Trump's Higher Impunity Revisited

Introduction - the New York Times Notes Trump's History of Impunity

In today's New York Times, and article entitled "New Trump Charges Highlight Long-Running Questions About Obstruction" touched on former President Donald Trump's long history

of gamesmanship on his part with prosecutors, regulators and others who have the ability to impose penalties on his conduct.

in the context of the recent charges of obstruction of justice after the Department of Justice found he had absconded to Mar-a-Lago with multiple confidential government documents, then tried to cover this up.  

The article further stated that "over many decades" Trump

 engaged in gamesmanship with prosecutors, regulators and officials who had authority in aspects of the industries in which he operated. He lived in a New York City where corruption touched aspects of the political and government establishments and the real-estate construction businesses, and he came to believe that everything could be worked out through some kind of deal

However, it provided no detail about how he had maintained his impunity over his long career prior to winning the presidency in 2016.

Yet, by early in that presidency, there was substantial documentation of this impunity.  In fact, in 2018, our post "A Higher Impunity - How Can we Reduce Health Care Leadership's Impunity When the President Claims His Own Impunity? summarized the best documented cases.  So to supplement the NYT article, I have re-upped the relevant content of that post below.

Examples of Donald Trump and Family's Apparent Impunity Before He Became President

As a wealthy businessman, Donald Trump and his family were often linked to apparently illegal activities, but seemed to avoid any intensive investigation, much less negative consequences.

A 2016 Politico article cataloged Trump's ties to organized crime, and found "Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t." Also,

Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.

We have found numerous examples, which are below listed chronologically according to the time of occurrence of relevant events.

Trump Accused of Lying to Federal Investigators about his Mafia Connections in the 1980s

A WNYC piece from October, 2016, was based on an interview with a federal prosecutor who had investigated organized crime in the 1980s,

Attorney Kenneth McCallion was one of the federal prosecutors involved in that investigation. He says there appeared to be a sweetheart deal between the Teamsters Local 282 and Trump, where Trump would get a promise of cooperation from organized labor—including breaking up any strikes by minority workers—in exchange for no-show jobs, a lucrative concrete contract and a luxury apartment for the union president's girlfriend.

'After we indicted them, the Teamster leaders called a citywide strike, but there were two job sites they exempted from that. One was Trump Tower and the other was Trump Plaza,' McCallion said.

Yet despite this, Trump was never prosecuted.

'Even though Donald Trump lied to law enforcement about his relationship and lying to federal agents is a federal crime, he basically got a pass at that point,' he said.

Trump Accused in Legal Papers of Accepting Kickbacks, but the Charges were not Investigated

The 2016 Politico article also noted:

[An associate of a convicted racketeer] in court papers accused Trump of taking kickbacks from contractors, asserting this could 'be the basis of a criminal proceeding requiring an attorney general’s investigation' into Trump. Trump then quickly settled, paying the woman a half-million dollars.

No further investigation ensued.

After a Judge Found that he Conspired to Violate Fiduciary Duty and Committed Fraud, Trump was able to Settle with Details Sealed

Again in Politico,

In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the 'breach involved fraud and the Trump defendants knowingly participated in his breach.' The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.

It is not clear that Trump was personally responsible for paying whatever the settlement entailed.  No criminal charges apparently followed.  

Applying for a Casino License, Trump Failed to Disclose he was Under Grand Jury Investigation, but Later Kept his License

As also reported by Politico, when Trump was trying to obtain a license for a New Jersey gambling casino,

Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.

But it didn't. And despite the fact that

Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.

Trump's Casino Company Paid Multiple Fines for Violating Regulations, but Trump was not Personally Sanctioned 

An Atlantic article from January, 2017, stated,

Trump has been repeatedly fined for breaking rules related to his operation of casinos. In 1990, with Trump Taj Mahal in trouble, Trump’s father Fred strolled in and bought 700 chips worth a total of $3.5 million. The purchase helped the casino pay debt that was due, but because Fred Trump had no plans to gamble, the New Jersey gaming commission ruled that it was a loan that violated operating rules. Trump paid a $30,000 fine; in the end, the loan didn’t prevent a bankruptcy the following year. As noted above, New Jersey also fined Trump $200,000 for arranging to keep black employees away from mafioso Robert LiButti’s gambling table. In 1991, the Casino Control Commission fined Trump’s company another $450,000 for buying LiButti nine luxury cars. And in 2000, Trump was fined $250,000 for breaking New York state law in lobbying to prevent an Indian casino from opening in the Catskills, for fear it would compete against his Atlantic City casinos.

Also, while Trump was attempting a hostile take-over of a rival casino,

the Federal Trade Commission fined him $750,000 for failing to disclose his purchases of stock in the two companies, which exceeded minimum disclosure levels.

Trump and Family were Accused of Self-Dealing and Accepting Illegal Donations while Operating the Trump Foundation, but were not Individually Penalized

Also reported by the Atlantic,

The [Trump] foundation appears to have broken IRS rules on 'self-dealing” by paying to resolve the legal disputes as well as buying a portrait of Trump and a Tim Tebow helmet that went back to the Trump family. In November, in tax filings posted online, the Trump Foundation said it had violated self-dealing rules in 2015 and in previous, indeterminate, years. On the donation, Trump and Bondi both say there was no quid-pro-quo, but the donation was an illegal one for a charitable nonprofit, and the foundation had to pay a $2,500 fine. Liberal watchdog group Citizens for Responsibility and Ethics in Washington charges other laws may have been broken as well. New York Attorney General Eric Schneiderman has reportedly launched an investigation into the foundation. Schneiderman has also informed the foundation that it is in violation of rules on fundraising and ordered it to quit. Trump has announced plans to shutter his foundation, but reportedly cannot do so while it is under investigation.

Yet so far no person has been charged with any related violations. Note that it appears that Trump may have had leverage on Mr Schneiderman, who has now resigned (see below).  Although there were reports in 2017 that the Foundation was going to shut down, as of March, 2018, according to an article in The Hill, the ranking Democratic member of the House Oversight and Government Reform Committee was still trying to get records related to the self-dealing described above from the leadership of the apparently still existing foundation (look here). 

Trump's Taj Mahal Casino Was Fined for Breaking Rules about Money Laundering, but Trump Paid no Penalties

A May, 2017, CNN story stated,

The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.

It's a bit of forgotten history that's buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump's ties to Russia have obtained access to, CNN has learned.

The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.

Trump's casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.

There is no record suggesting anyone looked into Trump's involvement with these violations. Note that

The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.

However,

But key details of the casino's cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions.

Then, in 2015, FINCEN publicly announced:

The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.

Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.

'Trump Taj Mahal received many warnings about its deficiencies,' said FinCEN Director Jennifer Shasky Calvery. 'Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed.'

Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.

Again, there is no record of any negative consequences for Mr Trump

Trump Made False Statements Under Oath, but was not Charged with Perjury

A Mother Jones article published February, 2016, recounted that in connection with a libel suit Mr Trump filed against journalist Timothy O'Brien alleging O'Brien under-reported Mr Trump's wealth,

In 2007—two years before a New Jersey judge tossed out the case—Trump was questioned during a deposition. Over the course of the two-day-long interrogation, Trump was forced repeatedly to acknowledge having made false statements. And at one point, a lawyer for O’Brien and his publisher asked Trump a straightforward question: Have you ever before associated with individuals you knew were associated with organized crime?'

Trump, who was testifying under oath, answered, 'Not that I know of.'

That was a clear and unequivocal response. But it was not true. Two years earlier, O’Brien had interviewed Trump and specifically asked him about Sullivan and Shapiro. O’Brien, now an editor and writer at Bloomberg, has provided Mother Jones with a transcript of the interview, and it conclusively shows that Trump believed that these two men were associated with organized crime....

Trump: They were tough guys. In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa. I don’t know if you ever heard that.

O’Brien: I have heard that. And that he was, you know…

Also,

Trump: I just was able to handle them. And I, really, I was able to handle them. I found Sullivan to be the tougher of the two. I started hearing reports about Sullivan, that he killed Jimmy Hoffa….

