Medical supplier Stryker probed

A major medical equipment supplier, whose owners have spent millions of dollars helping elect Democrats nationwide, is under criminal investigation for its foreign sale of medical devices after already being tied to a kickback scheme involving U.S. doctors, public records show.

A subsidiary of Stryker Corp. of Kalamazoo, Mich., last year signed an agreement to avoid prosecution and cooperate in the probe involving consulting contracts, trips and gifts to U.S. doctors.

But it recently informed investors in a Securities and Exchange Commission filing that the Justice Department’s Criminal Division is investigating the company for “possible violations of the Foreign Corrupt Practices Act.” That law prohibits U.S. companies from paying bribes overseas.

The company, founded in 1941 by Dr. Homer Stryker, an orthopedic surgeon, is partly owned by his three grandchildren, Jon, Pat and Rhonda Stryker. Not including other stock holdings, the siblings control a trust that owns nearly one-fourth of the $6 billion company.

Jon Stryker alone has given at least $6 million to federal and state political campaigns since 2004. According to the nonpartisan Center for Responsive Politics, he and his sister, Pat, rank among the nation’s top individual donors by giving hundreds of thousands of dollars to “soft money” special interest political groups in 2006 on top of their donations to candidates and political parties.

For instance, Pat Stryker separately contributed $500,000 to the Michigan Coalition for Progress, which successfully helped return Democrats to control of the state legislature in the last election.

Family ties

Stryker Corp. officials said that while the company is partly owned by the Stryker siblings, the family has no hand in running the daily affairs of the business.

“They are owners of the company, but they do not have management experience,” said Stryker Corp. spokesman J. Patrick Anderson, adding that any contributions by the company’s executives and the Stryker siblings are made independently. “There would be no direct ties at all.”

In 2006, the company found itself in the cross hairs of Republican state leaders in Colorado and Michigan, where Jon Stryker, who founded the Michigan Coalition, and Pat Stryker have donated millions of dollars to help Democratic candidates and causes.

“Jon Stryker bought a legislative majority in the statehouse for the Democrats in 2006,” said Bill Nowling, director of communications and research for the state’s Republican Party.

A spokeswoman for Mr. Stryker declined to comment, saying only that his political activities have no relationship to the company.

Stryker Corp. owned one of five companies that agreed last year to settle a criminal investigation by U.S. Attorney Christopher J. Christie in New Jersey that focused on their payments to U.S. surgeons.

Stryker Orthopedics Inc., the Mahwah, N.J., subsidiary of the Stryker Corp.; Zimmer Holdings Inc.; Depuy Orthopaedics Inc.; Biomet Inc.; and Smith & Nephew Inc. together supplied nearly 95 percent of the lucrative worldwide market in hip and knee surgical implants.

Common corruption

Story Continues →