Revolving Door Between Gov't And Industry Continues: Pharma Lawyer Goes To USPTO As Gov't Financial Regulator Goes To Wall St.

from the who-needs-bribes? dept

Tue, Feb 22nd 2011 10:12pm — Mike Masnick

The level of regulatory capture between the government and industry is really quite sickening these days. There's a revolving door where government officials go work for industry and vice versa, with plenty of back-scratching in both directions. Two separate stories crossed my desk at about the same time, highlighting this in both directions. First up, it's really no surprise that one of the pharma industry's favorite lawyers has just become deputy director of the US Patent Office. Of course, the pharma industry is one of the more aggressive ones when it comes to expanding the power of patents, and abusing them to block innovation in healthcare. Now they have another person on the inside to help.

Going in the other direction, a senior "dealmaker" and advisor to the government's FDIC program has jumped ship to Goldman Sachs. That article lists a bunch of other top government officials involved in dealing with the financial crisis and setting the new regulatory rules, who have wasted little time in taking new jobs in the private sector on Wall Street. As some have pointed out, this kind of revolving door makes bribes totally unnecessary. You don't need any form of bribery or overt corruption, when the corruption is entirely implicit in the nature of the revolving door.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: corruption, patents, pharma, politics, revolving door, wall street

25 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 22 Feb 2011 @ 10:41pm

I think it's time our society start discussing vows of poverty for the political class.

If the cost of being a bureaucrat or politician was that you had to live a monastery cell and have no money, income or personal possessions maybe the problem would go away by itself.
[ link to this | view in thread ]
Anonymous Coward, 22 Feb 2011 @ 11:16pm

Re:
They'd have hidden luxuries installed, Hair Bear-style, in exchange for political favors.

How about rule by AI? You can't bribe a computer.
[ link to this | view in thread ]
Jay (profile), 22 Feb 2011 @ 11:43pm

Re: Re:
But then who does the programming?
[ link to this | view in thread ]
Beta (profile), 22 Feb 2011 @ 11:46pm

closing the loop
I understand why a government official would want a fat corporate job (and perhaps be willing to act in the corporations interest to get one). And I understand that a corporate executive would make a corp-favorable government official (out of habit). But I think I'm missing something. I don't see why a corporate exec would want to move into the public sector (prestige? ease?). And would that person have any incentive to keep working for the former employers benefit -- apart from mental inertia?

Here are a couple of questions I'd really like journalists to consider when writing these stories:

1) Can we find anything specific this official did for this company before joining it (e.g. did Jiampietro do anything particularly favorable to Goldman Sachs)?

2) Who appointed this executive to public office, and do they get anything from the corporation, or the same sector (e.g. did anyone who backed Rea get campaign contributions from Crowell & Moring beforehand, or a corner office afterward)?

3) (Going out on a limb.) Can we see a strong enough pattern here that we can predict which civil servants will take lucrative jobs with which companies over the next year?
[ link to this | view in thread ]
DeAngelo Lampkin (profile), 23 Feb 2011 @ 12:04am

On the one hand, I say let's not *assume* corruption...
Government officials switch between taking money in public and private enterprises all the time. I'd like to think that at least SOME of them are honest.

They need people who've worked in the industry to be qualified to create policy. I mean how often has it been said that we need more technically competent government officials for making rulings on things like software patents, IP law, etc. You're not gonna find life-long bureaucrats wtih those skills!

-DeAngelo
www.braincano.com
www.cheerthis.com
[ link to this | view in thread ]
Jay (profile), 23 Feb 2011 @ 12:50am

Re: closing the loop
We kind of can. It's really an Open Secret

See also:

Mitch Glazier

Mitch Bainwol

Better yet...