Also,

O’Brien: What was Shapiro like?

Trump: He was like a third-rate, local, real estate mob guy. Nothing spectacular. And I, you know, I got lucky. I heard a rumor that Sullivan, because Sullivan was a great con man, I heard a rumor that Sullivan killed Jimmy Hoffa. And because I heard that rumor I kept my guard up. You know, I said, 'Hey, I don’t want to be friends with this guy.'

So here was Trump connecting Sullivan to the Hoffa murder and calling Shapiro a 'mob guy.'

The same article also asserted that Trump lied in a deposition about knowing and working with Felix Sater, who who "had once been involved in a Mafia-linked stock swindle," and who "had worked with the Trump Organization."

Ivanka Trump and Donald Trump Jr Escaped Indictment for Fraud

As reported by the New Yorker in October, 2017, despite considerable evidence that the two children of Donald Trump had misled potential buyers of Trump SoHo condominiums, Cyrus Vance, the Manhattan District Attorney overruled his staff by halting an investigation of them in 2010.  Later, the Trumps' attorney, Marc Kasowitz, made a large donation to Mr Vance's campaign.   

Trump University Settled Fraud Allegations, Trump Not Charged

As reported by the New York Times in 2017, "the final settlement of allegations that 'Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn" was approved by a judge. Litigation about these allegations had gone on for years, but after his election in November, Mr. Trump reversed course and agreed to pay $25 million to resolve the litigation. He did not admit fault, and he maintained in posts on Twitter after the settlement announcement that he "did not have the time to go through a long but winning trial on Trump U."

The settlement resolved lawsuits brought by the Attorney General of New York, Eric Schneiderman, among others.  However, Mr Trump was never charged with a crime by Mr Schneiderman among others.  There is some reason to think Mr Trump took actions to ensure his impunity.

According to Bloomberg on May 11, 2018,

Back in 2013, Donald Trump was exploring a presidential run. His Trump University was in the crosshairs of New York’s crusading attorney general. Around the same time, Trump and his personal lawyer got an interesting piece of information: Eric Schneiderman, the AG, was accused of sexually abusing two women.

The details of the accusations were not made public at that time, but later,

Trump took aim at Schneiderman in a tweet on Sept. 11, 2013, that also referred to New York politicians who’d resigned over allegations of sexual misconduct, Anthony Weiner and Eliot Spitzer.

'Weiner is gone, Spitzer is gone -- next will be lightweight A.G. Eric Schneiderman. Is he a crook? Wait and see, worse than Spitzer or Weiner,' Trump tweeted.

Mr Schneiderman never brought criminal charges against Mr Trump.  Could it be that he was made aware that Trump had information about Schneiderman's sexual behavior that he could use against him? This month, the allegations of his sexual misconduct were finally made public and he then resigned.  The settlement, again absent any charges against Mr Trump, was approved in March, 2017.

Summary of Trump's Pre-Presidency Impunity

While Trump's firms have had to pay multiple fines for breaking rules and laws, and Trump and the immediate family members who work with him in the Trump Organization were credibly accused of multiple types of wrong-doing, including various apparent crimes, neither Trump nor his family members were ever indicted, or apparently investigated for crimes.

Summary

We concluded our 2018 post by summarizing how Trump's record of impunity made it much more difficult to push to address health care corruption and related issues.  But since 2018, we have become more aware of the multitudinous effects that Trump's corruption has degraded our society and representative democracy.  Lately, some have suggested that Trump would drag us into authoritarianism if not fascism simply to keep his sorry self out of jail.  See, for example,  Netanyahu and Trump: two desperate men exploiting power to save themselves.

 There were examples going back decades showing how Trump eluded accountability and justice by manipulating the system.  They were reported at the times they occurred, recalled by journalists before and soon after Trump's 2016 election victory, and largely ignored.

Maybe if we as a society had been paying better attention, we would all be in a better place today. 

Haunted by the Impunity of Rich Business Leaders - Will One Criminal Conviction make a Difference? The Trump Organization Chief Financial Officer Pleads Guilty

 Impunity: an Introduction

We believe that unaccountable leadership is a major cause of health care dysfunction.  Impunity is an extreme form of unaccountable leadership.

We have noted that despite numerous legal settlements made by health care organizations of allegations like fraud, bribery, and kickbacks, almost never do top leaders who presided over these actions face any negative consequences.  Lack of deterrence caused by such impunity appears to be a major cause of  the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations. How executives got to the point of having such impunity has never been clear.

But consider two important cases.  

Columbia/HCA CEO Not Held Responsible for Defrauding the Federal Government in 2003

 In 2010, we described the case of early dominant for-profit hospital system Columbia/HCA, which, after investigations beginning in the late 1990s, settled charges of defrauding the federal government.  The company paid a fine of $1.7 billion, a record amount at that time, but did not admit guilt.  More importantly, the company CEO, Rick Scott, was not charged with anything, suffered no negative consequences even though it was on his watch that the company was involved in apparently fraudulent behavior, and retired with a large golden parachute.  

Mr Scott then went on to be elected Governor of, then Senator from Florida as a Republican.  He is still in the Senate, and has become a big supporter for former President Trump.

In 2010 we wrote:

we have noted a parade of legal settlements involving and guilty pleas and criminal convictions by  health care organizations, (or often just subsidiaries conveniently available to take the rap).  As we have noted, resulting fines may be just be treated as costs of doing business by health care leaders.  Almost never have the people who authorized, directed, or implemented wrong-doing almost never suffer negative consequences.

Instead, they may just continue to haunt health care and society at large

.

and

as I have repeated seemingly infinitum, we will not deter unethical behavior by health care organizations until the people who authorize, direct or implement bad behavior fear some meaningfully negative consequences. Real health care reform needs to make health care leaders accountable, and especially accountable for the bad behavior that helped make them rich.

Purdue Pharma Executives Convicted in 2007

In 2007, we made quite a lot about criminal convictions for Purdue Pharma, and of three of its executives for the "misbranding" of Oxycontin.  (That was just the beginning of the legal problems for Purdue, and other manufacturers and distributors of "legal" narcotics and their contribution to the epidemic of narcotic abuse.)  At the time, we marveled that

At least in the Purdue Pharma/ Oxycontin case top company leaders were prosecuted, plead guilty, and will personally have to pay substantial financial penalties. Maybe this will convince the leaders of health care organizations that deceptive marketing practices may not be in their long term interests.

Of course, at the time we did not realize that Purdue Pharma was a privately held corporation run largely by the family that owned it, the Sacklers.  While the three executives had some responsibility for company operations, they were not as powerful as the top executives of publicly held health care companies, and so their convictions did not really end the impunity even of the top leaders of even one important health care corporation.

Trump Organization CFO to Plead Guilty of 15 Felonies Involving Tax Cheating in New York Court

Today, as the New York Times reported:

 One of Donald J. Trump’s most trusted executives stood before a judge on Thursday and pleaded guilty to 15 felonies, admitting that he conspired with Mr. Trump’s company to carry out a scheme to avoid paying taxes on lavish perks — even while refusing to implicate the former president himself.

As part of the plea deal with the Manhattan district attorney’s office, the executive, Allen H. Weisselberg, is required to testify at the company’s trial if prosecutors choose to call on him, and to admit his role in conspiring with Mr. Trump’s company to carry out the tax scheme. That testimony could tilt the scales against the company, the Trump Organization, as it prepares for an October trial related to the same accusations. 

This demonstrates that in 2022, it is still big news if an apparently top corporate executive is convicted of a crime involving his management of the corporation.  We have progressed so little.

In particular, we certainly have not yet progressed to the point at which the actual top leaders of big corporations are held accountable for their misbehavior.  The Trump Organization is a closely held private corporation.  Its top leader is generally acknowledged as Donald J Trump, and its other top leaders are likely his children.  None of them so far have been charged in this case.

