who the holy Hannah does he think he is? Herr Holder will threaten this company with prosecution to oust an 83-year-old who hasn’t been charged or convicted of anything, but he has no reason to charge club-wielding seditionists and racist voter-disenfranchisers? Charge this guy but fire the CA IG for letting the sun shine on the filthy money-grubbers and political cronies of his elite circle?

People, this ignorance is what leads to your own oppression. Wise up, or when the place collapses you’ll all be begging at your conservative neighbors’ front porches because they were prepared and you weren’t.

winoceros on April 27, 2011 at 4:06 AM

Sarah Palin Gets in a Parting Shot at Lib Katie Couric

http://conservativeblogscentral.blogspot.com/2011/04/hah-sarah-palin-gets-in-parting-shot-at.html

Nearly Nobody on April 27, 2011 at 5:31 AM

“The danger to America is not Barack Obama but a citizenry capable of entrusting an inexperienced man like him with the Presidency. It will be far easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to a depraved electorate willing to have such a man for their president. The problem is much deeper and far more serious than Mr. Obama, who is a mere symptom of what ails America . Blaming the prince of the fools should not blind anyone to the vast confederacy of fools that made him their prince. The Republic can survive a Barack Obama. It is less likely to survive a multitude of fools such as those who made him their president.”

It’s called revival. Revival in our churches. Revival in America.

redridinghood on April 26, 2011 at 10:48 PM

Yeah. I’m sitting watching that Chris Matthews clip where he’s mocking and attacking Pat Buchanan for questioning some of Obama’s past. A supposed journalist mocks a citizen for questioning a President. I love how Pat responded a few times “I thought you were a journalist?” and “the right of the people to question is now replaced by the right of the President to conceal” or something.

JellyToast on April 27, 2011 at 7:17 AM

Can you even imagine America after a second term?

golfmann on April 26, 2011 at 1:46 PM

Yes, and it scares the crap out of me. Obama free to implement his entire agenda, without any fear of the political consequences.

We must not let it happen.

AZCoyote on April 26, 2011 at 1:53 PM

This next election should be a declaration of war. We can’t let a 2nd term happen.

wi farmgirl on April 27, 2011 at 7:57 AM

Can you even imagine America after a second term?

golfmann on April 26, 2011 at 1:46 PM

Sure. We’ll look a lot like China. A thug state that allows just enough capitalism to generate revenue to fund the top fat cats.

Around 7 years end, though, we won’t have to worry about “terms” any more, because Obama will be appointed president “until the emergency has passed”.

hawksruleva on April 27, 2011 at 11:04 AM

I am betting $1000 a rival pharma lobbyist has its mitts all over this “decision”.

Dont worry folks, the drug manufacturing will be made up by Dem Donator #172 from the Pharma sector.

MOre importantly – what was/were the marketing “laws” broken – what drugs and when?

Odie1941 on April 27, 2011 at 11:52 AM

Interesting:

WASHINGTON (AP) — The National Labor Relations Board says it will move ahead with lawsuits seeking to invalidate state constitutional amendments in Arizona and South Dakota that require workers to hold secret ballot elections before a company can be unionized.

The move comes after months of negotiations that failed to reach a settlement with attorneys general for the two states, according to an April 22 letter from the agency’s acting general counsel, Lafe Solomon.

It’s the latest in a series of high-profile steps the agency has taken to defend union rights since gaining a Democratic majority last year for the first time in nearly a decade. And it comes as Republican state legislators are enacting anti-union laws in many states as budget-cutting efforts.

Last week, the NRLB filed a controversial lawsuit that accuses Boeing Co. of putting one of its assembly lines for the new 787 in South Carolina — a right to work state — to retaliate against union workers in Washington state who went on strike in 2008.

Solomon told state officials he has directed staff to file the lawsuits against Arizona and South Dakota “shortly.” He claims the amendments conflict with current federal law that gives employers the option to recognize a union if a majority of workers simply sign cards, a process known as “card check.”

So, apparently, the administration feels that it can deem legislation passed, just like Pelosi. I don’t recall a vote being taken on this.

Vashta.Nerada on April 27, 2011 at 1:01 PM

Obama, The Kind of Government you can hate but can’t get away from. Constitution, Obama just ignores it. Federal Judges, don’t scare Obama, he just spits in their eye. Congress, to Obama a simple formality that is out dated and irrelevant.

He told us what he was going to do when he was running, fundamentally change the Government of the United States.
Obama has sued more States than I remember in my life time. He has ignored the wishes of the people and done every thing he can to destroy our Country. He CAN NOT have a second term. We The People can not allow that to happen, PERIOD.

old war horse on April 27, 2011 at 5:12 PM

Forest Laboratories should purchase billboards all across the country asking in huge letters:

“Where are your school records Mr. Soetero?”

Obama seems to have forgotten about Karma.

Roy Rogers on April 27, 2011 at 5:14 PM

This is a quasi-fascist form of Nationalizing Industries. Any company that deals with farming, or raw/natural resources require the governments authorization to operate. To make it a policy of the government to determine the operating personal of PRIVATE companies makes the government the Overseer and effectively makes these companies a part of the PUBLIC domain. I submit as evidence any person who has done business in industrial manufacturing dealing and that deals in raw materials. You would consistently get emails from “salespersons” from China representing themselves as “private industries” but the real fact was you were dealing with the Chinese government directly which becomes apparent when you actually try to negotiate with these companies.

NO. I’m not a conspiracy theorists BUT I do know that our government, currently, works on the premise of precedent. If this President sets up a precedent that the government has a right to demand who is employed by companies it deals with then, basically, you’re setting up for a future situation where, like Rep. Maxine Waters said in committee hearings, we should NATIONALIZE OIL COMPANIES, or some such nonsense. This stuff is just purely SCARY.

Sultry Beauty on April 27, 2011 at 5:39 PM

Sultry Beauty They have gotten away with EVERYTHING so far and no body does anything for fear of being called Racist. If disagreeing with Obama make me a Racist so be it. The truth is Obama is the biggest racist I have ever known and I grew up in the South, was 10 1957. that is saying a lot. I wonder sometimes if he slaps his White half across the face every morning. Would not surprise me. Maxine Waters sure did some sputtering when she let that slip too. Even the Democrats around her were giggling at her situation.

old war horse on April 27, 2011 at 6:04 PM

As much as I fear that the administration is serious in their attempt to have the power to directly manage individual businesses, I’m more concerned that this is just a Hillary-esque trick to make somebody some money.

So watch the other hand. Who has recently borrowed and sold large amounts of pharmaceutical stock on margin, knowing that this campaign against a CEO will damage their value, with the intent of selling low after the stocks fall? Yes, Hillary did exactly that. She initiated a six-month attack against the pharmaceuticals industry. Why did she stop? Nothing much had changed about the way they did business, nothing had changed about regulations, etc. The only thing that happened is that just before her attacks began, she borrowed and sold stock while it was high. Then she influenced the market through her un-elected position as First Lady. Then, with pharma stocks way down, she re-purchased the amount she borrowed, pocketing the difference. The SEC began and ended an investigation in less than a week.

Freelancer on April 28, 2011 at 12:27 PM

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