Perry boosted by $200K from Big Pharma-linked group as dark money hits PA-10

By: - July 24, 2020 7:20 am

Congressman Scott Perry, R-10th District, answers a question at a Hummelstown public meeting with constituents on July 30th, 2019 (Capital-Star photo).

A pharmaceutical industry-backed dark money group has already spent more than $200,000 on TV ads supporting U.S. Rep. Scott Perry, R-10th District, who’s among the country’s most vulnerable congressional incumbents.

The ads are part of a multimillion-dollar campaign by the conservative American Action Network to support members of Congress who voted against a Democratic bill tackling high drug prices, and backed a less strict Republican proposal.

The current ads, which run until the end of the month, thank Perry for “working with both parties to accelerate innovation” amid the hunt for a COVID-19 vaccine.

The ads also claim that the legislation Perry signed onto will “lower prescription costs” while “fostering innovation.”

The above ad is part of the same campaign from American Action Network that is backing U.S. Rep. Scott Perry this July.

On its website, American Action Network says it works to “promote center-right policies based on the principles of freedom, limited government, American exceptionalism, and strong national security.”

But these aren’t the first ads from American Action Network in the district, nor is Perry the only candidate benefitting from hard to trace political dollars spent by national groups.

The Democratic advocacy group, House Majority Forward, has spent at least $174,000 on television ads in the district bashing Perry, according to federal ad records, likely benefitting Perry’s Democratic opponent, Auditor General Eugene DePasquale.

That means nearly $400,000 in outside spending has already graced the airwaves in the 10th Congressional District, which stretches from rural northern Dauphin County through Harrisburg to York and Carlisle. 

The district, due to its small cities and bluing suburbs, is a top target for Democrats, who see the arch-conservative Perry as vulnerable amid shifting demographic trends.

Both groups are 501(c)(4) nonprofits, so American Action Network and House Majority Forward can take unlimited and anonymous donations from donors, and turn them into political ads attacking or defending friendly lawmakers, as long as political spending does not exceed 50 percent of its budget.

The two are also among 10 biggest spenders of these undisclosed political dollars — known as “dark money” — in the United States, according to OpenSecrets, a website that tracks political spending. 

The one caveat: 501(c)(4) groups are also prohibited from coordinating with campaigns, said Michael Beckel, research director at Issue One, an advocacy group focused on money in politics.

“Our country’s anti-coordination laws are designed to prevent coordination that would allow big-money donors to underwrite campaign activities” with unlimited donations, Beckel said in an email. 

Much of Perry’s support has centered on his action on drug prices, but current U.S. campaign finance law makes it impossible to know for sure if pharma dollars are behind these ads, Beckel said.

But federal records analyzed by Issue One reveal that American Action Network has taken $12 million from a powerful pharmaceutical lobbying group that opposed the stricter, Democratic- backed drug pricing bill.

Then, after that bill passed, with Perry and dozens of his fellow Republicans voting no, American Action Network spent $8 million on ads to thank lawmakers, many in swing districts, for supporting the lighter proposal.

In the 10th District, the total TV ad buy for July is $203,000, said an AAN spokesperson who declined to be identified in an email. The spokesperson did not clarify if the total includes an earlier round of similar ads in January.

Matt Beynon, a spokesperson for the Perry campaign, did not reply to specific questions. 

Instead, he pointed to House Majority Forward’s ads and said the group’s funding and support for progressive Democrats was “out-of-step with the voters of South-Central Pennsylvania.”

‘Socialized medicine’

American Action Network’s ads come after Perry and dozens of his Republican colleagues voted against H.R. 3, a proposal from Democrats to force drug manufacturers to negotiate the price of medicine, and instead backed the Republican-sponsored H.R. 19.

The Democrats’ bill also would prevent the federal government from paying an increase greater than the rate of inflation for medicine, reveal their costs and profits for drugs with price spikes, and expand Medicaid.

According to polling by Kaiser, four out of five Americans support allowing the federal government to negotiate drug prices. The nonpartisan Congressional Budget Office estimated the bill would reduce the federal deficit by $5 billion over the coming decade.

The Democrats’ proposal was opposed by the Pharmaceutical Research and Manufacturers of America, or PhRMA who claimed it would hurt drug research and development.

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American Action Network, which received $12 million from PhRMA from 2009 until 2017, spent $5.4 million in 2019 on ads aimed at persuading swing district Democrats to vote against the H.R. 3.

Despite the pressure, the bill passed the House 230-192 on Dec. 12, 2019. It had the support of every Democrat, as well as Bucks County U.S. Rep. Brian Fitzpatrick, R-1st District, and one other GOP lawmaker.

In a Facebook post at the time, Perry called H.R. 3 “yet another lurch at socialized medicine” and “clearly about messaging and politics.”

Instead, Perry said, the House should have passed the GOP counter proposal, introduced just three days before the final vote.

According to HealthAffairs, a journal on health care policy, the GOP-backed bill, H.R. 19, had a “fairly narrow” scope, and does not stop pharmaceutical companies from increasing the prices of their drugs over time, or prevent high release prices for a new drug.

Republicans — and AAN’s ads — also portrayed the bill as bipartisans, because it includes numerous proposals that have received bipartisan committee votes. But the bill has no Democrat sponsors.

The proposed reforms had been around for years and “could have been passed at any time,” HealthAffairs added, but “it took the introduction and expected passage of H.R. 3 for the Republican caucus to coalesce around this package of changes.”

Perry, as well as American Action Network, also repeated the industry talking point that H.R. 3 would cut down on research and development of new drugs.

A report from President Donald Trump’s White House claimed the bill could prevent the development of 100 new drugs over a decade. The CBO projected 30 fewer drugs.