Donald J Trump as leader of the Trump Organization had a very long record of impunity as leader of the Trump Organization (look here).  It is possible that had he been held to account for his earlier actions, we might never have run for President of the United States.  Trump as President was accused of a long list of conflicts of interest and corrupt acts (look here).  He has denounced the 2020 election, which he lost, as "rigged" despite no evidence in support of that.  He currently is under investigation for leading an insurrection to overturn the election and stage an auto-coup.

Conclusion

We are still haunted, now dangerously haunted, for our failures as a society to hold rich, top business leaders accountable for their actions.

When will we ever learn? Will be learn before it is too late?

 

Cybernetic Opioid Pushers: EHR vendor Practice Fusion to Pay $145 Million to Resolve Criminal and Civil Investigations

Considering the devastating and deadly opioid problems in this country, this news release from DOJ describes particularly despicable behavior from an EHR vendor and pharmas.

These problems are likely more widespread, but this EHR company got caught.

The company admitted that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications, via "decision support" routines specifically designed by the drug company to increase drug company profits.

The DOJ reports that in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS (clinical decision support) alerts in ways aimed at increasing sales of the companies’ products.  Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself.  The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards.

This story could certainly help explain why I could never get involved in EHR initiatives in pharma, despite having been at Merck in a science-support capacity, but seeking EHR involvement.  I had completed a Yale Medical Informatics postdoc and then faculty period authoring EHRs domestically and for a foreign country, and then had a period as a CMIO in Delaware. Yet, my many pharma applications over many years afterwards for EHR-related positions were mostly ignored.

The reason behind that shutout could likely be that I was known as being exceptionally honest, if only in part for my candid writing on EHR problems first on AOL 1999-2004, then at Drexel University and at this blog, at a time when the pundits and hyper-enthusiasts were pushing the technology uncritically and relentlessly.

Indeed, I would never have tolerated the types of conspiracy (DOJ's word) between EHR companies and pharma that are described in this DOJ release to help push drugs, any drugs - let alone opioids.

To make matters worse, this vendor is also described as cheating on the HHS EHR "certification" process.  The company is described as concealing from the certifying entity, known as an ONC-Authorized Certification Body (ATCB), that the EHR software did not comply with all of the applicable requirements for certification.

Apparently, no defendants were jailed.

I am posting the DOJ release in its entirety.  It is quite comprehensive, and I have nothing to add.

https://www.justice.gov/opa/pr/electronic-health-records-vendor-pay-145-million-resolve-criminal-and-civil-investigations-0

Department of Justice

Office of Public Affairs

---

FOR IMMEDIATE RELEASE

Monday, January 27, 2020

Electronic Health Records Vendor to Pay $145 Million to Resolve Criminal and Civil Investigations

Practice Fusion Inc. Admits to Kickback Scheme Aimed at Increasing Opioid Prescriptions

Practice Fusion Inc. (Practice Fusion), a San Francisco-based health information technology developer, will pay $145 million to resolve criminal and civil investigations relating to its electronic health records (EHR) software, the Department of Justice announced today.

As part of the criminal resolution, Practice Fusion admits that it solicited and received kickbacks from a major opioid company in exchange for utilizing its EHR software to influence physician prescribing of opioid pain medications.  Practice Fusion has executed a deferred prosecution agreement and agreed to pay over $26 million in criminal fines and forfeiture.  In separate civil settlements, Practice Fusion has agreed to pay a total of approximately $118.6 million to the federal government and states to resolve allegations that it accepted kickbacks from the opioid company and other pharmaceutical companies and also caused its users to submit false claims for federal incentive payments by misrepresenting the capabilities of its EHR software.

“Across the country, physicians rely on electronic health records software to provide vital patient data and unbiased medical information during critical encounters with patients,” said Principal Deputy Assistant Attorney General Ethan Davis of the Department of Justice’s Civil Division.  “Kickbacks from drug companies to software vendors that are designed to improperly influence the physician-patient relationship are unacceptable.  When a software vendor claims to be providing unbiased medical information – especially information relating to the prescription of opioids – we expect honesty and candor to the physicians making treatment decisions based on that information.”
The resolution announced today addresses allegations that Practice Fusion extracted unlawful kickbacks from pharmaceutical companies in exchange for implementing clinical decision support (CDS) alerts in its EHR software designed to increase prescriptions for their drug products. 

Specifically, in exchange for “sponsorship” payments from pharmaceutical companies, Practice Fusion allowed the companies to influence the development and implementation of the CDS alerts in ways aimed at increasing sales of the companies’ products.  Practice Fusion allegedly permitted pharmaceutical companies to participate in designing the CDS alert, including selecting the guidelines used to develop the alerts, setting the criteria that would determine when a healthcare provider received an alert, and in some cases, even drafting the language used in the alert itself.  The CDS alerts that Practice Fusion agreed to implement did not always reflect accepted medical standards.  In discussions with pharmaceutical companies, Practice Fusion touted the anticipated financial benefit to the pharmaceutical companies from increased sales of pharmaceutical products that would result from the CDS alerts.  Between 2014 and 2019, health care providers using Practice Fusion’s EHR software wrote numerous prescriptions after receiving CDS alerts that pharmaceutical companies participated in designing.

Practice Fusion executed a deferred prosecution agreement with the U.S. Attorney’s Office for the District of Vermont based on its solicitation and receipt of kickbacks from a major opioid company to arrange for an increase in prescriptions of extended release opioids by healthcare providers who used Practice Fusion’s EHR software.  As detailed in the criminal Information made public today, Practice Fusion solicited a payment of nearly $1 million from the opioid company to create a CDS alert that would cause doctors to prescribe more extended release opioids.  That payment was financed by the opioid company’s marketing department, and the CDS was designed with input from the marketing department.  Practice Fusion and the opioid company entered the CDS sponsorship because they believed that the CDS would influence doctors’ prescriptions of extended release opioids.  In marketing the “pain” CDS alert, Practice Fusion touted that it would result in a favorable return on investment for the opioid company based on doctors prescribing more opioids.

“Practice Fusion’s conduct is abhorrent.  During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids,” said Christina E. Nolan, U.S. Attorney for the District of Vermont.  “The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts.  This recovery is commensurate to the nature of Practice Fusion’s misconduct, represents the largest criminal fine in the history of this District, and requires Practice Fusion to admit to its wrongs.  It is another example of pioneering healthcare fraud enforcement by the talented Assistant U.S. Attorneys and staff of this U.S. Attorney’s Office, working with their partners in law enforcement.  We cannot — and will not — tolerate technology companies influencing patient treatment merely because a pharmaceutical company provided a kickback.”

The criminal Information charges Practice Fusion with two felony counts for violating the Anti-Kickback Statute (AKS), 42 U.S.C. § 1320a-7b(b)(1), and for conspiring with its opioid company client to violate the AKS, 18 U.S.C. § 371.  This case is the first ever criminal action against an EHR vendor and the unique Deferred Prosecution Agreement imposes stringent requirements on Practice Fusion to ensure acceptance of responsibility and transparency as to its underlying conduct, and to invest heavily in compliance overhauls and an independent oversight organization.  The Deferred Prosecution Agreement requires Practice Fusion to pay a criminal fine of $25,398,300 and forfeit criminal proceeds of nearly $1 million.  In addition, the company will cooperate in any ongoing investigations of the kickback arrangement and report any evidence of kickback violations by any other EHR vendors.  To ensure transparency and public awareness of the company’s activities while the nation continues to battle an epidemic of opioid addiction, the Deferred Prosecution Agreement requires Practice Fusion to make documents relating to its unlawful conduct available to the public through a website.  Additionally, the Deferred Prosecution Agreement mandates that Practice Fusion retain an independent oversight organization that is required to review and approve any sponsored CDS before Practice Fusion may implement the CDS, and create a comprehensive compliance program designed to ensure such abuses are not repeated.

The civil settlement with the United States resolves Practice Fusion’s civil liability arising from the submission of false claims to federal healthcare programs tainted by the kickback arrangement between Practice Fusion and the opioid company.  It also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products.  The $118.6 million settlement amount includes approximately $113.4 million to the federal government and up to $5.2 million to states that opt to participate in separate state agreements.

