In 2016, a small-time drug dealer in Leesburg, Va., named Darnell Washington sold a customer a batch of what he thought was heroin. It turned out to be fentanyl. The customer shared it with a friend, and the friend died from an overdose.
To combat the opioid crisis, prosecutors have begun treating overdose deaths not as accidents but as crimes, using tough statutes to charge the dealers who sold the drugs. Washington had never met the person who overdosed. But, facing a mandatory minimum prison sentence of 20 years for “distribution resulting in death,” he pleaded guilty to the lesser charge of distribution and is now serving a 15-year sentence in federal prison.
I thought about this the other day when it became clear that members of the billionaire Sackler family will most likely soon receive a sweeping grant of immunity from all litigation relating to their role in helping to precipitate the opioid crisis. Through their control of Purdue Pharma, the families of Raymond and Mortimer Sackler made a vast fortune selling OxyContin, a powerful prescription opioid painkiller that, like fentanyl, is a chemical cousin of heroin.
Though they are widely reviled for profiting from a public health crisis that has resulted in the death of half a million Americans, they have used their money and influence to play our system like a harp. It is hardly news that our society treats people like Darnell Washington with sledgehammer vengeance, and people like the Sacklers with velvet gloves.
But it’s worth asking: How did they pull this off?
For a long time, the families of Raymond and Mortimer Sackler simply evaded scrutiny, pruning their public image so that people knew about the philanthropic contributions like the Sackler Library at Oxford, but not about the source of their wealth. After the press started writing stories, in 2001, about how OxyContin had given rise to a wave of addiction, high-price spin doctors labored to keep the Sackler name out of the controversy.
As the death toll associated with OxyContin grew, Purdue continued to argue in its marketing campaign that the drug was rarely addictive. When journalists raised tough questions, the company sent its lawyers to intervene with their editors.
This “can I see your manager” approach works even with law enforcement. In 2006, federal prosecutors in Virginia were preparing to charge Purdue with felonies. They focused on three senior lieutenants who worked for the company, expecting them to flip on the Sacklers — the ultimate target, according to the lead prosecutor — when faced with potential prison time. But Purdue had enlisted two former U.S. attorneys, Rudy Giuliani and Mary Jo White. Ms. White telephoned Paul McNulty, who was then the deputy attorney general: “It’s Mary Jo White,” Mr. McNulty recalled recently. “It’s somebody who thought of herself as having access.”
The Justice Department informed the federal prosecutors in Virginia that they could not charge the executives with felonies, robbing them of their most significant point of leverage: the threat of jail. The executives did not cooperate with efforts to implicate the Sacklers; instead, they pleaded guilty to misdemeanors while maintaining that they had done nothing wrong. The company pleaded guilty to felony “misbranding” and paid a $600 million fine.
You would not be alone in detecting a whiff of La Cosa Nostra. In an expert report filed in a recent lawsuit, John C. Coffee Jr., who directs the Center on Corporate Governance at Columbia Law School, concluded that “there is little to distinguish the control the Sacklers exercised over Purdue from the control that the Godfather held over his Mafia family.” After the executives took the fall, the Sacklers voted to pay one of them $3 million. Another got $5 million. Impunity will cost you. According to court documents, a single law firm billed Purdue more than $50 million for the case.
Yet the Sacklers were unchastened. Last year, Purdue pleaded guilty to a new set of felony charges related to the marketing of OxyContin. Once again, none of the Sacklers were charged criminally; instead, they agreed to pay a relatively meager $225 million to settle a civil investigation, without any admission of wrongdoing. Astonishingly, prosecutors appear to have settled with the Sacklers without ever bothering to interview them. Asked in a deposition whether any of the Sacklers had “direct contact with the D.O.J. in connection with the investigation,” David Sackler, who served on Purdue’s board from 2012 to August 2018, replied, “I do not believe that any of them have.”