In an email, Nicole Longo, a spokesperson for PhRMA, said that it was “disappointed” with aspects of H.R. 19, such as its rebate reforms, and urged Congress “to pursue a balanced approach to drug pricing reform.”

Before the Democratic bill even passed the House, Senate Majority Leader Mitch McConnell, R-Ky., warned the proposal would not get a vote in the upper chamber.

Despite the warning, H.R. 3 passed. That same day, American Action Network announced its first $4 million ad campaign supporting the Republican counterproposal. 

Perry was one of 28 lawmakers who received a thank you ad for “taking the right approach to prescription drug reform,” American Action Network said at the time.

The first round of ads ran in January. A second, $4 million ad purchase backing H.R. 19’s sponsors was announced earlier this month. That’s the one central Pennsylvania viewers may catch during a morning talk show or the nightly news.

These ads are more focused, running in support of 16 House Republican incumbents across the country. Eleven of the 16 are in seats that are seen as up-for-grabs in the 2020 election by the Cook Political Report.

As for American Action Network’s spending, PhRMA said it seeks “to work with organizations we agree with, as well as those where we have disagreements on public policy issues. Even though we do not agree on every issue, we believe engagement and dialogue on areas of common ground is critical.”

Follow the money

Despite the Big Pharma-friendly vote on H.R. 3, Perry has not received direct industry donations.

According to Kaiser Health News, Perry, a member of the House’s Freedom Caucus, has never taken any direct donations from pharmaceutical companies to his campaign coffers.

But American Action Network frequently has been a conduit for the industry. All told, it has raised at least $170 million between July 2009 and June 2017, according to a report from Issue One, a Washington D.C.-based good government reform that supports campaign finance reform.  

By scouring federal regulatory disclosures and campaign finance reports, Issue One found at least $12 million, or about 7 percent, of the network’s funding came from PhRMA, the industry trade group. The trade group was the largest single American Action Network donor Issue One could identify.

Even those numbers are inexact, Issue One’s Beckel cautioned in an email. 

Their analysis used old filings that only began to trickle into public view months after the spending, Beckel noted, and a full accounting of American Action Network’s spending would only be possible if a group opened their books — which was unlikely. 

For example, the nonprofit watchdog group Public Citizen located another $2.5 million in donations to American Action Network from PhRMA in 2018, which is outside the scope of Issue One’s research.

Beckel also cautioned that, despite the appearances, there was no way to directly link the ad spending to PhRMA and its priorities.

“On the one hand, yes, the American Action Network has deep ties to the pharmaceutical industry,” Beckel said. “But on the other hand, because the American Action Network is a dark money group, it’s impossible to know if the pharmaceutical industry is providing any funding for these particular ads in Pennsylvania.”

As such, the spending was a symptom of America’s “broken campaign finance system,” Beckel said.

The divide between independent expenditures and direct donations puzzled Steven Billet, a George Washington University professor who used to run AT&T’s political action committee.

“I can find little rationale for taking money from the dark money operation aligned with the pharmaceutical sector and not directly from Pharma,” Billet, a York County native, told the Capital-Star in an email. “Perhaps he is trying to be even-handed and objective about health care issues by not taking money from them.”

“That’s a pretty shallow explanation,” he added.

You get an ad, and you get an ad, everybody gets an ad!

Neither Perry’s campaign or AAN responded to questions about Perry’s pharmaceutical vote and the ads.

“The ads we’re running aren’t part of any political campaign or message … but rather are part of an advocacy campaign that we are running across the nation to urge action on legislation to reduce prescription drug pricing,” American Action Network’s spokesperson said.

Perry spokesperson Beynon pointed to laws limiting coordination between the campaign and outside groups, and House Majority Forward’s own spending in the district.

The Democratic 501(c)(4) pledged to spend $10 million in 2019 alone according to Politico — even as Congressional Democrats passed legislation to illuminate dark money.

A Capital-Star review of Federal Communications Commission ad purchases found that Majority Forward has booked at least $174,500 in TV spots on Harrisburg-area stations this month.

The ads ding Perry for voting against a $1.5 trillion infrastructure plan, that would fight climate change, invest in roads and transit, and expand high speed broadband.

Beynon called for DePasquale to “disavow their support immediately.”

In a statement, Depasquale spokesperson Kunal Atit said that the Democrat was “running to hold Washington and it’s politicians accountable just like he has in Harrisburg” before listing DePasquale’s accomplishments, such as efforts to lower prescription drug costs.

Neither Beynon or Atit denounced their campaign’s respective dark money support, or said if they would support changes to America’s campaign finance system.

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Issue One’s Beckel said that despite anti-coordination laws, a candidate could still denounce independent spending on their behalf, as Perry spokesperson Beynon suggested to DePasquale.

But, Beckel said, “outside groups may not heed that advice or change their tactics.” 

Perry, first elected in 2014, entered national Democrats’ radar when the state Supreme Court redrew the congressional map in 2018.

That year, Perry fended off a tough challenge from pastor George Scott by just a few percentage points with the help of hundreds of thousands of dollars in outside spending.

The pharmaceutical ads aren’t American National Network’s first foray into the 10th District. In the middle of the impeachment of President Donald Trump, the group spent $8.5 million arguing against it in TV and radio ads, and another $2.5 million attacking Democrats who voted “yes.”

Perry was one of a handful of lawmakers who received a “thank you” ad as a “no” on impeaching Trump.

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Stephen Caruso
Stephen Caruso

Stephen Caruso is a former senior reporter with Pennsylvania Capital-Star. Before working with the Capital-Star he covered Pennsylvania state government for The PLS Reporter.