“Prescription decisions should be based on accurate data regarding a patient’s medical needs, untainted by corrupt schemes and illegal kickbacks,” said U. S. Attorney David L. Anderson of the Northern District of California.  “In deciding what is best for patients, electronic health records software is an important tool for care providers.  It is critically important that technology companies do not cheat when certifying that software.”

In addition to the kickback allegations, the civil settlement with the United States resolves allegations relating to two intersecting Department of Health and Human Services (HHS) programs, one at the Office of the National Coordinator for Health Information Technology (ONC) that regulates the voluntary health IT certification program, and one at the Centers for Medicare & Medicaid Services that oversees EHR incentive programs.  Specifically, the United States alleged that Practice Fusion falsely obtained ONC certification for several versions of its EHR software by concealing from its certifying entity, known as an ONC-Authorized Certification Body, that the EHR software did not comply with all of the applicable requirements for certification.  ONC’s certification criteria were designed to promote enhanced functionality, utility, and security of health information technology, and access to patient medical information across the care continuum.  HHS implemented the certification criteria for EHR software in multiple stages, known as editions.  To be certified under the 2014 Edition certification criteria, EHR software was required to allow users to electronically create a set of standardized export summaries for all patients.  When Practice Fusion sought certification of this 2014 Edition criteria, Practice Fusion falsely represented to the certifying body that its software met this data portability requirement, when several versions of its software did not.  The civil settlement resolves allegations that, at the time these versions of Practice Fusion’s software were certified, its software was unable to permit a user to create a set of standardized export summaries.  Additionally, after obtaining certification of the 2014 Edition criteria, Practice Fusion disabled access to this feature altogether.  Instead, Practice Fusion required users to contact it separately to request export of this critical patient data.

In addition to failing to satisfy the data portability requirement, Practice Fusion’s software allegedly did not incorporate standardized vocabularies as required for certification.  The United States alleged that by fraudulently obtaining certification for its products, Practice Fusion knowingly caused eligible healthcare providers who used certain versions of its 2014 Edition EHR software to falsely attest to compliance with HHS requirements necessary to receive incentive payments from Medicare during the reporting periods for 2014 through 2016 and from Medicaid during the reporting periods for 2014 through 2017.

“As new technologies continue to develop and evolve, so too do new and innovative fraud schemes,” said Shimon R. Richmond, Assistant Inspector General for Investigations of the U.S. Department of Health and Human Services. “We will continue to be vigilant in detecting and investigating these schemes in order to protect the safety of patients in federal health programs and to ensure the appropriate use of electronic health records in providing their care.”

“Today's announcement shows that Practice Fusion exploited technology to profit at the expense of a vulnerable population – patients seeking medical advice," said Timothy M. Dunham, Special Agent in Charge of the FBI's Washington Field Office, Criminal Division.  "The FBI is committed to working with our partners to bring to justice the perpetrators of healthcare fraud in all its forms, especially one that fans the flames of the already rampant opioid epidemic.”

The U.S. Attorney’s Office for the District of Vermont handled the criminal investigation and resolution.  The civil investigation was jointly handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorneys’ Offices for the District of Vermont and the Northern District of California.  The investigation was supported by the HHS Office of Inspector General and multiple HHS agencies and components.  The FBI’s field office in Washington, DC, also provided significant investigative support.

Except for the conduct admitted in connection with the criminal resolution, the civil claims resolved by the settlement are allegations only, and there has been no determination of liability as to such civil claims.

Johnson and Johnson's "Landmark" Opioid Settlement, or Just Another Chapter in the Story of Corporate Management's Impunity?

Introduction: our Chronic Narcotics Problem

Narcotic addiction has plagued human societies for hundreds of years.

[Print, 1880, opium den, London]


So as I have written before, after seeing too many dire results of narcotic addiction during my training and early career, I was dismayed how narcotics were pushed as the treatment of choice for chronic pain in the 1990s, with the predictable result that the US was once again engulfed in an epidemic of narcotic abuse.  In the last few years, the narcotics (now called "opioids") epidemic has frequently been in the headlines.  A few days ago, a judge decided that one large pharmaceutical/ biotechnology/ device company bears some blame for the problem

The Johnson and Johnson "Landmark" Settlement

On August 26, 2019, the New York Times reported a "landmark," per the headline, settlement:

A judge in Oklahoma on Monday ruled that Johnson & Johnson had intentionally played down the dangers and oversold the benefits of opioids, and ordered it to pay the state $572 million in the first trial of a drug manufacturer for the destruction wrought by prescription painkillers.

The judge wrote

that Johnson & Johnson had promulgated 'false, misleading, and dangerous marketing campaigns' that had 'caused exponentially increasing rates of addiction, overdose deaths' and babies born exposed to opioids.

It seems like a big story, big enough for another NYT article to fret over how the settlement might damage Johnson and Johnson's sterling reputation.  

For Johnson & Johnson, which has said it plans to appeal, the decision represents another blow to its reputation as the trusted brand of parents, doctors and nurses.

Wall Street Journal editorialists fretted even more,

the ruling could have far larger, and more dangerous, consequences by opening a vast new arena for product-liability suits.

And warned the opioid epidemic will not

be eased by bankrupting America's pharmaceutical companies

Maybe threats to this upstanding company inspired US President Trump, while running the most conflicted and corrupt administration ever (look here), to promote another fine Johnson and Johnson product.  On August 23, 2019, the Atlantic reported,

President Donald Trump said on Wednesday that the government will purchase 'a lot of the drug esketamine, a derivative of ketamine.

Though ketamine is known as a recreational hallucinogen, Trump asserted that a new nasal-spray derivative would be of great benefit to veterans with depression. As he left the White House for a veterans’ conference in Kentucky, he told reporters that he had instructed the Department of Veterans Affairs to make a large purchase—overriding a recent decision by the doctors who manage the hospitals’ formulary of which drugs are to be prescribed.

'There’s a product that’s made right now that just came out by Johnson & Johnson which has a tremendously positive—pretty short-term, but nevertheless positive—effect,' Trump said. But that statement is contrary to the evidence. A review by the Food and Drug Administration of what limited studies have been done with esketamine found mixed results, leaving many scientists unsure if the drug is indeed effective and safe. Just last week, the agency published a report that said the drug was not reliably better than placebo.

Should the Wall Street Journal (and perhaps President Trump) really be so worried? Was this settlement really so dire?

The March of Legal Settlements Continues

In fact, this particular settlement did not seem very harsh.  Per the first NYT article,

The amount fell far short of the $17 billion judgment that Oklahoma had sought to pay for addiction treatment, drug courts and other services it said it would need over the next 20 years to repair the damage done by the opioid epidemic.

The amount of the settlement would be unlikely in and of itself to give corporate leadership pause, given that the company's revenues exceeded $81 billion last year (look here).

While the judge found that Johnson and Johnson caused a "public nuisance," this seems unlikely to inspire much shame in corporate leaders, who took no overt responsibility for the narcotic epidemic:

In a statement about the Oklahoma case, Michael Ullmann, the general counsel and executive vice president of Johnson & Johnson, referring to the company’s pharmaceutical subsidiary, said that 'Janssen did not cause the opioid crisis in Oklahoma, and neither the facts nor the law support this outcome.'

'We recognize the opioid crisis is a tremendously complex public health issue,' he said, 'and we have deep sympathy for everyone affected.'

And like many other legal settlements which we have discussed in the past, this one caused no one at Johnson and Johnson who approved, directed, or implemented the deceptive marketing and other bad behavior to suffer any negative consequences. 

Ignoring Another Corporation's Dismal Record

Furthermore, the settlement, like most others we have discussed, ignored Johnson and Johnson's extensive track record of misbehavior.

The second NYT article did allow that the company has withstood

a series of damaging setbacks to its brand, including a spate of lawsuits over whether its talcum powder led to ovarian cancer, and high-profile cases over other potentially flawed products, like pelvic mesh and the anti-stroke drug Xarelto, which has caused excessive bleeding.

