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Second District race: What it would mean to elect a former medical device executive to Congress

The industry already has a lot of friends in Congress. But Angie Craig’s involvement with the medical device sector goes a lot deeper than a few campaign contributions.

Angie Craig worked at St. Jude Medical from 2005—2015, working in communications and human resources and helping direct the company’s PAC.
Courtesy of Angie Craig for Congress

The attack ads on Jason Lewis, the GOP candidate for Minnesota’s open 2nd Congressional District seat, basically write themselves. The Woodbury native had a lengthy career as a radio host and conservative author, a perch he used to make controversial remarks on women and slavery.

Minnesotans are talking about Lewis’ past, and for good reason. But what’s been placed on the backburner is the professional past of his opponent, DFL nominee Angie Craig.

Craig, 44, spent a decade as an executive at St. Jude Medical, the Fortune 500 medical technology company based in Little Canada, and has touted her work there as a primary reason why 2nd District voters should choose her to serve in Congress.

The Minnesota medical technology sector is very powerful, and basically all members of the state congressional delegation, regardless of party or district, have gone to bat for it in Congress.

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But Craig, if elected, would be the only one with actual experience in the field — making her an appealing ally in Congress for the industry, which is active in Washington.

Craig’s background hasn’t escaped Lewis and the Republicans, however. They’ve tried to turn Craig’s career into a weakness, connecting well-publicized problems at St. Jude Medical to the candidate and slamming her work directing the company’s PAC as unseemly.

Partisan attacks are to be expected in a closely fought congressional contest, but Craig’s ties to the industry do raise an important question: namely, what might it mean for federal policy if the Second District were to elect a former medical device executive to represent it in Congress?

Craig’s history at St. Jude Medical

It’d be almost too perfect for Minnesotans to elect to Congress someone from the medical technology world: the sector is one of the state’s core industries — supporting up to 100,000 jobs and creating billions in economic impact.

Only California, six times more populous than Minnesota, outpaces the state in the medical device field.

There are over 600 companies in the medical technology field based in Minnesota, but a handful of big players account for the vast majority of revenue — and St. Jude Medical is one of them.

The corporation is headquartered in Little Canada, just north of St. Paul, but has operations in Los Angeles and Austin, Texas; it also operates abroad in Belgium, China, and Japan. In total, it employs 18,000 people globally.

Courtesy of St. Jude Medical
St. Jude’s headquarters in Little Canada.

It is a public company traded on the New York Stock Exchange, posted revenue of $5.6 billion in 2014, and has made the Fortune 500 every year since 2010.

The company, founded in 1976, specializes in cardiovascular technology like pacemakers and defibrillators. Earlier this year, multinational healthcare corporation Abbott Laboratories agreed to buy St. Jude Medical for a reported $25 billion.

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Craig arrived at St. Jude Medical in 2005, and started out managing corporate communications. Over the course of the next decade, she largely worked in an internal and external communications capacity, managing the company’s relationships with employees and the media.

Toward the end of her time there — she left in 2015 before running for office — she was in charge of the company’s global human resources division, managing hiring, benefits plans, and other workplace initiatives.

It’s that last thing Craig has touted most on the campaign trail: in campaign materials and advertising, she’s emphasized in particular St. Jude Medical’s initiatives to hire veterans and advance women in the company.

During her time at the company, Craig also worked with the company’s political action committee, doling out campaign contributions to industry allies in Congress. She served on the PAC’s board from 2006 to 2011 and directed it in 2011.

Like other medical device companies, St. Jude Medical is an influential presence in Washington, and has bankrolled the campaigns of Republican and Democratic lawmakers to the tune of $770,000 since 2000.

It has ramped up spending in recent years: since 2010, it has spent over $610,000 on campaign contributions.

Minnesota members have benefited greatly from St. Jude Medical’s checks: from the 2010 election cycle to this election cycle, the PAC has given $77,500 to five Minnesota candidates for office: Sens. Amy Klobuchar and Al Franken, Reps. Erik Paulsen and Betty McCollum, and Craig.