Look at the former members of Congress

Yeah... there's a pattern.
[ link to this | view in thread ]
The eejit (profile), 23 Feb 2011 @ 1:33am

Re: On the one hand, I say let's not *assume* corruption...
The issue is the level of people going through the revolving door, as it were. IT looks like almost 85% of Congresscritters go into the private sector after spending years 'lobbying' on behalf of their corporate overlords.
[ link to this | view in thread ]
Chris in Utah (profile), 23 Feb 2011 @ 3:27am

George Carlin RIP
Ah NASCAR patches all around!
[ link to this | view in thread ]
abc gum, 23 Feb 2011 @ 4:53am

Now that corps are people and all ... why not start enforcing the laws against adultery and sodomy - go after the wanton screwing around by gov & big biz. Oh yeah, I forgot, they make the laws, not follow them.
[ link to this | view in thread ]
DH's Love Child (profile), 23 Feb 2011 @ 6:48am

Re: closing the loop
How about former FCC Chair Kevin Martin?
[ link to this | view in thread ]
xs (profile), 23 Feb 2011 @ 7:12am

Re: On the one hand, I say let's not *assume* corruption...
The entire US political structure was based on the principle that public officials should not be assumed to be honest. All the check and balance designed into the system were there because the designer assumed officials could not be trusted to be honest, thus needing all the restraint in the system to stop them, and make exposing them easier if they do.

All of these wink wink deals our politicians and private sections have going on right now is the result of us assuming there aren't any real corruption going on. The system can only work when the common people use the system as it's designed. When there's apparence of corruption, for the most part, there ARE corruptions.

I think it's highly important for our public officials, lobbyists, and private sector heads to sign agreement barring working for the other side for a few years after ending the corrent employment.
[ link to this | view in thread ]
Anonymous Coward, 23 Feb 2011 @ 7:59am

Where there is smoke...
there is probably someone smoking. But there is rarely fire, no matter how hard you try to make it look that way.

Some people make a ton of money in the business world, and decide to move to a life of politics (Mayor Bloomberg, anyone?). Others toil almost namelessly in the public service for years, and finally leave the government to work in a high paying "private industry" job (Condeleeza Rice, director of the Standford Global Business Center).

Sometimes it is a choice, sometimes it is a change of government.

I can imagine some people looking at working in the government as a challenge, the old "I could do better than that" mentality that has them taking on the challenge. For some it's a life changing experience, for others it is a reason to hit the exits as fast as they came in.

Where are their current contacts? For many it will be with the companies they are regulating. Perhaps they do such a good job (not a biased job, a good job) that one of these companies offers them to go work in the private sector instead. Yes, they are buying knowledge and skill. But they are not buying access.

Quite simply, 2+2 doesn't equal 5, no matter how hard Mike tries to make it look otherwise.
[ link to this | view in thread ]
jackwagon (profile), 23 Feb 2011 @ 8:22am

Re: Where there is smoke...
I don't feel that an individual can legislate in the interests of the PUBLIC when they are or will be in the pocket of the corporations that take advantage of the public. Their current contacts SHOULD be their constituents... not the heads of corporations and lobbyists.
[ link to this | view in thread ]
Anonymous Coward, 23 Feb 2011 @ 8:37am

Teresa Stanek Rea has practiced law for the last 25 years as a patent lawyer, with her pre-law experience being that of a pharmacist. The majority of her legal career was with the firm of Burns, Doane, Swecker and Mathis in DC, and more recently with Crowell & Mooring, also in DC. Thusly, it seems inaccurate to say that a "pharma lawyer", which makes it sound as if she was an employee within a pharma company, has now jumped ship from a pharma company to a government position within the USPTO. This inaccuracy is further compounded by the fact that her practice of law has involved far, far more that just pharma matters.

Given the constant criticism here that the USPTO consistently issues "bad" patents, I would think one would welcome someone holding a position of authority within the USPTO who actually knows the law, has worked with a wide diversity of technologies for a wide diversity of clients, and who may actually be able to provide leadership and direction that could help overcome the criticism.
[ link to this | view in thread ]
angry dude, 23 Feb 2011 @ 9:17am

Big news
Mikey

it's been like this for decades

Top fed executives take top executive positions with private companies in the same industry space after retirement (with full government pensions)
- to help those private companies get lucrative federal contracts from their buddies still in the gov office but waiting for their own turn

who needs to bribe feds on the job ?