'Johnson & Johnson is a corporation under duress on a number of fronts,' said Stephen Hahn-Griffiths, an executive at Reputation Institute, which tracks public perception of companies through regular surveys.

However, that barely scratched the surface of Johnson and Johnson's record.  In a 2018 post we discussed accusations that Johnson and Johnson tried to cover up the adverse effects of its baby powder.  However, we also discussed a settlement the company made of allegations it gave kickbacks to patients to facilitate its over-pricing of Tracleer, a drug for pulmonary artery hyptertension.  These were just the latest in a long string of misadventures by the company, as we have been documenting over years.  (Our collected posts on Johnson & Johnson are here.  An updated version of their legal record from 2010 to 2016 is at the end of this post.)

Perusing the list suggests that this giant company is a poster child for bad behavior by health care organizations.  It has faced a multitude of allegations leading to settlements, and sometimes findings of guilt.  The charges included many instances of deceptive and unethical marketing, some that promoted drugs or devices for use in situations in which they may have had harms outweighing their benefit, some that involved concealing knowledge of their risks, and some of selling adulterated drugs or defective products. 


What is striking is that the company and its management have not faced more consequences for this sorry track record.

Although the company has paid multiple fines and made numerous monetary settlements over the years, none have been big enough to affect its immense revenues.  Furthermore, ultimately the monies used to pay them came from all Johnson & Johnson employees in the form of smaller paychecks; customers, patients and the public at large in the form of higher prices; and only to some extent by investors in the form of slightly lower profits.  Meanwhile, it appears that the company's top managers made an immense amount of money, possibly in part as rewards for the revenues produced by the misadeventures.

Former Johnson & Johnson CEO William Weldon, upon his retirement in 2014, was to receive a retirement package estimated to be worth from $143 to $197 million (look here).  In 2010, his total compensation was $29 million (look here).   According to the 2012 Johnson and Johnson proxy statement, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. (look here).

Current CEO Alex Gorsky received  $25 million total compensation in 2014 (look here).  More recently, the New York Times reported his 2017 total pay was $22.8 million, making him the seventh highest paid health care executive that year. 

While management made so much money, very rarely has anyone who was involved in authorizing, directing, or implementing bad behavior had to suffer any negative consequences, therefore appearing to enjoy impunity.

So what was to deter management from embarking on further misadventures, as long as the results might be enlarging their personal wealth? 

And why should we expect that this settlement will lead to any meaningful solution to the ongoing narcotics (opioid) epidemic?

Summary: Meaningless Settlements and the Impunity of Top Management

Nothing changes.  We have seen many legal settlements by health care organizations of charges of  fraud, bribery, and kickbacks.  Often such behaviors appeared to risk patient harms.  However, the companies involved usually paid tiny fines that relative to their revenues.  Rarely did they have to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

Thus it seems that US health care is rigged to benefit top insiders and their cronies, and is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, concentrating corporate power while top managers got rich. Other employees, patients, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results. 

We have called for true health care reform to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can facilitate the rise of demagogues and would be dictators.  Donald Trump cried out that only he could fix our problems and drain our swamps, but the waters are now rising (look here) while he has enjoyed his own impunity (look here).  

The "landmark" settlement by Johnson and Johnson should remind us of the reforms we have not achieved.  However, to have a chance of truly reforming health care, we need to accomplish wholesale government reform. We need to excise the deception, crime and corruption at the heart of our government and restore government by the people, of the people, and for the people. 

Appendix - A Look at Some of Johnson and Johnson's Legal Record 2010-2016

Derived from our previous blog posts - 

 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax

2011
- Guilty pleas to bribery in Europe by DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by subsidiary Scios (see post here)

2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).

2013
-  settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
-  Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
-  Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).

2014 
- DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).

2015
-  found by jury to have concealed harms of Risperdal.
-  Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)

2016
- subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post) 
 

August, 2019, Update: How to Challenge Health Care Corruption Under a Corrupt Regime?

After a lull, a new report on conflicts of interest and corruption permeating the Trump administration has appeared, prompting us to again consider how one can challenge health care corruption under a corrupt regime.


Background: Health Care Corruption

As we wrote in August, 2017, Transparency International (TI) defines corruption as

Abuse of entrusted power for private gain

In 2006, TI published a report on health care corruption, which asserted that corruption is widespread throughout the world, serious, and causes severe harm to patients and society.

the scale of corruption is vast in both rich and poor countries.

Also,

Corruption might mean the difference between life and death for those in need of urgent care. It is invariably the poor in society who are affected most by corruption because they often cannot afford bribes or private health care. But corruption in the richest parts of the world also has its costs.

The report got little attention.  Health care corruption has been nearly a taboo topic in the US, anechoic, presumably because its discussion would offend the people it makes rich and powerful. As suggested by the recent Transparency International report on corruption in the pharmaceutical industry,

However, strong control over key processes combined with huge resources and big profits to be made make the pharmaceutical industry particularly vulnerable to corruption. Pharmaceutical companies have the opportunity to use their influence and resources to exploit weak governance structures and divert policy and institutions away from public health objectives and towards their own profit maximising interests.

Presumably the leaders of other kinds of corrupt organizations can do the same. 

When health care corruption is discussed in English speaking developed countries, it is almost always in terms of a problem that affects some other places, mainly  presumably benighted less developed countries.  At best, the corruption in developed countries that gets discussed is at low levels.  In the US, frequent examples are the "pill mills"  and various cheating of government and private insurance programs by practitioners and patients.  Lately these have gotten even more attention as they are decried as a cause of the narcotics (opioids) crisis (e.g., look here).  In contrast, historically the US government has been less inclined to address the activities of the leaders of the pharmaceutical companies who have pushed legal narcotics (e.g., see this post). 

However, Health Care Renewal has stressed "grand corruption," or the corruption of health care leaders.  We have noted the continuing impunity of top health care corporate managers.  Health care corporations have allegedly used kickbacks and fraud to enhance their revenue, but at best such corporations have been able to make legal settlements that result in fines that small relative to their  multi-billion revenues without admitting guilt.  Almost never are top corporate managers subject to any negative consequences.

We have been posting about this for years at Health Care Renewal, while seeing little progress on this issue.

Health Care Corruption in the Context of a Corrupt Government

Instead, things now only seem to be getting worse, given the increasing evidence that the Trump administration is corrupt at the highest levels.   In January, 2018, we first raised the question about how health care corruption could be pursued under a corrupt regime.  We noted sources that summarized Trump's. the Trump family's, and the Trump administration's corruption..  These included a website, entitled "Tracking Trump's Conflicts of Interest" published by the Sunlight Foundation, and two articles published in the Washington Monthly in January, 2018. "Commander-in-Thief," categorized Mr Trump's conflicted and corrupt behavior.  A Year in Trump Corruption," was a catalog of the most salient cases in these categories in 2017.

In July, 2018, we addressed the Trump regime's corruption again  By then, more summaries of Trump et al corruption had appeared.   In April, 2018, New York Magazine published "501 Days in Swampland," a time-line of  starting just after the 2016 presidential election. In June, 2018, ProPublica reviewed questionable spending amounting to $16.1 million since the beginning of Trump's candidacy for president at Trump properties by the US government, and by Trump's campaign, and by state and local governments. Meanwhile, Public Citizen released a report on money spent at Trump's hospitality properties.


In October, 2018, we summarized the content of the Tracking Corruption and Conflicts of Interest in the Trump Administration from the Global Anti-Corruption Blog. The blog organized corrupt activities within the Trump administration into the following categories:

1. U.S. Government Payments to the Trump Organization

2. Use of the Power of the Presidency to Promote Trump Brands

3. U.S. Government Regulatory and Policy Decisions that Benefit Business Interests of the Trump Family and Senior Advisors

4. Private and Foreign Interests Seeking to Influence the Trump Administration Through Dealings with Trump Businesses

The voluminous 26 page report showed  that many examples of corruption by Trump et al were not one-offs, but were long-term activities.  For example, every time President Trump travels to on of the properties he owns through the Trump Organization, like the Mar-a-Lago resort in Florida, the US government is obligated to pay the Trump Organization, hence Trump himself for expenses like the Secret Service renting golf carts.  Each such payment seems to violate the "domestic emolument clause" of the US Constitution, which prohibits state or US government payments to a President for anything other than his salary.  Also, every payment made by a foreign government to the Trump Organization, such as for hotel accomodations or events at Trump Organization properties, appears to violate the "foreign emoluments clause" of  the US Constitution, which prohibits payments by a foreign government to the US President.

