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Feb 06, 2004

CONTACT: Jamie Court - 310-392-0522 x327

Schwarzenegger Should Cancel Half Million $ Fundraiser Due to $1.3 Billion Conflict with Pharmaceutical Industry

SANTA MONICA, Calif., Feb. 6 -- The nonprofit, nonpartisan Foundation for Taxpayer and Consumer Rights (FTCR) called on California Governor Arnold Schwarzenegger today to cancel an upcoming New York fundraiser due to a conflict of interest with its host, Robert Wood Johnson IV, heir to the pharmaceutical empire of Johnson & Johnson. Attendees have been asked to give up to $500,000, an unprecedented request for a political fundraiser. The FTCR letter follows:

February 6, 2004

   Re: Why You Must Cancel Your New York Fundraiser

   Dear Governor Schwarzenegger:

   The $500,000 question is why would New Yorkers pay one half million dollars per person to influence a California ballot initiative at your fundraiser later this month in the home of Robert Wood Johnson IV? Just one answer to that question requires you to cancel this event.

   Johnson is the heir to pharmaceutical giant Johnson & Johnson's fortune and the pharmaceutical industry has a great deal of business with you.

   An audit conducted by the Bush Administration's Department of Health Services shows pharmaceutical companies owe California $1.3 billion in overdue rebates for prescription drugs purchased by the state Medi-Cal program. State health officials failed to collect the rebates that pharmaceutical companies owed under a 1990 federal law that requires drug makers to sell prescription drugs to state health programs at a reduced rate. Your own audit of state finances conducted by Donna Arduin made no mention of the rebates or the federal audit. At the same time, your 2004- 2005 budget would reduce state funding for health care programs for the children and the poor by $900 million. You have a choice to collect $1.3 billion from Mr. Johnson's colleagues, his company and his industry, on the one hand, and to cut health care for poor children and families on the other.

   The public must not perceive that Mr. Johnson's sponsorship of the most expensive fundraiser in the history of the world will have influenced your decision on this budget matter or on other legislation the pharmaceutical industry lobbies in the state. Among the industry's biggest worries now are legislation to allow bulk purchasing of prescription drugs and to allow re-importation of cheaper drugs from Canada.

   You have already received campaign contributions of $21,200 from Johnson & Johnson, $21,200 from Novartis and $20,000 from Allergan. But a $500,000 per person ask from pharmaceutical companies, attorneys for bond houses, and others on Wall Street with an interest in buying a piece of California's future is beyond the pale.

   You told California voters you didn't need anyone's money and that you will make decisions for the people. Even a salesman as successful as you cannot make this pledge stand if this fundraiser goes forward. You shouldn't be selling California to New York. Cancel it.

The Foundation for Taxpayer and Consumer Rights is a nonprofit, nonpartisan consumer advocacy organization. For more information, visit us on the web at: or

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