Tuesday, February 18, 2014

Who Rules Cooper Union?--Part 8

WHO RULES COOPER UNION?—Part 8: A Look at Cooper Union’s Bristol-Myers Squibb and Vassar College-Yale University/Bain Capital Connections

(A shorter version of this article originally appeared in the Summer 2013 issue of the Lower East Side underground/alternative newspaper, “The Shadow”)

Cooper Union’s Bristol-Myers Squibb Connection

Under a July 2013 agreement that ended the occupation of the office of the current Cooper Union president, Jamshed Bharucha, by students who protested against the Cooper Union Administration’s abandonment of its free tuition policy, a “Working Group” was set up whose academic community members will receive “any financial information that is more detailed than what is used in public reporting…only on the basis of strict confidentiality;” and which will be chaired by two Cooper Union trustees: American Racing & Entertainment Chairman Jeff Gural and former Bristol-Myers Squibb Company Vice President for Corporate Development Mike Borkowsky.

Coincidentally, around the time Cooper Union Trustee Borkowsky was the Vice President for Corporate Development at Bristol-Myers Squibb Company in the late 1990s and early 21st-century, Bristol-Myers Squibb Company was apparently accused by ACT-UP activists of price-gouging on the anti-HIV medicines it marketed. In addition, the Securities and Exchange Commission [SEC] accused the Bristol-Myers Squibb Company of apparently inflating its revenue around the same time that Cooper Union Trustee Borkowsky was apparently the Bristol-Myers Squibb Company’s Vice President for Corporate Development. As Greg Farrell noted in an August 4, 2004 article in "USA Today":

“In one of the largest penalties levied against a company accused of accounting fraud, the Securities and Exchange Commission ordered Bristol-Myers Squibb (BMY) to pay $150 million to settle charges that it inflated its revenue by $1.5 billion in 2000 and 2001.

“The settlement concludes a two-year SEC investigation of the company...According to the SEC complaint, in 2000 and 2001, the company's controller and chief financial officer knew Bristol-Myers was engaging in a practice known as `channel stuffing’ — unloading excessive inventory on wholesalers so it could hit quarterly sales targets. But the company falsely told analysts there were no unusual issues with the company's inventory policies.

“Bristol-Myers entered into agreements with its two biggest wholesalers to meet the company's aggressive double-digit growth predictions in 2000 and 2001. The wholesalers agreed to accept large quantities of Bristol-Myers products — more than they could sell over the period in question — because the pharmaceutical giant guaranteed them a specific profit to carry the inventory.

“Under generally accepted accounting principles, any deal between parties that guarantees a buyer a profit cannot be considered a true sale.

“The SEC said Bristol-Myers' U.S. Medicines unit started channel stuffing in the fourth quarter of 1997. At the time, the vice president of finance at the medicine unit complained to the company's officers, who did nothing. In 1998, when she complained again, she was transferred to another division.

“Other employees also complained about the arrangements, but they were ignored…

“The SEC also accused Bristol-Myers of…understating Medicaid liabilities.

“The $150 million fine is the second-largest ever assessed by the SEC, coming a year after the commission hit WorldCom with a $750 million fine stemming from accounting fraud there….”

Some of the surplus profits that Bristol-Myers Squibb obtains from exploiting its workers and apparently overcharging consumers for some of the medical drugs it sells are apparently used by the corporation’s Bristol-Myers Squibb Foundation to help fund some U.S. universities and campus research projects that might benefit the special economic interests of pharmaceutical industry firms like Bristol-Myers Squibb. According to the Bristol-Myers Squibb website, for example, over $3.2 million worth of “grants” were given to at least 22 U.S. universities in 2012, including $1.3 million in grant money to the University of Massachusetts, 558,000 in grant money to Johns Hopkins University, and $475,000 in grant money to the University of Florida. Yet, ironically, although Cooper Union Trustee Borkowsky is a former Bristol-Myers Squibb Company vice-president for Corporate Development, no grant money was apparently given to Cooper Union in 2012 by the “non-profit” Bristol-Myers Squibb Foundation.

Besides using some of its surplus profits to fund certain U.S. universities and campus research projects, Bristol-Myers Squibb has also historically used its surplus profits to spend a lot of money on hiring lobbyists to gain special economic benefits from the U.S. federal government. Between 1998 and 2000--when Cooper Union Trustee Borkowsky was Bristol-Myers Squibb’s vice-president for Corporate Development—Bristol-Myers Squibb spent, for example, over $11 million on lobbying the U.S. government, according to the Center for Responsive Politics’ Open Secrets website; and between 2011 and 2012, Bristol-Myers Squibb spent over $6.6 million on lobbying the U.S. federal government.

The Center for Responsive Politics’ Open Secrets website indicated why the corporation whose former vice-president for Corporate Development is a current Cooper Union trustee continues to spend so much money on lobbying:

“Bristol-Myers Squibb is one of a handful of giant companies that dominate the drug industry. The company develops drugs to combat cancer, heart disease, stroke and other related illnesses.

“Prescription drugs make up the bulk of its business, but Bristol-Myers also sells over-the-counter medications such as Excedrin. Together with the rest of the pharmaceutical industry, Bristol-Myers has lately been defending the high cost of its prescription drugs, saying the cost is necessary to recoup research expenses. The company has lobbied against efforts to add a prescription drug benefit to Medicare, to expand generic drug use, and to allow importation of cheaper pharmaceuticals from Canada.”

Coincidentally, “20 out of 27 Bristol-Myers Squibb lobbyists in 2012 have previously held government jobs;” and in 2012 over $467,064 in campaign contributions (including $42,875 in campaign contributions to Barack Obama’s re-election campaign) were made by either the Bristol-Myers Squibb political action committee or Bristol-Myers Squibb executives, according to the Center for Responsive Politics’ Open Secrets website.
(end of part 8)

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