In April, 2019, we noted more new and updated sources on Trump administration corruption, including Bloomberg's interactive guide, and updated versions of the Global Anti-Corruption Blog's tracker (see above), and the Sunlight Foundation's "Tracking Trump's Conflicts of Interest" project.

Updates on the Corruption of the Trump Administration

The Trump regime continues to spin off a chaotic barrage of news and distractions, making it hard to concentrate on any one topic.  Unfortunately, discussion of conflicts of interest and corruption has been muted as news media, the pundit class, and everyone else has scrambled to keep up.  Nevertheless, there have been a few recent developments.

Updates of the Sunlight Foundation's "Tracking Trump's Conflicts of Interest"

 The Sunlight Foundation's "Tracking Trump's Conflicts of Interest" project is frequently updated, most recently in August, 2019.  Posts have appeared generally weekly, with the most recent examples focusing on: White House adviser KellyAnne Conway's alleged violations of the Hatch Act, and the properties owned by Trump's son-in-law Jared Kushner's real estate company (look here); an ongoing lawsuit against the Trump Organization (look here); and the continuing battle to obtain financial disclosures from Trump and the Trump Organization (l.ook here)


New Source: the New CREW Report

CREW is the Citizens for Responsibility and Ethics in Washington, a non-profit watchdog organization formed after the 2016 election.  We noted their blog in the April, 2019 update.  Now CREW has published a report on Trump's and colleagues' conflicts of interest, headlined: Trump's 2,000 Conflicts of Interest (and Counting).

The document was organized into these chapters:

- Visits to Trump properties by Trump, White House officials, members of Congress, foreign officials, and corporate executives

-  Political events and spending at Trump properties

- Blurring the line between the White House and the Trump Organization

- International travel and businesses

The report also included an updated summary of over 2300 of Trump's, Trump's family's, and Trump's business' conflicts of interests and apparent corrupt activities, showing the huge scope of the problem:

The president has visited his properties 362 times at taxpayer expense during his administration, sometimes visiting more than one of them in a single day. In 2019 alone, he has visited his properties 81 times, helping to further establish them as centers of political power. The number of days where President Trump has spent time at a Trump-branded property account for almost a third of the days he’s been president.

One-hundred eleven officials from 65 foreign governments, including 57 foreign countries, have made 137 visits to a Trump property, raising the question of how much foreign money has been spent at Trump’s properties.

Additionally, CREW has recorded 630 visits to Trump properties from at least 250 Trump administration officials. This includes high-level White House staff, members of Trump’s cabinet, and individual agency employees. So far this year, CREW has recorded 198 visits by White House officials. Ivanka Trump—who has an ownership interest in the Trump hotel in D.C.—and her husband Jared Kushner, both senior White House advisors, are the most frequent executive branch officials to visit Trump properties, other than the president himself. Jared has made 28 known visits, while Ivanka has made 23.

Members of Congress have flocked to President Trump’s properties, despite their constitutional oversight responsibility to provide a check on the executive branch as it relates to President Trump’s conflicts of interest. Throughout his two and a half years as president, 90 members of Congress have made 188 visits to a Trump property.

Forty-seven state officials, including 20 Republican governors, have made 64 visits to Trump properties, sometimes resulting in state taxpayer funds being spent there.

President Trump has used the presidency to provide free publicity for his properties, which he still profits from as president. Over the course of his presidency, Trump has tweeted about or mentioned one of his properties on 159 occasions, and White House officials have followed suit: Members of Trump’s White House have mentioned a Trump property 65 times, sometimes in the course of their official duties.

Political groups have hosted 63 events at Trump properties since President Trump took office, selling wealthy donors access to the administration while also enriching the president. Seventeen of these have been for Trump-linked groups, and another six have been hosted by groups linked to Vice President Mike Pence. Trump Victory, the joint fundraising arm of Trump’s 2020 election committee and the RNC, has hosted six events at Trump properties just this year, four of which were attended by the President himself. In all, the RNC and other Republican Party groups have had 28 events at Trump properties.

Twenty Trump administration officials have attended 38 political events at a Trump property, giving wealthy donors who fund spending at the president’s businesses access to top officials to discuss their pet issues while they enrich President Trump personally.

Political groups have spent $5.9 million at Trump properties since President Trump took office. So far this year, political groups have spent $1.1 million at Trump properties. In more than a decade prior to his run for president, Trump’s businesses never received more than $100,000 from political groups in a single year.

The Trump Hotel in Washington, D.C. is the top beneficiary of this political spending. In just over two and a half years, the hotel has raked in $2.4 million in traceable political spending.

Foreign governments and foreign government-linked organizations have hosted 12 events at Trump properties since the president took office. These events have been attended by at least 19 administration officials.

Thus it appears that the Trump administration functions as a giant marketing operation for Trump and the Trump Organization.  Furthermore, elected officials, almost entirely from the Republican party, and appointed administration officials have had significant roles in enriching Trump and the Trump Organization.  This appears to be corruption at a breath-taking level unheard of in US history.

This amazing record should also be considered in light of Trump and family's record of legal and ethical issues prior to the presidency.  Despite accusations of ties to organized crime, kickback, fraud, violations of gaming regulations, violations of rules governing non-profit organizations, violations of rules about money laundering, perjury, Trump and his family members often escaped investigation and always escaped any negative consequences, thus demonstrating impunity (look here). 

Summary

We now have had continuous reporting for years of massive conflicts of interest and extensive corruption permeating the executive branch of the US government.  Nonetheless, this topic has been virtually buried under the flood of chaotic news that emanates from the Trump administration every day.

To underscore what we wrote in October

So the driver of US health care corruption may now be the executive branch of government and its relationship with the Trump family and cronies, trumping even the influence of health care corporate corruption.

That corruption appears to be ongoing, worsening, and remains largely anechoic. 

In November, 2017, we noted a report by Transparency International of an international survey of corruption perceptions showing substantial minorities of US respondents thought that US corruption was increasing, and was a particular affliction of the executive and legislative branches of the national government, other government officials, and top business executives.  There was virtually no coverage of these results in the US media, just as there was virtually no coverage of a 2013 survey that showed 43% of US respondents believed that US health care was corrupt.

Similarly, despite, or perhaps because of their tremendous scale, the reports about Trump related corruption listed above have generated little discussion.  Despite the extensive and ever-increasing list of apparently corrupt acts by the Trump and cronies, grand corruption at the top of US government, with its potential to corrupt not just health care, but the entire country and society, still seems like a taboo topic.  The US news media continues to tip-toe around the topic of corruption, in health care, of top health care leaders, and in government, including the top of the US executive branch.  As long as such discussion seems taboo, how can we ever address, much less reduce the scourge of corruption?  The first step against health care corruption is to be able to say or write the words, health care corruption.

So we welcome any additional attention to health care corruption, or the larger corruption within the US government that is making health care corruption even harder to address.

But even if we can take that step, when the fish is rotting from the head, it makes little sense to try to clean up minor problems halfway towards the tail. Why would a corrupt regime led by a president who is actively benefiting from corruption act to reduce corruption? The only way we can now address health care corruption is to excise the corruption at the heart of our government.

It is now over 30 months since Trump was inaugurated, and there has been no real progress.  The fish is still rotting, and so is health care.  What will it take to make something happen?

Johnson and Johnson's Latest Ethical Misadventures: Settled Kickback Allegations, Reportedly Concealed Knowledge of Adverse Effects of a "Sacred Cow" Product

Giant pharmaceutical/ biotechnology/ device company Johnson & Johnson has its famous "credo" which starts with

We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services.  In meeting their needs everything we do must be of high quality..

