Donors who have given money to four of the largest cancer charities in the United States may have unknowingly been financing the lavish lifestyle of the C.E.O. who runs them—paying for luxury cruises, elite gym memberships instead of treatment for cancer patients.
That’s according to a suit filed Tuesday by the Federal Trade Commission as well as attorneys general in all 50 states, which alleges that James Reynolds deceived and defrauded donors out of more than $187 million between four of his charities—including the Cancer Fund of America, Cancer Support Services, Children’s Cancer Fund of America and the Breast Cancer Society.
The complaint says that the scheme started in the 1980’s. The charities told donors via telemarketing calls that their money would go toward medicine and transportation for cancer patients. However, most of the money actually went toward Reynolds’ personal indulges.
The complaint says that between 2008 and 2012, only three percent of donations actually went to cancer patients.
The FTC also accuses the organizations of cooking their books and reporting inflated revenues as well as “gifts in kind” that they said they distributed internationally.
The FTC said two of the charities—the Children’s Cancer Fund of America and the Breast Cancer Society plan to settle the charges out of court. The Associated Press reported that the Breast Cancer Society, posted a statement on its website Tuesday blaming increased government scrutiny for the charity's downfall.
"While the organization, its officers and directors have not been found guilty of any allegations of wrongdoing, and the government has not proven otherwise, our board of directors has decided that it does not help those who we seek to serve, and those who remain in need, for us to engage in a highly publicized, expensive, and distracting legal battle around our fundraising practices," the statement said.
Several executives who were also involved in the sccheme, including Reynolds’ son, have agreed to a settlement, which bans them from working in fundraising or charities. The two charities that settled, Breast Cancer Society and the Children’ Cancer Fund of America will be dissolved.
The settlement also orders a $65,664,360 judgment, which is the amount consumers donated between 2008 and 2012. Reynolds junior’s judgment will be for suspended once he pays $75,000. Meanwhile the legal proceedings for Reynolds’ senior and the two remaining charities are ongoing.
Democratic presidential candidates are proposing a variety of new taxes to pay for their preferred social programs. Bloomberg’s Laura Davison and Misyrlena Egkolfopoulou took a look at how the top four candidates would fare under their own tax proposals.
“The fact is very little medical care is shoppable. We become good shoppers when we are repeat shoppers. If you buy a new car every three years, you can become an informed shopper. There is no way to become an informed shopper for your appendix. You only get your appendix out once.”
— David Newman, former director of the Health Care Cost Institute, quoted in an article Thursday by Noam Levey of the Los Angeles Times. Levey says the “consumer revolution” in health care – in which patients shop around for the best prices, forcing doctors, hospitals and pharmaceutical firms to compete with lower prices – hasn’t materialized, but the higher deductibles that were part of the effort are very much in effect. “High-deductible health insurance was supposed to make American patients into smart shoppers,” Levey writes. “Instead, they got stuck with medical bills they can't afford.”
The House Ways and Means Committee released a new analysis of drug prices in the U.S. compared to 11 other developed nations, and the results, though predictable, aren’t pretty. Here are the key findings from the report:
- The U.S. pays the most for drugs, though prices varied widely.
- U.S. drug prices were nearly four times higher than average prices compared to similar countries.
- U.S. consumers pay significantly more for drugs than other countries, even when accounting for rebates.
- The U.S. could save $49 billion annually on Medicare Part D alone by using average drug prices for comparator countries.
The U.S. ranks 18th for retiree well-being among developed nations, according to the latest Global Retirement Index from Natixis, the French corporate and investment bank. The U.S. fell two spots in the ranking this year, due in part to rising economic inequality and poor performance for life expectancy.