The year Bill Clinton became governor of Arkansas, the Arkansas state prison board awarded a hefty contract to a Little Rock company called Health Management Associates (HMA). The company got $3 million a year to run medical services for the state's awful prison system, which had been excoriated in a ruling by the U.S. Supreme Court as an "evil place run by some evil men."
HMA not only made money from providing medical care to prisoners, but it also started a profitable side venture: blood mining. The company paid prisoners $7 a pint to have their blood drawn [about half what urban skid road blood suckers pay for winos' blood]. HMA then sold the blood on the international plasma market for $50 a pint, with half of that going to the Arkansas Department of Corrections.
Since Arkansas is one of the states that does not pay prisoners for their labor, prisoners were frequent donors at the so-called "blood clinic". Hundreds of prisoners sold as much as two pints a week to HMA. The blood was then sold to pharmaceutical companies, such as Bayer and Baxter International; to blood banks, such as the Red Cross; and to so-called blood fractionizers, which transform the blood into medicines for hemophiliacs.
HMA's contract with the Arkansas DOC and its entry into the blood market came at the same time as the rise of AIDS in the United States. Regardless, HMA did not screen the torrents of prison blood, even after the Food and Drug Administration issued special alerts about the higher incidence of AIDS and hepatitis in prison populations.
When American drug companies and blood fractionizers stopped buying blood taken from prisoners in the early 1980s, HMA turned to the international blood market, selling to companies in Italy, France, Spain and Japan. But the prime buyer of HMA's tainted blood, drawn largely from prisoners at the Cummings Unit in Grady, Arkansas, was a notorious Canadian firm, Continental Pharma Cryosan Ltd.
Cryosan had a shady reputation in the medical industry. It had been nabbed importing blood taken from Russian cadavers and relabeled as from Swedish volunteers. The company also marketed blood taken from Haitian slums.
Cryosan passed the tainted Arkansas prison blood on to the Canadian Red Cross and European and Asian companies. The blood was recalled in 1983 after the contamination was discovered by the FDA. But less than one-sixth of the blood was recovered. In Canada alone more than 7,000 people have died from receiving contaminated blood, many of them hemophiliacs. More than 4,000 of these died of AIDS. Another 40,000 people in Canada have contracted various forms of hepatitis.
A $300 million class action suit has been filed on behalf of the Canadian victims of Cryosan's tainted blood. According to one of the attorneys for the plaintiffs, David Harvey, the suit names Bill Clinton and officials at the Arkansas DOC as defendants.
Cryosan's former president, Ted Hecht, doesn't believe his company did anything wrong. "Don't look upon me as a villain in the piece. We supplied US-government licensed product and never denied its origins," he told the Ottawa News , which first broke the story in September, 1998. "I never forced anyone to buy my product. If they didn't want it, they didn't have to buy it. I didn't shove it down their throats."
Hecht may have a point. His plasma packages were labeled, "ADC, Grady Arkansas". But the Arkansas DOC and its contractor, HMA, have few excuses. They oversaw a shoddily-run prison blood-drawing operation that cross-contaminated prisoners and let loose on the global blood market thousands of pints of plasma they had good reason to believe may have been contaminated with lethal disease.
Dr. Francis "Bud" Henderson founded HMA in the 1970s. As the company began to expand, he brought in a Little Rock banker named Leonard Dunn to run the firm, while he served as its medical director. Dunn was a political ally and friend of the Clintons. He was appointed by Clinton to sit on the Arkansas Industrial Development Commission and served as finance chair of Clinton's 1990 gubernatorial campaign. Later that same year, Dunn bought the famous Madison Guaranty Savings and Loan from Clinton's business partner James McDougal. Dunn now serves as chief of staff to Arkansas Lt. Governor, Winthrop Rockerfeller.
In 1983, the Food and Drug Administration stripped HMA of its license to sell blood after it found that the company failed to exclude donors that had tested positively for hepatitis B, often a precursor of HIV. A state police report compiled as part of an investigation into the company's operations at the Cummings Unit noted that the FDA pulled the HMA's license to sell blood "for falsifying records and shipping hot blood." The report goes on to say that "the suspension was for collecting and shipping plasma which had been collected from donors with a history of positive tests for [hepatitis B] ... the violations were directly related to using inmate labor in the record and donor reject list."
