The Tom Harkin
Donation Business Model

Herbal supplement company donates heavily to Tom Harkin, business booms

Harkin, Herbalife / AP
January 16, 2013

The largest financial supporter of Sen. Tom Harkin’s numerous campaigns and a prominent donor to the Harkin Institute of Public Policy at Iowa State University is also a prominent beneficiary of health care policies supported by the Iowa Democrat.

Herbalife International is a "global nutrition company that has helped people pursue a healthy, active life since 1980," according to its website. The company sells dietary and weight-loss products through independent distributors.

Herbalife’s employees and PACs were Sen. Harkin’s largest contributors between 1989 and 2012, according to the Center for Responsive Politics. They donated $87,636 during his most recent reelection campaign.

Herbalife also donated $100,000 to the Harkin Institute of Public Policy at Iowa State University, records show.

Herbalife may have benefitted from Sen. Harkin’s legislative prominence.

Harkin is chairman of the Senate Health, Education, Labor, and Pensions Committee. He "crafted the prevention and wellness title of the health reform bill, the Patient Protection and Affordable Care Act," his website says.

The wellness section of Obamacare promotes "prevention, wellness, and the public health and provides an unprecedented funding commitment to these areas" and "empowers families by giving them tools to find the best science-based nutrition information."

Title IV includes body mass index measurements in its preventative service appointments, which the law requires health insurance plans cover for free. Herbalife is well known for its weight-loss products.

Harkin also introduced the Dietary Supplement Health and Education Act (DSHEA) in 1994, which "revolutionized the way that supplements are regulated and sold in the United States," according to his website.

Herbalife also supported DSHEA, as it made clear in an interview with Sen. Harkin posted on one distribution website.

DSHEA "gave Americans the freedom and choice they enjoy in buying our products," Herbalife wrote.

Harkin spoke highly of Herbalife’s products during the interview. "I strongly believe in helping people help themselves and that’s what Herbalife’s all about," he said at the beginning of the interview. He continued to praise Herbalife throughout.

Herbalife’s stock value (NYSE: HLF) has risen substantially since the passage of the Affordable Care Act, aka Obamacare, in 2010. The stock had consistently hovered below $20 per share, rising to a maximum of $25. The price increased when Obamacare passed, topping out at $72.32 on April 20, 2012, before questions about the company's business model's legitimacy caused its stock value to drop dramatically.

Herbalife’s value bottomed out at $26.02 before rebounding to well above its pre-Obamacare peak. It is currently selling at $44.85 per share.

Herbalife’s profits also have risen sharply. Herbalife’s net income shot up by more than $100 million in 2011 over 2010. And Herbalife’s sales have risen from $1.3 billion in 2004 to $2.1 billion in 2007, $2.7 billion in 2010, and $3.5 billion in 2011.

Herbalife did not return multiple requests for comment.

Harkin Institute interim director David Peterson told the Free Beacon that the institute is not currently involved in any policy research and has not had any contact with Herbalife or any donors to the Institute.

"The donors have exactly zero influence on the institute’s research. There is no formal or informal mechanism for any donor to communicate any research agenda or priorities to the Harkin Institute. I have not spoken with any of the donors to the institute," Peterson wrote in an email. He indicated the Iowa Board of Regents guides the institute’s research.

The Harkin Institute itself has been mired in controversy. Harkin’s wife, who sits on the board, rammed approval of the institute through the Board of Regents before her allies rotated off, leaving some regents completely ignorant of the institute until shortly before the vote.

As the Free Beacon has reported previously, another business whose interests the senator has championed was one of the biggest donors to the institute. The Board of Regents has since voted to forbid any new academic centers from being named for an active politician.

Sen. Harkin’s office did not return a request for comment.

Published under: Cronyism , Tom Harkin