Nonetheless, the company has a long history of ethical misadventures (look here, and see appendix below).  Now late in 2018,  we note two more Johnson & Johnson misadventures. In chronological order,


$360 Million Settlement of Allegations of Kickbacks to Medicare/ Medicaid Patients to Support Use of Extremely Expensive Drug

The story, per the New York Times, was that Actelion, a drug maker purchased by Johnson & Johnson in 2017, in 2014-2015 had

raised the price of its main drug, Tracleer, by nearly 30 times the rate of inflation. Tracleer, which is prescribed to treat pulmonary arterial hypertension, sells in pharmacies for an average cash price of about $14,500 for 60 tablets, according to the website GoodRx.

But to facilitate charging such high prices, pharmaceutical companies

often help patients pay their out-of-pocket costs through coupons or other financial assistance. These payments are not just about benevolence — they also help blunt the outrage over rising drug prices by limiting how much patients have to pay. Insurers then cover most of the cost.

But federal anti-kickback laws prohibit companies from giving such financial assistance to Medicare and Medicaid beneficiaries because doing so is considered an inducement to buy their drugs. For years, drug makers have skirted those laws by instead donating to nonprofit charities, which then give the money to Medicare patients. Such arrangements are legal as long as there is no direct coordination between the pharmaceutical company and the nonprofit organization.

However,

Federal prosecutors said Actelion violated the law by collecting detailed data in 2014 and 2015 about the patients receiving help from a nonprofit, the Caring Voice Coalition, and using the data to budget for future donations. As a result, Actelion ensured that the money it donated would be used only to assist patients who used its drugs, and not competing companies’ treatments for the pulmonary condition.

Prosecutors said Actelion kept up the practice even after the charity itself warned the company against it.

Actelion also steered Medicare patients to the Caring Voice Coalition who would have otherwise qualified financially for the company’s free drug program. By directing them to the nonprofit, the company avoided having to provide the drug to eligible patients and left Medicare to cover the cost instead, prosecutors said.

So,

Actelion Pharmaceuticals has agreed to a $360 million settlement stemming from an investigation into whether the company illegally funneled kickbacks through a patient-assistance charity, federal prosecutors said Thursday.

But keep in mind that Actelion is now a Johnson & Johnson subsidiary, and by buying it, Johnson & Johnson bought its financial, and ethical and legal liabilities.. So ultimately it will be Johnson & Johnson which pays the settlement.

Johnson & Johnson Alleged to Have Concealed Knowledge that its Baby Powder Contains Asbestos

The first reporting on this story was a lengthy investigative report from Reuters published December 14, 2018, based on newly released documents produced during a variety of lawsuits.  The report stated

that from at least 1971 to the early 2000s, the company’s raw talc and finished powders sometimes tested positive for small amounts of asbestos, and that company executives, mine managers, scientists, doctors and lawyers fretted over the problem and how to address it while failing to disclose it to regulators or the public.

The documents also depict successful efforts to influence U.S. regulators’ plans to limit asbestos in cosmetic talc products and scientific research on the health effects of talc.

Note that since the 1970s, exposure to asbestos has been recognized as an important health hazard.  In 1972, the US agency OSHA limited occupational exposure to asbestos.  Also,

The World Health Organization and other authorities recognize no safe level of exposure to asbestos.

Johnson & Johnson has been sued by

11,700 plaintiffs now claiming that the company’s talc caused their cancers — including thousands of women with ovarian cancer.

After three major jury verdicts that found Johnson & Johnson liable for cancers caused by asbestos in its baby power,

J&J has said it will appeal the recent verdicts against it. It has maintained in public statements that its talc is safe, as shown for years by the best tests available, and that the information it has been required to divulge in recent litigation shows the care the company takes to ensure its products are asbestos-free. It has blamed its losses on juror confusion, 'junk' science, unfair court rules and overzealous lawyers looking for a fresh pool of asbestos plaintiffs

However, there now seems to be substantial evidence that the company's public posturing is a smokescreen. While in the past Johnson & Johnson internal documents about its management decision making related to talc and asbestos were used in litigation,

Many were shielded from public view by court orders that allowed J&J to turn over thousands of documents it designated as confidential. [But] Much of their contents is reported here for the first time.

These showed,

The earliest mentions of tainted J&J talc that Reuters found come from 1957 and 1958 reports by a consulting lab. They describe contaminants in talc from J&J’s Italian supplier as fibrous and 'acicular,' or needle-like, tremolite. That’s one of the six minerals that in their naturally occurring fibrous form are classified as asbestos.

At various times from then into the early 2000s, reports by scientists at J&J, outside labs and J&J’s supplier yielded similar findings. The reports identify contaminants in talc and finished powder products as asbestos or describe them in terms typically applied to asbestos, such as 'fiberform' and 'rods.'

In 1976, as the U.S. Food and Drug Administration (FDA) was weighing limits on asbestos in cosmetic talc products, J&J assured the regulator that no asbestos was 'detected in any sample' of talc produced between December 1972 and October 1973. It didn’t tell the agency that at least three tests by three different labs from 1972 to 1975 had found asbestos in its talc – in one case at levels reported as 'rather high.'

The article shows that the company repeatedly found evidence that asbestos was present in the raw talc that went into its baby powder, first in 1957, and could be found at times in samples of the finished product since 1971.  Since the 1970s, Johnson & Johnson managers realized that the asbestos was a problem.  For example,

J&J research director DeWitt Petterson visited the company’s Vermont mining operation. 'Occasionally, sub-trace quantities of tremolite or actinolite are identifiable,' he wrote in an April 1973 report on the visit. 'And these might be classified as asbestos fiber.'

J&J should 'protect our powder franchise' by eliminating as many tiny fibers that can be inhaled in airborne talc dust as possible, Petterson wrote. He warned, however, that 'no final product will ever be made which will be totally free from respirable particles.' Introducing a cornstarch version of Baby Powder, he noted, 'is obviously another answer.'

Slightly later on December 14, 2018, the New York Times published its own story on asbestos in Johnson & Johnson talcum powder.  It corroborated the Reuters report while adding informative detail.  It started with:

An executive at Johnson & Johnson said the main ingredient in its best-selling baby powder could potentially be contaminated by asbestos, the dangerous mineral that can cause cancer. He recommended to senior staff in 1971 that the company 'upgrade' its quality control of talc.

Two years later, another executive raised a red flag, saying the company should no longer assume that its talc mines were asbestos-free. The powder, he said, sometimes contained materials that “might be classified as asbestos fiber.”

The carcinogen, which often appears underground near talc, has been a concern inside the company for decades. In hundreds of pages of memos, executives worried about a potential government ban of talc, the safety of the product and a public backlash over Johnson’s Baby Powder, a brand built on a reputation for trustworthiness and health.

Executives proposed new testing procedures or replacing talc outright, while trying to discredit research suggesting that the powder could be contaminated with asbestos, according to corporate documents unearthed by litigation, government records obtained by The New York Times through the Freedom of Information Act, and interviews with scientists and lawyers.

In one instance, Johnson & Johnson demanded that the government block unfavorable findings from being made public. An executive ultimately won assurances from an official at the Food and Drug Administration that the findings would be issued only 'over my dead body,' a memo summarizing the meeting said.

Thus, despite these warnings of asbestos in talcum powder, Johnson & Johnson continued to sell it.  There is certainly now strong reason to suspect that for decades Johnson & Johnson management has been denying its own fears about asbestos contamination of its baby powder, and doing its best to hide evidence of its hazards, thus benefiting the corporate bottom line, but allowing continued exposure of large number of people to a potentially hazardous, even fatal product.



The Business World Tries to Shrug It Off

Responding to the Reuters and New York Times story, many business pundits stated their confidence in Johnson & Johnson as an investment.  For example, Charley Grant wrote in the Wall Street Journal,

But while investors should be wary, they needn’t panic. J&J’s strong finances and diverse revenue base are good coping mechanisms.

