Bill Gates, big money, and dubious philanthropy

One more confirmation that American journalism is dying comes from a stunning report in PloS Medicine that represents a stunning and very important piece of solid investigative reporting, the kind that’s dying in the nation’s newsrooms.

The author’s aren’t reporters; they’re physicians, and they’ve an exemplary job of reporting on a very important subject.

We discovered their research through a link in a Sonia Shah story in Le Mode Diplomatique, which included this:

In this month’s PLos Medicine, global health experts from Harvard, the University of California and the London School of Tropical Medicine and Hygiene wonder whether the Gates Foundation, with corporate stock heavily invested in manufacturers of health-damaging sugary drinks and sickness-reliant drug companies, can be trusted as an independent financier of the public’s health. Privately, one global health expert tells me he suspects the private sector’s involvement in the war on malaria might be some kind of novel form of disaster capitalism, with today’s corporate donors to global health aid becoming tomorrow’s corporate owners of people’s health care services.

The study, published in the journal’s April edition and  titled “Global Health Philanthropy and Institutional Relationships: How Should Conflicts of Interest Be Addressed?,” was authored by David Stuckler of Harvard’s Department of Global Health and Population, Sanjay Basu of the London School of Hygiene & Tropical Medicine’s Department of Public Health and Policy, and Martin McKee of the Division of General Internal Medicine, San Francisco General Hospital.

They begin with a summary  their findings:

  • Institutional relationships in global health are a growing area of study, but few if any previous analyses have examined private foundations.
  • Tax-exempt private foundations and for-profit corporations have increasingly engaged in relationships that can influence global health.
  • Using a case study of five of the largest private global health foundations, we identify the scope of relationships between tax-exempt foundations and for-profit corporations.
  • Many public health foundations have associations with private food and pharmaceutical corporations. In some instances, these corporations directly benefit from foundation grants, and foundations in turn are invested in the corporations to which they award these grants.
  • Personnel move between food and drug industries and public health foundations. Foundation board members and decision-makers also sit on the boards of some for-profit corporations benefitting from their grants.
  • While private foundations adopt standard disclosure protocols for employees to mitigate potential conflicts of interests, these do not always apply to the overall endowment investments of the foundations or to board membership appointments.
  • The extent and range of relationships between tax-exempt foundations and for-profit corporations suggest that transparency or grant-making recusal of employees alone may not be preventing potential conflicts of interests between global health programs and their financing.

Our interest was piqued by their findings concerning one foundation in particular, the Bill and Melinda Gates Foundation.

Here are their findings:

Where Does the Money Come From?

The Bill & Melinda Gates Foundation’s endowment mainly comes from Bill Gates’ personal fortune and stock in Berkshire Hathaway given to the Foundation as a gift from Hathaway’s CEO Warren Buffett. In 2006, Buffett made a pledge to gradually give away all of his Berkshire Hathaway stock to the Bill & Melinda Gates Foundation, most recently with an additional 24.7 million shares in July 2010. Currently, the Bill & Melinda Gates Foundation is listed with the SEC as a 10% owner of the Berkshire company.

At the end of 2008, the Bill & Melinda Gates Foundation Trust had US$29.6 billion assets under its management: $13.5 billion were in corporate stock, $1.8 billion in corporate bonds, $6.1 billion in US and state government obligations, and $8.2 billion in other investments, land, and temporary holdings.

. . .[T]he Bill & Melinda Gates Foundation’s corporate stock endowment is heavily invested in food and pharmaceutical companies, directly and indirectly. The Foundation holds significant shares in McDonald’s (9.4 million shares representing about 5% of the Gates’ portfolio), and Coca-Cola (>15 million shares, over 7% of the Foundation’s portfolio, not counting Berkshire Hathaway holdings). In 2009 the Bill & Melinda Gates Foundation sold extensive pharmaceutical holdings in Johnson & Johnson (2.5 million shares), Schering-Plough Corporation (14.9 million shares), Eli Lilly and Company (about 1 million shares), Merck & Co. (8.1 million shares), and Wyeth (3.7 million shares).

About half of the Bill & Melinda Gates Foundation’s stock holdings are already invested in Berkshire Hathaway, a conglomerate holding company owning several subsidiary companies, including banks, railroads, candy production, retail, and utilities. Thus, it is necessary to examine the holdings of the Berkshire company to analyze the Foundation’s stock holdings. Berkshire Hathaway’s largest investment is in Coca-Cola. It owns an additional 8.7% of Coca-Cola (Warren Buffett’s firm is the largest shareholder in Coca-Cola, having stock worth >$10 billion dollars) and 6.3% of Kraft (Buffett is also the largest shareholder of Kraft). Berkshire Hathaway also has significant ownership in GlaxoSmithKline, Sanofi-Aventis, Johnson & Johnson, and Procter & Gamble, and is one of the main global investors in the latter two pharmaceutical companies. Since Buffett is gradually transferring ownership of Berkshire Hathaway stock to the Bill & Melinda Gates Foundation, the Foundation will soon be the largest stakeholder of Coca-Cola and Kraft in the world.

