I’m a big believer in the civil justice system. I’ve spent my entire career working in it. I’ve used it to help thousands of clients and hold lots of bad actors accountable for their actions. But sometimes people just gotta go to jail.
I say that because for the second time in a decade, unfettered corporate greed is devastating American families and communities. Ten years ago, the carnage was caused by bankers and speculators who created risky, ultimately worthless mortgage-backed securities and engaged in predatory lending. Their misdeeds led to the collapse of the U.S. housing market and the near meltdown of the global economy. Nearly 10 million families lost their homes, millions more lost billions in equity and were left broke and hopeless. Many victims are still struggling to rebuild their lives.
As the housing crisis began to ebb, signs of the next profit-driven catastrophe to beset the nation began to emerge. It was touched off when members of the Sackler family, owners of Purdue Pharma decided to use any means necessary to vastly increase sales of Oxycontin, the company’s highly addictive opioid painkiller. Within a few years, the scourge of opioid addiction was sweeping across the country. And while the housing crisis and the opioid/heroin epidemic were both spawned by corporate greed, there’s one significant difference: the victims of the drug epidemic aren’t attempting to rebuild their lives. They’re dead.
At first glance, you may fail to see the similarities that exist between the bankers who robbed millions of Americans of their life savings and the drug company executives who have, to date, robbed 400,000 people of their lives. But the parallels are stark and disturbing. Like the financiers who invented credit default swaps and collateralized debt obligations, the Sacklers set out to create a market for a faulty product, paid once-responsible people lots of money to foist it off on unsuspecting customers, then sat back and blithely watched as billions of dollars in revenue flowed in and chaos ensued.
The similarities don’t end there. Both schemes were aided and abetted by industry watchdogs. In the case of the financial crisis, Standard and Poor’s and Moody’s continued to rate mortgage-backed bonds “Triple A” even though they were filled with junk. Banks and mortgage companies then paid brokers huge fees to peddle the junk and bribed appraisers to inflate the value of homes that were bundled into the securities.
Purdue funded self-serving scientific studies that produced fudged data about the long-term use of opioids, distributed that data to thousands of physicians, pharmacists, and nurses during conferences held at luxury resorts, more than doubled its sales force, and paid reps who produced increased OxyContin sales $40 million in bonuses.
Regulators were also complicit in both crises. Just as the SEC and other financial cops ignored what was happening in the mortgage market, the agencies charged with supervising the drug industry were asleep at the switch.
Despite rules requiring drug distributors and pharmacists to report unusual orders of controlled substances to the government, billions of pills continued to flood markets across the U.S. for years. Between 2007 and 2012 pharmaceutical companies sold 780,000,000 hydrocodone and oxycodone pills in West Virginia. That’s 433 pills for every man, woman, and child in the state. No one said a word until the bodies began to pile up. When regulators did finally act by cracking down on doctors who were over-prescribing pain meds, many addicted patients were forced to turn to heroin dealers
Now I’ve reached the point in the story where I hope against hope the similarities will end. In the aftermath of the 2008 housing meltdown, many of the largest banks paid billions in fines and penalties using bailout money supplied by the very taxpayers who had been defrauded and funds that should have been distributed to shareholders. But not one senior banking executive was indicted, convicted, or jailed. Instead, the feds spent billions to bail out the finance industry and offered only slight assistance to the millions of Americans who lost their homes and their dreams.
Not surprisingly, homeowners were stunned and outraged when they learned that the billionaires who had stolen their houses were allowed to walk — or Lear Jet or yacht — away scot free. That should not have been the way the mortgage crisis ended. Some people, lots of people should have gone to jail.
Today, the Justice Department and state attorneys general are taking the same tack with Purdue that they did with banks. They’re bringing civil actions and attempting to claw back some of the billions the Sackler family made by merchandising death.
But that’s simply not good enough. If the Sacklers were street-corner drug pushers rather than billionaires they would be facing life in prison or worse. Taking some of their money won’t deter bad behavior and it’s certainly not just punishment for the havoc they have wreaked in communities across this country. Marc Dann