Wells Fargo, per CNBC, opined

the selling based purely on the outcomes of any talc litigation is likely overstated.

But does Johnson & Johnson's management really act on its belief that its "first responsibility is to "doctors, nurses, and patients, to mothers and fathers?" On CNBC,  Bill George wrote,

It is not plausible that these leaders knew nearly five decades ago that their iconic baby powder caused cancer and continued to market the product. This is a company whose leaders consistently try to do the right thing, admit their mistakes, and continue to develop life-saving products that restore the health of millions of people around the world.

While the plaintiffs' attorneys may continue to pursue their cases, I feel confident that J&J will be shown to put the interests of its customers first, and maintain its reputation for the highest integrity.

I wonder if Mr George's confidence was boosted by his previous work as a paid speaker for Johnson & Johnson, and former chairman and CEO of Medtronic, a company which has had its own share of ethical misadventures (look here)?  In any case, some recent history calls into question Johnson & Johnson's "reputation for the highest integrity."

Johnson & Johnson's Long History of Ethical Misadventures

So, recent reports suggested that Johnson & Johnson willfully acquired a company that appears to have provided kickbacks to patients in apparent violation of US law in an effort to support high drug prices.  Furthermore, Johnson& Johnson appears to have concealed considerable evidence that one of its primary products might be dangerous in order to support the sales of a "'sacred cow,' as one internal email put it (per the Reuters report).

These are but  the latest in a long string of misadventures by the company, as we have been documenting over years.  (Our collected posts on Johnson & Johnson are here.  An updated version of their legal record since 2010 is at the end of this post.)

Perusing the list suggests that this giant company (with about $70 billion in yearly revenue) is a poster child for bad behavior by health care organizations.  It has faced a multitude of allegations leading to settlements, and sometimes findings of guilt.  The charges included many instances of deceptive and unethical marketing, some that promoted drugs or devices for use in situations in which they may have had harms outweighing their benefit, some that involved concealing knowledge of their risks, and some of selling adulterated drugs or defective products. 

So the new allegations of deceptive marketing meant to conceal a hazardous product are just the latest in the series.

What is striking is that the company and its management have not faced more consequences for this sorry track record.

Although the company has paid multiple fines and made numerous monetary settlements over the years, none have been big enough to affect its immense revenues.  Furthermore, ultimately the monies used to pay them came from all Johnson & Johnson employees in the form of smaller paychecks; customers, patients and the public at large in the form of higher prices; and only to some extent by investors in the form of slightly lower profits.  Meanwhile, it appears that the company's top managers made an awful lot of money, possibly in part as rewards for the revenues produced by the misadeventures.

Former Johnson & Johnson CEO William Weldon, upon his retirement in 2014, was to receive a retirement package estimated to be worth from $143 to $197 million (look here).  In 2010, his total compensation was $29 million (look here).   According to the 2012 Johnson and Johnson proxy statement, his 2011 total compensation was greater than $26 million. As far as I can tell, Mr Weldon never suffered any negative consequences for his company's sorry record, and retired a very rich man. (look here).

Current CEO Alex Gorsky received  $25 million total compensation in 2014 (look here).  More recently, the New York Times reported his 2017 total pay was $22.8 million, making him the seventh highest paid health care executive in that year, by their accounting. 

While management made so much money, very rarely has anyone at the company who was involved in authorizing, directing, or implementing any of the bad behavior had to suffer any negative consequences, therefore appearing to enjoy impunity.

So what was to deter management from embarking on further misadventures, as long as the results might be enlarging management's personal wealth?  

This is all in line with what we have been discussing for years.  In general, we have seen many legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks.  Despite the unsavory nature of the behaviors revealed by most settlements, which often appeared to risk patient harms, the companies involved usually have had to pay fines that were tiny relative to their multi-billion dollar revenues.  They companies only seldom have had to admit responsibility, and almost never did a settlement cause company managers and leaders to  suffer any negative consequences for enabling, authorizing, directing or implementing the bad behavior.

This adds to the evidence suggesting that US health care is rigged to benefit top insiders and their cronies, and as such, is part of a larger rigged system.  We have previously discussed how market fundamentalism (or neoliberalism) led to deregulation, which enabled deception, fraud, bribery, and intimidation to become standard business practices, and allowed increasing concentration of power by large corporations. Managerialism allowed the top leaders of these corporations and their insider cronies to amass increasing power and money. Everyone else, other employees, stockholders of public corporations, customers, vendors and suppliers, and the public at large lost out.   In health care, these changes led to an increasingly costly system which produced increasingly bad results for patients and the public. 

We have called for true health care reform to derig the system. Unfortunately, despite our hopes, perceptions of a rigged system may not always inspire honest reform. Instead, they can enable the rise of demagogues and wouldbe dictators who promise only they can solve the problem.  Donald Trump cried out that only he could fix our problems and drain our swamps.  However, at least in terms of policing white-collar crime, particularly in health care, he seems to be letting the swamp waters rise.  And now he seems to have had his own record of impunity (look here).  

While we thus have bigger problems to solve than the impunity of health care leaders, let us remember the need for wholesale, real health care reform that would make health care leaders accountable for what their organizations do, particularly when these organizations misbehave.


Appendix - Johnson and Johnson Legal Record since 2010

 2010
- Convictions in two different states for misleading marketing of Risperdal
- A guilty plea for misbranding Topamax

2011
- Guilty pleas to bribery in Europe  by Johnson and Johnson's DePuy subsidiary
- A guilty plea for marketing Risperdal for unapproved uses  (see this link for all of the above)
- A guilty plea to misbranding Natrecor by J+J subsidiary Scios (see post here)

2012 
  - Testimony in a trial of allegations of unethical marketing of the drug Risperdal (risperidone) by the Janssen subsidiary revealed a systemic, deceptive stealth marketing campaign that fostered suppression of research whose results were unfavorable to the company, ghostwriting, the use of key opinion leaders as marketers in the guise of academics and professionals, and intimidation of whistleblowers. After these revelations, the company abruptly settled the case (see post here).
-  Johnson & Johnson was fined $1.1 billion by a judge in Arkansas for deceiving patients and physicians again about Risperdal (look here).
-  Johnson & Johnson announced it would pay $181 million to resolve claims of deceptive advertising again about Risperdal (see this post).

2013
-  Johnson & Johnson settled case by shareholders alleging that management made misleading statements and withheld material information about manufacturing problems (see this post)
-  Johnson & Johnson Janssen subsidiary pleaded guilty to a charge of misbranding Risperdal, and settled for a total of $2.2 billion allegations that it promoted the drug for elderly demented patients and adolescents without an indication, and despite evidence of its harms (see this post).
 -  Johnson & Johnson DePuy subsidiary agreed to settle with multiple plaintiffs for $2.5 billion allegations that it sold defective mental-on-metal artificial hip, and hid evidence of its harms .
- Johnson & Johnsonn Janssen subsidiary was found by two juries to have concealed harms of its drug Topamax (see this post for this and above case).
- Johnson & Johnson Ethicon subsidiary's Advanced Surgical Products and two of its executives agreed to settle charges by US FDA that is sold mislabeled products used to sterilize equipment such as endoscopes (see this post).
- Johnson & Johnson fined by European Commission for anticompetitive practices, that is, collusion with Novartis to delay marketing generic version of Fentanyl (see this post).

2014 
- Johnson & Johnson DePuy subsidiary settled Oregan state charges that it marketed the ASR XL metal-on-metal hip joint prosthesis without disclosing its high failure rate (see this post).

2015
-  Johnson & Johnson found by jury to have concealed harms of Risperdal.
-  Johnson & Johnson Ethicon subsidiary found by jury to have concealed harms of its vaginal mesh device.
-  Johnson & Johnson McNeil subsidiary pleaded guilty to marketing adulterated Tylenol. (see this post for three items above.)

2016
- Johnson & Johnson subsidiary Aclarent settled allegations that it sold its Stratus device for unapproved uses.  Two former executives of that subsidiary also were found guilty of distributing misbranded and adulterated devices (see this post)