Another noteworthy section:

Warren Buffett, the second-largest donor to the Foundation and a board member, was a member of the board of Coca-Cola from 1989–2006 (Figure S1; his son, Howard Buffett, is on the board of Coca-Cola Enterprises and ConAgra Foods [one of North America’s largest packaged food companies], which is invested in modern seed technology, as are other members of the board of Berkshire Hathaway).

And then there’s this:

Several grants are linked to companies that are represented on the Foundation’s board among its investments. The Foundation has established partnerships with the Coca-Cola Company, which, in the words of the Foundation, are intended to “create new market opportunities for local farmers whose fruit will be used for Coca-Cola’s locally-produced and sold fruit juices”. The program is a four-year, $11.5 million partnership for “mango and passion fruit farmers to participate in Coca-Cola’s supply chain for the first time,” with a $7.5 million grant provided by the Bill & Melinda Gates Foundation to TechnoServe, $3 million provided by The Coca-Cola Company, and $1 million by bottling partner Coca-Cola Sabco. This could reflect the recent comments of Melinda Gates in a webcast, “What we can learn from Coke,” suggesting that government agencies and nongovernmental organizations (NGOs) could learn from the manufacturer to promote global health in low- and middle-income countries.

Finally, this key section from their conclusion:

The question of whether and how financial and institutional relationships might shape foundation decision-making has yet to be answered, and continues to be a point of controversy. To draw a recent example, if a Chinese businessperson invested in the Chinese auto industry were to donate to the Hurricane Katrina relief efforts in New Orleans, such a donation would no doubt be welcomed; if the donation, however, was conditional upon renovating New Orleans? factories to produce products for the Chinese auto industry, such a program may produce legitimate debate. Analogously, when the Gates Foundation is heavily invested in Coca-Cola and simultaneously works to orient developing country farmers towards production for Coca-Cola instead of alternative development strategies, such an approach has potential consequences for grant-receiving communities and their health.

Read the rest.

Now for some mandatory irony from Gates himself

Here’s the plutocrat himself, explaining his passion for solving public health problems, via TechFlash:

Over the last 100 years, advances in science, technology and medicine have led to a near doubling of life expectancy. But we’re really just at the beginning of understanding what the combination of great minds and great technology can do to improve peoples’ lives. In the coming decades, we’ll see astonishing breakthroughs in education, diagnosis and treatment of many illnesses and diseases, and other tough problems.

I’m an optimist, for sure. But I’m an impatient optimist. Which brings me to my second point: the world is getting better, but not fast enough and not for everyone. Preventable diseases continue to cut a wide swath through the developing world, killing millions of children every year. In the U.S. and abroad, vast amounts of human potential are squandered as the result of failures in early learning and education. Here in King County, as elsewhere, large numbers of families and individuals are experiencing preventable hunger and homelessness.

But if Gates is seriously committed to public health, how can he justify his funds’ investments?

Consider, for instance all that money invested in Coca-Cola, which lines its cans with bisphenol-A, a chemical that mimics the hormone estrogen and is implicated as a cuprit in two major public health crises.

BPA linked to early puberty in girls

Kathleen O’Grady reports for The Canadian Women’s Health Network:

In The Falling Age of Puberty in US Girls (2007), Sandra Steingraber, who is probably best known for her groundbreaking work on the links between environmental health contaminants and cancer, undertakes a thorough meta-analysis of the existing data on early puberty in girls.


Steingraber argues that more recently, particularly in the last several decades, trends in the decline of the onset of puberty in the United States (which are similar with other affluent countries or countries with similar ethnic heritage) seem to be responding to stimuli beyond nutrition and general health.

Her report highlights numerous studies which have linked exposure to chemicals in our environment, particularly endocrine-disrupting chemicals (which can mimic hormones in the body), to a plethora of health concerns, such as shortened gestational periods in fetal development, low birth weight babies, higher rates of obesity and poor insulin regulation in the body, which are all risk factors for early puberty. This should make us sit up and take notice, since as Steingraber says, “children are exposed continuously to low-level endocrine disruptors in their diets, drinking water and air supply.”

A more recent study by scientists from physicians at the University of Cincinnati reported in August confirms the trend:

A new study shows that the number of 7- and 8-year-old girls who have breast development is greater than that indicated in studies conducted 10 to 30 years earlier.

“What causes earlier onset of puberty isn’t entirely clear at this time, but we are looking closely at several different potential factors, including genes and environmental exposures, as well as how those two may interact with each other,” says lead author Frank Biro, MD, director of adolescent medicine at Cincinnati Children’s Hospital Medical Center and a professor of pediatrics at the University of Cincinnati (UC) College of Medicine.

The study is published online in the Aug. 9, 2010, issue of Pediatrics, the journal of the American Academy of Pediatrics. UC’s Paul Succop, PhD, and Susan Pinney, PhD, were collaborators in the study.

Here’s more, as the New York Times reported two years ago:

While historical shifts in puberty appear largely due to improved health and living conditions, the more recent changes in earlier breast development are more worrisome. Studies have documented that a number of chemicals, such as bisphenol-A used to make hard clear plastic containers, may act as endocrine disruptors and have estrogenic effects on the body.