This time, no individual executives were charged even with misdemeanors. Instead, the Justice Department informed the prosecutors on the case that they wanted to deal with Purdue quickly. In October, administration officials announced that Purdue had reached an $8 billion settlement with the government. This sounded impressive — except that the company didn’t have $8 billion, because by then it had filed for bankruptcy.
How could a corporation with a product that has generated an estimated $35 billion in revenue end up filing for bankruptcy? One answer is that by the time Purdue filed for Chapter 11, in 2019, it was being sued by practically every state in the country and thousands of other claimants. But there is another, more relevant explanation.
By 2007, the Sacklers seems to have realized, as David Sackler noted, that eventually one lawsuit might “get through to the family.” They started pulling money out of Purdue and securing it in their own accounts, many of them overseas. According to an audit report, between 2008 and 2017 they took out over $10 billion. (Family members have said the transfers were proper.) Then, in 2019, with Purdue engulfed by lawsuits, the company sought protection in bankruptcy court.
It is difficult to overstate the fiendish brilliance of this move. Now, the company would be shielded from all those lawsuits while restructuring its debts. Of course, at this point some of the lawsuits had indeed broken through: More than two dozen states had filed suit against individual Sackler board members. But the Sacklers and Purdue now requested that the bankruptcy judge freeze any lawsuits against family members — even though the family had not declared bankruptcy.
American corporations can pick the jurisdiction where they file for bankruptcy and, thus, often the judge who determines their fate. Even though Purdue has never had any real business presence in White Plains, N.Y., that is where it filed its bankruptcy case. Purdue has maintained that this choice was driven by proximity to the company’s headquarters in Stamford, Conn. But it may also have been relevant that only one federal bankruptcy judge presides in White Plains — Robert Drain. In the past, Judge Drain had indicated a willingness to shield from litigation certain parties who had not even filed for bankruptcy in his court. He promptly granted the request, temporarily protecting the Sacklers from those suits.
Judge Drain is known for prizing deal making and efficiency and has tried to seal off the proceedings from the messy imperatives of justice and accountability. As an army of lawyers haggled over the carcass of Purdue, the Sacklers advocated a “global resolution,” a single, sweeping deal that would address all of the claims against the company and the family. Their offer: $4.5 billion, with no admission of wrongdoing by the family and permanent immunity from any future civil liability related to the opioid crisis.
That may seem like a lot of money, but billionaire math can be deceptive. The Sacklers proposed to pay the $4.5 billion out over nine years. Their current fortune is estimated to be at least $11 billion. Conservatively, with interest and investments, this means they can expect a 5 percent annualized rate of return on that fortune. If that’s the case, they’ll be able to pay the fine without even touching their principal. When they’re done paying in 2030, they will probably be richer than they are today.
For months, a coalition of “nonconsenting” states held out for a better deal. But Judge Drain indicated that he was inclined to permanently enjoin the states from pursuing their cases against the Sacklers. This would be essential, the judge observed, to achieve “true peace.”
On July 7, with their leverage diminishing, 15 of the nonconsenting states indicated that they would sign off on the Sacklers’ proposed deal. At a news conference, New York’s attorney general, Letitia James, said, “The battle is not over.” But clearly, it is. The company will be wound down. The Sacklers will be barred from the opioid business. They will admit no wrongdoing. They — along with their scores of lawyers, consultants and public relations advisers — will be granted permanent immunity. (In principle, they could still be criminally prosecuted, but this seems unlikely; through their representatives, members of the family have maintained that they acted “ethically and legally.”)
There is one small consolation. As part of the settlement, the Sacklers have agreed to release millions of company documents, including loads of privileged Purdue communications. This corpus of information will one day be available to the public. It will be a different sort of Sackler library: an archive that will deliver a comprehensive truth about the origins of the opioid crisis, even in the absence of accountability, and an indelible record of the family’s infamy. More important, the archive will offer a forensic accounting of the ways in which money and influence can insulate the very wealthy from the downstream consequences of their own reckless decisions.
We can learn from that story — and we must.
Patrick Radden Keefe is a staff writer at The New Yorker and the author of “Empire of Pain: The Secret History of the Sackler Dynasty.”
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