Thus far, St. Jude Medical has stepped up big for Craig: the PAC has given $10,000 to her campaign, while employees of the company have contributed over $115,000. (Per FEC rules, private citizens can give $5,400 total to a candidate’s committee — $2,700 for the primary and $2,700 for the general.)

Craig told MinnPost “I had a great relationship with a number of my colleagues, and they know I’m going to be someone who uses common sense as a member of Congress in Washington, and they have been supportive of my campaign as a result of that.”

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GOP pins St. Jude Medical’s problems on Craig

Republicans’ strategy in attacking Craig’s career has centered on two things: connecting her to problems at St. Jude Medical, and highlighting her work with the company PAC.

For example, this summer, financial analyst Carson Block claimed that St. Jude Medical’s cardiovascular devices were vulnerable to hackers, potentially leading to disastrous consequences. In a press release, the state GOP used the incident to claim the company “put profits before patients.”

St. Jude Medical, whose stock value declined after Block’s announcement, pushed back hard, calling the claims false, and alleging it was intended to drive down the company’s value as part of a profit-making scheme. (The company filed a lawsuit against his firm and others in federal court in September.)

Republicans also made hay of a 2012 episode, in which St. Jude Medical settled with the U.S. Department of Justice, for $3.65 million, over claims that it had “overcharged for implantable cardiac devices.”

The Department of Justice said the company overstated the price of products it was selling to Veterans Affairs and Department of Defense Hospitals; in a press release, the Minnesota GOP claimed that the company “lied to our veterans.”

St. Jude Medical did not admit wrongdoing after the settlement, only saying it was “pleased” to have resolved it.

Lewis said that Craig couldn’t claim an influential role at St. Jude Medical without taking some responsibility for some of the company’s troubles in the past.

“If you’re running TV ads saying while Jason Lewis was talking I was helping lead from the boardroom,” he said, “were you or weren’t you?”

Craig said Lewis misunderstands her role at the company, and argued it was unreasonable to pin its problems on her.

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“The issues they point to are around things like product design, billing disputes, each of those items they’re pointing to are independent of my responsibilities at a 18,000 employee company,” Craig said.

She added that it would be ridiculous to ask Lewis to answer for everything said by other people in the network that syndicates Lewis’ radio show — she named Rush Limbaugh and conspiracy theorist Alex Jones.

“I’m happy to talk about what I had responsibility for,” Craig said, “and that’s what I’ve talked about in my campaign so far.”

Craig, the PAC, and the device tax

Beyond that, the Republican camp is homing in on Craig’s position with the company PAC to accuse her of “pay to play” politics, in the words of a Lewis campaign press release.

“Similar to Hillary Clinton, Ms. Craig seems to have excelled in a system in which campaign contributions are doled out in exchange for government favors,” the release said.

Lewis highlighted Congress’ successful suspension of the Affordable Care Act’s 2.3 percent tax on medical devices, calling it an instance of “crony capitalism” that underscores frustration with Washington on both sides.

“Obviously they were successful in getting Obamacare passed and getting the tax on their industry repealed,” Lewis said. “No one was more opposed to the medical device tax than I was but because I was opposed to the Affordable Care Act.”

“Angie’s position was, I was for the ACA but when it comes to paying for it, she helped re-engineer the repeal. You can’t have it both ways in that context.”

Craig pushed back on those attacks, saying “you’re not going to find a Fortune 500 company in Minnesota that doesn’t belong to a trade organization that represents their industry.”

“I sort of chuckle when I think about my time at the St. Jude PAC, because the PAC donated far more to Republicans than they did to Democrats,” Craig said.

Indeed, St. Jude Medical has tended to give more to Republicans than Democrats — though 2016 is the first cycle in which the PAC and its employees have given more to Democrats. (That’s because the PAC and employees have combined to give Craig $125,000 — without her, the company significantly favors the GOP.)

Shaye Mandle, CEO of Medical Alley, a trade group that represents the Minnesota medical technology sector, said the industry community should be “proud as a community of the work St. Jude does… I think Angie should be proud of her time at St. Jude.”

Without naming Lewis, he pushed back against some of the attacks he’s leveled. “It is from my perspective a silly political ploy to attach everything that happened at a big corporation to an individual,” he said.