BPA linked to declining sperm levels

BPA isn’t simply linked to women’s reproductive health. Here’s a report from Kaiser Permanente:

Increasing urine BPA (Bisphenol-A) level was significantly associated with decreased sperm concentration, decreased total sperm count, decreased sperm vitality and decreased sperm motility, according to a Kaiser Permanente study appearing in the journal of Fertility and Sterility.

The five-year study recruited 514 workers in factories in China and compared workers who had high urine BPA levels with those with low urine BPA. Men with higher urine BPA levels had 2-4 times the risk of having poor semen quality, including low sperm concentration, low sperm vitality and motility.

This is the among the first human studies to report an adverse association between BPA and semen quality. Previous animal studies found a detrimental association between BPA and male reproductive systems in mice and rats.

This study is the third in a series published by Dr. Li and his colleagues that examine the effect of BPA in humans. The first study, published in November 2009 in the Oxford Journals Human Reproduction, found that exposure to high levels of BPA in the workplace increases the risk of reduced sexual function in men. The second study, published in May 2010 in the Journal of Andrology, found that increasing BPA levels in urine are associated with worsening male sexual function.

Cokes refuses to remove BPA from its cans

Again, Coke uses BPA to line all those soft drink cans, omnipresent in the hands of America’s increasing fatter and preciously pubescent children, and the company has refused to remove it, as Susan Carpenter reported for the Los Angeles Times 28 April:

An increasing number of shareholders in the Coca-Cola Co. would like the world’s largest beverage firm to report on how it’s addressing the risk of Bisphenol A in its beverage cans, the shareholder advocacy group As You Sow reported Wednesday.

Twenty-six percent of Coca-Cola shareholders said they were concerned about the company’s use of BPA this year versus 22% last year, when As You Sow first introduced its resolution concerning Bisphenol A, or BPA, to shareholders.

BPA is a chemical that is often used in the liners of metal food and drink cans. Studies have shown BPA can leach from cans into food. Dozens of laboratory studies have linked BPA exposure to breast and prostate cancer, infertility, early puberty in girls, obesity and attention deficit hyperactivity disorder. According to the U.S. Centers for Disease Control and Prevention, 93% of Americans have detectable levels of BPA in their bodies.

Coca-Cola sells almost 570 billion beverage servings annually in a variety of packages, including cans.

The story doesn’t mention how the two foundations voted their shares.

There’s another culprit in early puberty as well, one linked directly to all that fast food and soft drinks that earn so much money for the Gates Foundation, obesity, as reported by The Guardian’s Polly Curtis three years ago:

Girls who are obese at the age of four are significantly more likely to hit puberty before their 10th birthday, according to research which predicts that puberty will come earlier in the UK as the child obesity crisis worsens.

The study is the first to track children from when they were toddlers to aged 12, and to establish a firm link between childhood obesity and early onset puberty.

The findings will add to pressure on the government to tackle the rising rates of child obesity.

The American researchers warn that the obesity crisis is now affecting children’s development, while British experts say that the trend will follow in the UK as childhood obesity reaches US levels.

Then there’s this conclusion, drawn by two Israeli researchers in the International Journal of Obesity in 2003 [emphasis added]:

The prevalence of obesity is increasing alarmingly among children and adolescents, especially in industrialized countries. Many of the metabolic and cardiovascular complications that are commonly associated with adult obesity begin in childhood. Among the most common sequelae of childhood obesity are hypertension, dyslipidemia, insulin resistance with increased risk of type II diabetes, and orthopedic and psychosocial problems (poor self-image, social isolation). However, physicians treating children and adolescents need to bear in mind that childhood obesity is associated with additional phenomena, namely, early puberty, premature adrenarche and the subsequent manifestation of polycystic ovary syndrome, and accelerated growth with impaired final height potential, all of which can already affect their quality of life. Understanding the antecedents of obesity-related complications in obese children is therefore of great importance.

Making money from a public health crisis

The good doctors writing in PLoS offer a partial list of companies benefitting from Gates Foundation and Berkshire Hathaway investment dollars, and in addition to Coca-Cola [in which their combined interest totals 9.12 percent, the Gates Foundation holds a stake in McDonald’s, Monsanto, and Coca-Cola FEMSA, the Mexican Coke bottling company.

Then there’s Sanofi-Aventis, in which Berkshire Hathaway holds a stake. That’s the same company that will be marketing the GMO-produced artemisinin developed by the UC Berkeley-spawned Amyris, Inc., albeit for no profit.

And Jay Keasling, the founder of Amyris — which was launched with Gates Foundation money — has also profited from business deals with Monsanto, the investment favorite of the Gates Foundation.

And, remember, Amyris — which uses its GMO bacteria to produce cosmetic chemicals — plans to develop agrofuels, in which Monsanto is a major player.

So, as that creepy Disney tune proclaims, “It’s a small world after all,” especially when it comes to money.

8 responses to “Bill Gates, big money, and dubious philanthropy

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