Dunn's ties to Clinton served HMA well. He and Arkansas DOC officials convinced the FDA that the fault lay with a prison guard who was taking kickbacks from rejected prisoners in order to let them get back into the blood trade. The license was quickly restored and the tainted blood once more began to flow.
That didn't end the investigations, however. HMA's contract was up for renewal by the prison board and its slipshod record posed a big problem for the firm. When investigators began probing the company's practices, including allegations of prisoner abuse, Dunn repeatedly boasted of his ties to Bill Clinton.
"Mr. Dunn spoke openly and freely and explained to these investigators that he was the financial portion of the corporation as well as its political arm," investigator Sam Probasco noted in his report. "Dunn advised that he was close to Gov. Clinton as well as the majority of state politicians presently in office."
The allegations against the company involved numerous health and safety violations, failure to test for diseases such as hepatitis and syphilis, bad bookkeeping and outright falsification of records. HMA officials maintained the problems were minor and that the blood program was actually driven by a need to give prisoners "pocket money" to buy cigarettes and other personal items.
"The inmates had no way to earn hard dollars except by selling plasma," said HMA's Dr. Henderson. "The prison population was fairly restless anyway."
Of course, many of the prisoners paid a heavy price for the miserly $7 they got for each pint. It seems that even with the onset of AIDS, the Cummings blood center often skimped, drawing blood from multiple patients with the same needle. Several former prisoners are prepared to file suit, charging that they contracted hepatitis and AIDS from dirty needles used in the blood program.
According to Michael Galster, who worked as a medical specialist at the Cummings Unit at the time, HMA hired Vince Foster, then with the Rose Law firm, to help squash the state's investigation. Foster seems to have accomplished the task; the state's internal investigation of HMA cleared the company of any wrongdoing.
But an independent review by the Institute for Law and Policy Planning, a California firm, concluded that HMA's work in the prisons was extremely deficient. Their report cited more than 40 contract violations and was replete with instances of negligent care of prisoner patients and in its handling of the blood center. Much of the blame was placed on another Clinton pal, Art Lockhart, head of the Arkansas DOC.
When the independent review came out, pressure mounted for Clinton to fire Lockhart. Clinton swiftly nixed the idea, telling reporters that he didn't believe the allegations were serious enough for 'him to "ask Mr. Lockhart to resign."
The Arkansas State Police launched a half-hearted investigation into allegations that HMA was awarded a renewal of its contract after bribing members of the state prison board. The investigation soon focused on an attorney named Richard Mays, a close friend of Bill and Hillary Clinton. Mays was given at least $25,000 by HMA to act as an "ombudsman" for the company, a position that apparently carried no job description and no responsibilities.
Mays, who served as a vice-president for finance at the Democratic National Committee, has been at the heart of several Clinton scandals. In 1996, he was credited with securing Little Rock restaurateur Charlie Trie's $100,000 contribution to the Democratic Party's coffers. He also pops up in the Whitewater probe, where he tried to stave off the federal prosecution of David Hale. Mays and his wife have been frequent visitors to the White house, including an overnight stay in the Lincoln bedroom. Dunn claims that Mays was recommended to him by Clinton and prison board chairman and Clinton intimate, Woodson Walker.
In 1986, HMA's contract was revoked. But that didn't stop the Arkansas DOC's prison blood program. A new company, Pine Bluff Biologicals, took over the blood center and expanded it to include two other Arkansas prisons. The new company's safety record turned out to be about as dismal as HMA's. Screening for AIDS was particularly lax. Pine Bluff's president Jimmy Lord dismissed such concerns and suggested that AIDS was not a problem in Arkansas.
"If anyone [prisoners] got caught in a homosexual act," Lords recently told Arkansas reporter Suzi Parker, "we took them off the [blood donation] roster."
By the late 1980s, Arkansas was the only prison system in the United States still running a blood program. In 1991, a reporter for the Arkansas Times asked John Byus, medical director of the Arkansas Corrections Department, how much longer they planned to continue the operation: "we plan to stick with it till the last day, to the last drop we're able to sell."
The program stayed in operation until Bill Clinton moved to Washington. It was finally shut down in 1993 by his successor, Jim "Guy" Tucker.
Editor's Note: This article originally appeared in the February 1-15, 1999 issue of CounterPunch , edited here for length and clarity. Reprinted by permission of the author and CounterPunch co-editor, Jeffery St. Clair.
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