It turns out that Heather Bresch is as much a patriot as she was a student.
Ms. Bresch is chief executive officer of Mylan, Inc., a large maker of generic prescription drugs which recently announced that it is buying Abbott Labs for the purpose of moving to the Netherlands and enjoying lower taxes.
As Andrew Ross Sorkin detailed in a New York Times article titled “Reluctantly, Patriot Flees Home,” Ms. Bresch was recipient of a “Patriot of the Year” award by Esquire Magazine, one of the literally thousands of bogus awards given by nonprofit organizations and the news media to corporate executives every year. Bresch won the Patriot Award not for acts of valor or self-sacrifice—but for having the connections to lobby for the Food and Drug Administration Safety and Innovation Act of 2012, which gives the FDA the authority to collect user fees for the drug and equipment reviews it conducts.
Let’s grant Ms. Bresch the benefit of the doubt and assume that unlike virtually every other instance of an industry initiative to regulate itself, Bresch’ proposal was not a watered down version of what should have passed if Congress truly had in mind the best interests of the public. But even making the incredulous assumption that she acted altruistically, Ms. Bresch has certainly not behaved as a patriot in her massive tax avoidance scheme.
A true patriot pays taxes—when represented, as Bresch so ably is, in part by her father, a Democratic Senator and former Governor of West Virginia.
A true patriot looks at the state of our roads, the state of our education system, the diminishing sums for medical and other research, the high price of college, the staggering poverty in the land of plenty and then does what he or she—or it if in the case of corporations—can do to help. Instead Ms, Bresch and her company, like Pfizer, Abbvie, Tyco, Walgreens, Medtronic, Chiquita and dozens of other companies, decided to buy a smaller foreign competitor and renounce American citizenship to take advantage of a gaping loophole in the U.S. tax code.
Ms. Bresch is old hat at not being what she seems. For years her resume said she earned a Masters of Business Administration from West Virginia University. In 2007, the Pittsburgh Post-Gazette called WVU on a routine fact check after seeing a news release announcing Bresch’ appointment as Mylan’s chief operating officer only to learn that Ms. Bresch did not in fact have a degree. What happened next bordered on low slapstick: WVU said Bresch had not earned her MBA, then called back days later to change its mind. In the interim, the university awarded Bresch a post facto MBA even though she was some 22 credits short of a degree that requires 48 credits. To do so, higher ups gave her grades for courses in which she had received “incompletes” and added six additional courses to her academic record. The Post-Gazette had a field day reporting WVU cooking the academic books to award a bogus degree and the university’s subsequent weak attempts to cover it up. Heads rolled throughout the university.
Forgotten in the academic scandal that dominated the news media in West Virginia and western Pennsylvania for months were two things:
1. There must have been enormous political pressure on WVU for so many of its administrators to behave so unethically. It is unclear from where that pressure came, given that the Governor at the time was Heather’s daddy and the chairman of Mylan at the time was WVU’s largest donor.
2. Bresch lied about having earned an MBA and continued to lie even after the Post-Gazette called her on it. (Denying the truth may the modus operandi at Mylan. About two years later, then CEO Robert Coury insisted that an FDA investigation had ended even after the FDA said it was ongoing.)
Sorkin, who neglects to mention Bresch’s past brush with resume-padding, expresses surprise that the “patriot” acted so unpatriotically, but it makes perfect sense to me. In the United States, we learn that the most patriotic thing to do is to open or run a business. We also learn that a business is supposed to maximize profit for it shareholders in a legal manner, no matter how ethically repugnant it may seem. Lay off thousands of workers so that profit margins increase. Leave communities to chase cheaper labor and laxer environmental regulations. Suspend manufacture of needed pharmaceuticals because the profit margins are too narrow. Buy smaller foreign companies and move abroad to avoid taxes. All of it is ”just business,” in the words of fictional businessman Michael Corleone.
The syllogism is perfect:
· Running a successful business is patriotic
· Business rewards amoral if legal conduct, as long as it produces a profit
· Abandoning the U.S. and denying its government of millions of dollars that could be used for safety, education, infrastructure investment, protection of the weak and security is good business.
· Abandoning the U.S. is patriotic
Those who think I’m just joking haven’t followed the past 35 years of the federal government facilitating the globalization of large American businesses to the detriment of U.S. workers and communities. It’s this record that makes me doubt that Congress will hear the cries of “unfair” that many are making and change the law so that any country that makes money in the United States has to pay the U.S. tax rate no matter how the business structures itself or where it locates its headquarters.
If you want to sell to U.S. consumers, you should have to pay U.S. taxes and at the same rate as domestic companies. That’s only fair, but fairness has nothing to do with business, nor, in the age of the politics of selfishness, does it have anything to do with either governance or tax policy.