Published 2013.02.22 in CommPRO.biz

3,800 to Zero
 
Following the Savings & Loan Crisis a couple decades ago, roughly 3,800 bank executives were jailed. The more severe crisis we are slogging though, has for all intents and purposes, produced zero convictions, no jail time for the Wall Street executives who triggered it. You may have heard that one of three financial rating agencies that awarded AAA ratings to the toxic mortgage packages the big banks referred to as “Crap,” Standard & Poor’s, faces $5 billion in Securities Exchange Commission (SEC) fines. However, not one S&P executive faces prosecution.

The appalling failure of federal and state entities to hold responsible those who threw us into the most damaging recession in seven decades is shameful. In reviewing the litany of excuses offered for this travesty, this much is clear: it is difficult to prove fraud. And, George W. Bush’s Treasury Secretary Hank Paulson created a bailout atmosphere seemingly designed for the ethically challenged monster banks. Our leaders, Treasury Secretary Jack Lew, Attorney General Holder, and the President himself, can’t seem to deal with the legal challenges. It’s a situation crying out for creativity.
 
Al Capone, whose criminal “Creds” ran from hooch to hookers with lots of killings thrown in, laughed in the faces of the authorities just as the bankers have been laughing since the bailout. The banks sucked up the taxpayers’ bucks in billion dollar gasps, like the dying beasts they were. Once they were on sound footing, instead of using our money to help the economy, they went right back to the same crazy risky stuff that caused the recession. And why not? They know they can stick the taxpayers with their losses. When the authorities couldn’t pin Capone’s criminal activities on him they got creative and tried him for tax evasion, netting Capone 11 years in Alcatraz.
 
Senator Carl Levin watched Goldman Sachs CEO, Lloyd Blankfein, smirk his way through testimony before his Senate Committee and then turned his findings over to the Justice Department. Levin, a Harvard Law graduate and experienced prosecutor, was clearly disturbed when Justice failed to take action. The DOJ also declined to prosecute egregious criminal behavior on the part of HSBC, citing a fear that to do so might take the bank down and threaten our economy.
 
It’s time for creativity. The Supreme Court says corporations are people, so let’s prosecute their living parts. Let’s charge top executives and boards of directors who know –or have a fiduciary responsibility to know– what their corporation is up to. Sending the Board and the “C” Suite off to the slammer is not going to sink the ship. One thing we know for sure: there are lots of topnotch managers who could take over and probably do a better job than those they replace, especially when replacing the nitwits who green-lighted the HSBC mess. Unlike a massive fine that becomes a “Cost of Doing Business,” the prospect of a jail term should put a halt to the greed-fueled behavior all too common in our banking sector.

Published 2013.02.13 in CommPRO.biz

Deadly Doping

Fiction could never match the bizarre tale of greed and deceit that is bubbling to the surface in U.S. District Court in Boston. To understand the depth and breadth of this ethical cesspool, read investigative journalist, Kathleen Sharp’s book Blood Feud (in paperback Blood Medicine). It reads like a thriller. Tragically, however, it is playing out in real life.

Mark Duxbury was a Super-Star pharma rep for Ortho (a Johnson & Johnson subsidiary) until he began to realize that, used in the off-label doses he was being pushed to recommend, Procrit (AKA “EPO”) had dangerous side effects up to and including death. At that point he and another Ortho rep tried to call attention to the danger EPO presents. Their whistle-blowing efforts got them fired, but they soldiered on without much luck until Kathleen Sharp took time to listen to them lay out the complex web the Big Pharma giant has created.

Duxbury began bugging Sharp in 2004; she did her best to ignore him until EPO (Epoetin alfa, also known as Procrit, Eepgen, and Aranesp) was red flagged by the FDA in 2007. After Sharp’s meeting with Duxbury she realized that this story was way more than she could cover in one of her normal contributions to the New York Times, Fortune, and other major publications. Sharp realized it would take a book. Her real life thriller was ultimately selected as an Oprah Top 10 Pick.

As it turned out, EPO in large doses seemed to work miracles with some patients it even gave athletes like bicycle racers (Lance Armstrong among others) extra stamina to power them to victory. But it also accelerated some forms of cancer, triggered heart attacks, strokes, and aneurysms; it proved fatal to many patients. The book paints a sorry picture of doctors and hospitals accepting huge amounts of free Procrit and billing Medicare for its use. The whistle-blowers estimate that these medical entities rang up more than three billion dollars in Medicare fraud.

So far the private lawsuit in Federal Court has seen the Justice Department on the sidelines. Given the level of alleged fraud that seems strange. It is especially odd in light of the connection between Attorney General Eric Holder and the law firm representing Johnson & Johnson. Holder was a partner in that firm until he joined the Obama administration. Wouldn’t you assume that he would want to remove any hint that he was holding back in pursuing his former client? It’s past time for our Justice Department to act and bring those responsible for this series of tragedies to justice.

Kathleen Sharp’s book is on its way to becoming a motion picture. Sadly, Mark Duxbury will not see the story he triggered come to its conclusion in court or on the screen; he died at age 49.