Mandle also cast Craig’s work on the political side at St. Jude Medical as a strength. He said she “has always been someone more interested and more savvy about politics and the role of government than a lot of business executives.”

“If she gets elected, her learning curve for how to function in a political environment is going to be shorter than perhaps other executives.”

Industry already has plenty of D.C. advocates

Whoever wins this seat, though, will be under pressure to be a friend to the medical device industry.

The 2nd District is home to dozens of medical technology companies, and the state delegation’s support of the industry’s top policy objectives is rock-solid. In particular, Rep. Paulsen has been the go-to guy in the House on the device tax suspension; Sen. Klobuchar has also been a top industry advocate in the upper chamber.

People like Shaye Mandle are watching the 2nd District race and others closely.

Craig once served on the board of Medical Alley, and Mandle knows her well. There is no doubt in his mind that Craig would be an asset for his industry on Capitol Hill.

(According to April financial disclosure forms, Craig earned up to $1 million through St. Jude Medical qualified stock options, but she says she has liquidated all her vested stock, and would eliminate any financial connection to the company if elected.)

“Angie would certainly bring something to the Hill for our industry that we haven’t had before,” Mandle told MinnPost. “There’s no doubt that having a former med tech executive in Congress is a unique opportunity for the industry to have someone there who really knows what they’re talking about.”

Generally, the industry has already been very successful in Washington: the 114th session of Congress saw some major policy victories for the medical technology sector, which they would like to see continued in the 115th Congress.

In December 2015, Congress was able to secure a two-year suspension of Obamacare’s tax on medical devices — a longstanding goal of the industry and virtually the entire Minnesota congressional delegation.  

In summer 2015, the House of Representatives passed the 21st Century Cures Act, a wide-ranging piece of legislation that, among other things, would make the Food and Drug Administration’s medical device approval process speedier — “more streamlined,” advocates said.

The editorial board of the Star Tribune endorsed the bill in an editorial, claiming it’d be a benefit to the Minnesota medical technology sector, and downplayed safety concerns resulting from a streamlined F.D.A. approval process.

To some, 21st Century Cures demonstrates how powerful the medical device industry already is in D.C.: Minnesota-based healthcare watchdog site Health News Review described legislators and regulators working “hand-in-glove” with industry representatives in crafting the language for the bill. (St. Jude Medical spent $770,000 on lobbying in 2015, per money in politics watchdog OpenSecrets.)

Mandle says the industry’s priorities in the upcoming Congress are to get the device tax suspension renewed again — it expires in December 2017 — or abolished altogether. The Senate also has not taken up the 21st Century Cures Act; leaders in the upper chamber have indicated they will advance components of it separately.

He envisions Craig as an ally in getting these goals accomplished, but underscored that he expected to work with Lewis if he were to win.

“I’d say that whoever wins that race, if Jason wins, he’ll definitely be working with us,” Mandle said. Lewis said he’d happily work with the medical device industry, or any other industry in the district, if elected.

“This is an important industry and if you’re not engaged with it, you’re not doing your job as a Minnesota member of Congress,” Mandle said.

As for Craig, she would certainly back parts of the industry’s policy agenda in Washington. She expressed opposition to the medical device tax, but made clear that she would prefer to keep it in place if it meant saving the Affordable Care Act, which she strongly supports.

That’s a position held by most of Minnesota’s Democrats, who would like to see the revenue lost from the tax – around $24 billion — accounted for elsewhere. A permanent mechanism to accomplish that has not yet been agreed upon.

“If we can still afford the Affordable Care Act without the medical device tax I’d support repealing it,” Craig said. “If it’d mean that millions of Americans would lose access to coverage I’d not support repealing it.”

Craig said her experience would give her a unique perspective among members of Congress, but took pains to emphasize that her close ties with the industry would not unduly influence her work if she were to be elected.

“When I think about working with the med tech industry, I always check myself, and ask, am I taking a balanced approach in thinking through these issues?” Craig asked.

“At the end of the day, I’ve been given an inside view. I will always prioritize the health of my constituents as a member of Congress.”