I can tell stories nobody would believe...

But now the shit is starting to hit the fan -this country is finally broke
[ link to this | view in thread ]
Thomas Grebinski, 23 Feb 2011 @ 9:28am

Patent protection blocking innovation
I disagree with the belief by some that patents block innovation. I cannot sepak for health care. However, I can speak for the positive role patents can play in high technology innovation. My direct experience is that even with patent protection, when there is money involved, companies and people deliberately steal others ideas to do the same. The protection afforded by the issuing of a patent, gives the owner the legal right to take back what originally belonged to them. Patent protection does not block innovation because at least some companies and some people will take what they feel they need to make money anyway. It ony gives an owner the leagl right to capitalize on the use of its intellectual property without a license to do so.
[ link to this | view in thread ]
Talon360 (profile), 23 Feb 2011 @ 9:41am

More Govt Regulations needed?
[ link to this | view in thread ]
Talon360 (profile), 23 Feb 2011 @ 9:41am

More Govt Regulations needed?
[ link to this | view in thread ]
Talon360 (profile), 23 Feb 2011 @ 9:50am

More Govt Regulatons needed?
See, this is more evidence that we need MORE, MORE, MORE regulations to be enacted!!! Government needs to police these things better because the "private sector" has abandonded all ethics in the interest of self-benefit (I.E. do whatever you need to do to better the competition and/or 'those who regulate'). NOT! Seriously, WE THE PEOPLE need to use the technologies available to us (BEFORE THE GOVERNMENT STARTS TO REGULATE IT) and initiate the discussion/actions to STOP this type of corruption!!!
[ link to this | view in thread ]
angry dude, 23 Feb 2011 @ 9:52am

Re: Patent protection blocking innovation
Stealing ???

NO

This is called "innovating" in mikey's lexicon
[ link to this | view in thread ]
Talon360 (profile), 23 Feb 2011 @ 9:57am

Re: closing the loop
Oh, you don't nderstand the ego of these people and the HIGH they get when appointed to high level government positions in the DC Inner Belt (unlike most of those in high level positions away from DC, NYC, etc.).

And, for many of them, this is a necessary step to filling out their credentials. Then they go back to the 'private sector positions' with insider knowledge, networking, etc. - an education you just can't buy - or maybe you can after all!!!
[ link to this | view in thread ]
Anonymous Coward, 23 Feb 2011 @ 11:22am

When on the 'inside' - whether it be industry or government, depending the entry level of the person, one's main interest will remain that to 'corrupt' the system by working in the interest of the higher bidder: so when working in industry you work for $$$, lots of $$$ - and when in Govt you work for $$$, lots of Govt $$$ - How you get those $$$ will be a matter of the 'implicit' corruption and corruptive behaviour allowed. In Govt. you can manipulate the system in the interest of the $$$ which is usually for the industry (forget the consumer!); and when in industry - you work to push your company's objective: lobby for the interests of your company balance sheet- $$$ and yourself. It's all about corporate greed. Thankfully there are Saints that are not corrupt so they balance out the system. The worst thing that could happen is when the system becomes fully poised to follow 'corporate' greed and intentions. In the world of IP that is happening at some IP offices around the world, but led by the example of the current WIPO administration. EPO and OHIM seem to be OK -for the moment ....
[ link to this | view in thread ]
MrWilson, 23 Feb 2011 @ 3:51pm

Re: Re:
Please report to Carrousel for Renewal.
[ link to this | view in thread ]
teka (profile), 23 Feb 2011 @ 6:49pm

Re: Patent protection blocking innovation
okay.

your "direct experience", lets hear it.
Who stole. Literally stole, not invented separately, not had a competing product on the market that was eventually argued to sorta kinda infringe on some level, but stole. Who stole what patent and why, and how was it resolved?

Without details "direct experience" is a claim that anyone can throw out. sound and fury, but no substance.
[ link to this | view in thread ]
Anonymous Coward, 24 Feb 2011 @ 5:33am

Re: Where there is smoke...
Anyone buying that?

*crickets*
[ link to this | view in thread ]