Friday Alert   May 26, 2006
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Jury Finds Enron Executives Guilty
Former Enron CEOs Jeffrey Skilling and Kenneth Lay were found guilty Thursday of conspiracy to commit securities and wire fraud during the collapse of what was once the seventh-biggest company in the U.S.  Skilling, 52, was found guilty of 19 counts of conspiracy, fraud, insider trading and making false statements.  The convictions, when combined, carry a maximum sentence of 185 years in prison.  Lay, 64, was found guilty on six counts of fraud and conspiracy and four counts of bank fraud.  He faces up to 45 years.  Judge Sim Lake set sentencing for September 11.  Twenty-thousand former employees and retirees in Enron's pension and 401(k) retirement plans that held Enron stock have suffered $1 billion in losses, according to their Seattle attorney in USA Today.  "Justice prevailed in this case," said Edward Coyle, Executive Director of the Alliance.  "Skilling and Lay knew very well what was going on when they were selling their own stock, while telling employees and the rest of the world that everything was fine."
The public outrage over Enron and other corporate scandals led Congress to pass the Sarbanes-Oxley Act, the most sweeping anti-fraud legislation ever, designed to make company executives more accountable.  However, not all attempts to address what went wrong at Enron have been successful.  For instance, an amendment introduced to the 2005 bankruptcy bill by Sen. Richard Durbin (D-IL) would have given employees and retirees a priority in making claims during bankruptcy proceedings for the value of company stock held in an employee pension plan, but it failed 40-54.

Wall Street Journal Pans Part D; Wal-Mart Likes It
A recent Wall Street Journal editorial analyzed the Medicare Part D prescription drug program, and called it "a big setback for the causes of fiscal responsibility and market-oriented ideas in health care."  The editorial called the panic in Congress to extend the May 15 deadline for penalty-free enrollment "further evidence that the program has been far from the political home run the GOP once hoped."  George J. Kourpias, president of the Alliance, commented, "With the Wall Street Journal echoing that the Part D program was fiscally irresponsible and could hurt Republicans, the program seems to have few defenders cheerleading its excellence before the midterm elections."
Wal-Mart officials have not been among those publicly badmouthing Part D, however.  Many owners of smaller pharmacies have complained to Medicare officials that the drug benefit steered business to large, corporate pharmacists by putting the bigger pharmacists' logos on their cards.  The most prominent example of this practice, called "co-branding", occurred with cards issued by Humana Inc., which displayed logos featuring Wal-Mart or CVS, according to the National Community Pharmacists Association, a trade group representing about 24,000 pharmacies.  Many of the independent pharmacy owners are convinced that they lost countless customers because of the logos, and when talking to lawmakers this week about concerns with the drug benefit, co-branding was a top complaint, according to the Associated Press.  The Centers for Medicare and Medicaid Services told insurers on Wednesday that next year, when they cite a particular company as a partner, they must note that other pharmacies-physicians-providers are available in their network.  In addition, insurers will not be able to issue identification cards that feature the logos of big pharmacies. 

Hello, Texas!
Welcome to the Texas Alliance for Retired Americans, our 25th state chapter.  Becky Moeller, Secretary-Treasurer of the Texas AFL-CIO, greeted sixty attendees at the founding convention on May 20.  Elected officers include Victor Pauly, President; Elaine Jones, Secretary-Treasurer; four union vice presidents; and one community-based vice president, each of whom was chosen at the caucuses.  Edward Coyle attended the convention and presented the charter.

Justice Department: Abbott Laboratories' Fraud Cost Government Millions
The Justice Department is accusing Abbott Laboratories of vast price inflation as part of a fraudulent billing scheme that cost Medicare and Medicaid more than $175 million from 1991 to 2001.  Abbott jacked up the price of the intravenous antibiotic vancomycin as much as 18 times what it charged health care providers, knowing that the Medicare and Medicaid programs would reimburse the providers based on the manufacturer's price, according to a whistleblower lawsuit unsealed Thursday and reported by the Associated Press.  Abbott, based in Chicago, participated in the scheme because hospitals, pharmacies and other providers could pocket the difference and would be more likely to prescribe the company's products in the future, the Justice Department stated.  Other Abbott solutions used in administering IV drugs and to replace fluids in the body also were alleged to be part of the arrangement.  "If Medicare had been able to negotiate prices with Abbott Laboratories directly, the government would have saved $175 million on the fraud alone," said Ruben Burks, Secretary-Treasurer of the Alliance.

Alliance National Convention
The National Convention is coming up September 5-8, 2006 in Washington, D.C.  Members will elect a president and secretary-treasurer and at-large members will also elect six community-based board members.  Nominees must be members in good standing of the National Alliance.  Any self-enrolled (at-large) member may attend the meeting and is eligible to vote.  Sponsoring organizations may send as many delegates as they choose.  Nominations must be sent to the Alliance for Retired Americans, Nominations Committee, 815 16th Street, NW, Fourth Floor North, Washington DC 20006, postmarked by August 4.  For Registration Information call: 1-888-373-6497 or visit www.retiredamericans.org .

Did You Know...
The office of Speaker of the House Dennis Hastert (R-IL) issued a statement after the House of Representatives passed their budget resolution last week.  Their heading: "Fiscal Responsibility is not an Option in this House of Representatives."  Too true!

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