The Register Citizen (Torrington, CT)
Lawmakers: Why no charges against Purdue execs?
“Many will rightly wonder why drug dealers on the streets go to prison, while billionaire corporate executives can write a check.” Sen. Richard Blumenthal, D-Conn.
STAMFORD — In its approximately $8 billion settlement reached last week with the U.S. Department of Justice, Oxy Contin maker Purdue Pharma agreed to plead guilty to three felony charges. They carry the largest penalties ever levied against a pharmaceutical manufacturer.
But the punishment for the Stamford-based company was still far too lenient, according to some of the company’s most vocal critics.
“Real justice would mean holding individual lawbreakers criminally accountable and forcing them to face the criminal consequences of their wrongdoing,” Sen. Richard Blumenthal, D-Connecticut, said in an interview.
The Justice Department spent years investigating accusations of deceptive marketing and financial fraud in the firm.
Blumenthal, who sued Purdue when he previously served as state attorney general, and William Tong, the current attorney general, said they were dismayed that the federal probes did not produce criminal charges against any executives or any of the Sackler family members who own the company. The settlement did not rule out prosecution of individuals.
“Owners and managers should be held criminally responsible,” Blumenthal said. “Many will rightly wonder why drug dealers on the streets go to prison, while billionaire corporate executives can write a check.”
Blumenthal said he
wants to learn more about the settlement’s terms and said he would consult with other members of the Senate Judiciary Committee about steps that the panel might take.
Holding a hearing could be an option. If the committee were to schedule one, Blumenthal said he would not rule out calling to testify some of the Sacklers or Purdue executives.
“We need a better explanation from the Department of Justice,” Blumenthal said. “I’m hopeful we’ll have bipartisan interest in pursuing the questions that this settlement raises because they are serious and urgent.”
Purdue declined to comment for this article. Messages left this week for a spokeswoman for the Sacklers were not returned.
Charges for the company, not individuals
As part of its agreement with the Justice Department, Purdue accepted responsibility for misconduct that occurred before June 2017 and also resolved allegations connected to actions taking place between 2007 and 2018.
The company admitted that it obstructed the Drug Enforcement Administration by falsely representing that it had maintained an effective program to avert drug “diversion” — the misuse of prescription drugs — and by reporting misleading information to the agency to boost its manufacturing quotas.
Purdue also acknowledged that it violated anti-kickback law by paying doctors, through a speaking program, to encourage them to write more prescriptions for its opioids and using health-records software to influence the prescribing of pain drugs.
It agreed to a $3.5 billion criminal fine and a $2 billion criminal forfeiture. In addition, it consented to a $2.8 billion civil settlement.
Separately, the Sacklers who own Purdue agreed to a $225
million civil settlement with the Justice Department to resolve allegations of marketing and financial misconduct on their part. Despite that deal, the Sacklers did not admit any wrongdoing.
All of those payments are supposed to go toward efforts to tackle a still-rampant opioid crisis. About 47,000 died from opioid-involved overdoses in the U.S. in 2018, according to the Centers for Disease Control and Prevention.
But the lack of criminal charges against any individuals incensed Tong and a number of his counterparts.
“Members of the Sackler family and Purdue executives and managers and employees who are responsible should be personally held liable,” Tong said in an interview.
Responding to an inquiry from Hearst Connecticut Media about why no Purdue-connected individuals had been criminally charged, a spokeswoman for the Justice Department referred to its Oct. 21 press conference announcing the settlement.
In the press conference, Justice Department officials confirmed that the settlement terms do not “release” or shield the Sacklers or anyone else connected to the company from possible criminal prosecution.
“The resolution we’ve reached ... is neither predictive of or preclusive of other or future or different resolutions that weren’t
covered by today,” Deputy Attorney General Jeffrey Rosen said in response to a reporter’s question about why none of the Sacklers had been charged.
Disgruntlement about the new deal parallels the criticism of previous prosecution of the firm. In 2007, Purdue, as a company, and three former and then-executives pleaded guilty to charges of OxyContin misbranding. In total, they incurred about $635 million in penalties. Those executives did not serve any prison time.
“Purdue has now admitted to felonies twice — once in 2007 and now again in 2020,” Massachusetts Attorney General Maura Healey said in an email. “The Department of Justice’s settlement fails to hold accountable the individuals who directed and implemented those crimes.”
Some experts, however, said that state attorneys general should not assume that the Justice Department would not eventually charge individuals.
“The reason you would not do it (criminal prosecution of the company and individuals) together is because you want to keep leverage,” said Carl Bornstein, a former state and federal prosecutor now in private practice who is also an adjunct assistant professor at the John Jay College of Criminal Justice. Individuals’ “continuing cooperation in their promise of what they’re going to do under the terms of the Purdue settlement agreement gives the
government leverage in the later (potential) charging of individuals in criminal cases and the eventual sentences in those cases.”
Connecticut’s attorney general does not have the power to criminally prosecute cases, although some state attorneys general do have that authority.
“The bottom line though is that only the Department of Justice has the full panoply of tools under federal law to charge them,” Tong said.
In recent years, pharmaceutical executives seldom have been sent to prison for corporate malfeasance. In an outlier case, the founder of Insys Therapeutics, John Kapoor, was sentenced in January to 66 months in prison in connection with a scheme to bribe practitioners to prescribe Subsys, a fentanyl-based pain medication. Kapoor has appealed his conviction.
Settlement amount
State attorneys general including Tong are also unhappy because they said Purdue’s owners had negotiated a relatively small payout in their settlement.
The Sacklers’ family net worth has been estimated at $13 billion, according to Forbes. Tong and many of his counterparts have accused the company of siphoning billions of dollars out of the company in recent years. Representatives for the Sacklers said they have never made fraudulent financial transfers.
Justice Department officials disputed assertions that they had been too forgiving with the family.
“There is no law that says if you’ve done something wrong we should just simply strip somebody of all their assets in existence. That’s not how it works. It has to be that we are looking at specific acts of wrongdoing, civilly or criminally, and then having a proportionate response,” Rosen said at last week’s press conference. “In terms of what they (the Sacklers), quote, got to keep, they lost control and ownership of a company that was worth very significant amounts of money. They will have no future involvement with that company if the bankruptcy court approves this resolution.”
While the Justice Department’s settlement terms require the transformation of Purdue into a “public-benefit company” and the Sacklers to relinquish control of the firm, Purdue and the Sacklers have proposed the same scenario since the company filed for bankruptcy in September 2019.
Connecticut and 23 other “nonconsenting” states have not agreed to settle their civil lawsuits against Purdue. The company is trying to resolve those complaints and thousands of others through a comprehensive settlement negotiated in federal bankruptcy court.