The news of the UHC Lichlord of an executive shooting made me pickup my Kindle for the highlights and do a thorough analysis of Big Dirty Money. I first encountered Jennifer Taub's "Big Dirty Money" in late 2020, nursing a black coffee at Cultivate in Ypsilanti Michigan, part of my year of reading challenge. The irony of reading about white-collar crime in a gentrified city cafe wasn't lost on me. But what really struck me was how prescient the book would become - from the pandemic corporate profiteering to the recent UHC incident. More people died from that single corporate manslaughter than John Wick's entire body count across four movies (439 according to ScreenRant). At least Wick had the decency to face his victims, before stabbing them with a fuckin' pencil.
Taub's central thesis is devastating in its simplicity: America operates two distinct justice systems. The elite class, she demonstrates, has "the power to define what was criminal and could more readily change laws that either disfavored them or interfered with their predatory business practices." Unlike street criminals, white-collar criminals "have a loud voice in determining what goes into the statutes," as well as how existing law "is implemented and administered."
Consider this statistic that made me spill screenshotted so many quotes, and posting this on social: "Federal prosecutors pass on pursuing white collar cases half of the time." Half. Meanwhile, regular criminal cases are dropped only 30% of the time. The excuses are always the same - "insufficient evidence" or the maddeningly vague "prioritization of federal resources and interests." It's the kind of bureaucratic language that obscures lethal consequences.
The Purdue Pharma saga reads like a corporate horror story. Between 2008 and 2015, while thousands were dying from opioid addiction, Purdue paid the Sackler family more than $4 billion. Think about that number for a moment. That's billions of dollars built on a mountain of bodies. By 2007, opioid overdose deaths had reached 18,515, with 12,796 from prescriptions. The company's response? They ran "the most aggressive marketing campaign ever undertaken by a pharmaceutical company for a narcotic pain killer."
What makes this particularly insidious is how these criminals operate in plain sight. As Taub notes, "they keep their hands sweet and their boots clean, but they are as culpable as a street thug." The genius of their approach, she argues, is "to make victims partially complicit in their own victimhood." I saw this firsthand during the 2008 financial crisis even just leaving high school - the news cycles of people blaming themselves for predatory loans while the architects of the collapse walked away with bonuses.
The numbers are staggering. In the Trump era alone, white-collar prosecutions and penalties plummeted. The SEC's penalties dropped from $5 billion under Obama to just $1.9 billion under Trump - a 62% decrease. Criminal cases? Even worse: from $14.15 billion to $3.93 billion, a 72% decline. Justice isn't just blind; it's been bought.
It's domestic financial terrorism, most infuriating is the deliberate gutting of enforcement mechanisms. The IRS's 2019 budget was $2 billion lower than in 2009, with 30,000 fewer employees. The result? "Corporations and the wealthy are the biggest beneficiaries of the IRS' decay." Here's the kicker: while millionaires dodge taxes, "the very lowest earners—those who bring in $20,000 or less per year of personal income—are just as likely to be audited as the top 1 percent."
The immunity extends beyond financial crimes. Taub points to troubling examples of elite impunity in violent crimes, noting how the wealthy enjoy protection "from unlawful conduct well beyond offenses committed in the workplace." Remember the DuPont heir who raped his three-year-old daughter? He got probation because the judge worried he "would not fare well in prison." The absurdity would be laughable if it weren't so tragic.
When the pandemic hit, all these patterns intensified. While 39% of households earning less than $40,000 lost jobs in March 2020, corporations lined up for a $500 billion bailout. The following years revealed an even darker truth about corporate America's priorities. As inflation soared to 40-year highs in 2022, reaching 9.1% at its peak, basic necessities became luxuries for many Americans. The price of eggs jumped 70% in 2023, while overall grocery prices rose more than 20% between 2020 and 2024.
Meanwhile, corporations reported record profits under the guise of "inflation-related price increases." For example, Walmart, once the bastion of affordable shopping, saw its net income surge to $15.51 billion in 2024 while many of its former customers turned to dollar stores, which themselves have been steadily raising prices. The irony is palpable: the store that built its empire on the promise of everyday low prices has become, for many Americans, an aspirational shopping destination. This isn't just about inflation, it's about corporate profiteering masked as economic necessity. Many of these same companies had spent years on stock buybacks rather than building reserves or protecting workers, and when crisis hit, they passed the costs directly to consumers while protecting their profit margins. The same old story: privatize the profits, socialize the losses, but now with the added twist of using inflation as cover for price gouging.
The most chilling aspect of Taub's analysis is how systematic this all is. It's not just about individual bad actors; it's about a carefully constructed system of immunity. From "forced arbitration" clauses that silence victims to corporate structures designed to diffuse responsibility, every aspect of the legal system has been engineered to protect the wealthy from consequences.
Reviewing this book again in 2024, particularly in light of assassination/shooting, I'm unsurprised by the same old media's pandering of United Health Care's CEO murder from Minnesota Senate, and how much worse things have gotten, and will be getting in 2025-2028. The UHC incident isn't an anomaly; it's the logical conclusion of a system that values profits over people. When we allow corporations to calculate human deaths as acceptable risks on a spreadsheet, we shouldn't be surprised when those calculations turn deadly.
As Taub concludes, and I agree, this isn't just about money - it's about power, accountability, and whose lives we value as a society. Until we confront this fundamental inequity in our justice system, we're complicit in what amounts to legalized murder on a massive scale. At least John Wick looks his victims in the eye, his victims died happy knowing it was the Babayaga that got them, and not some Lichlord of an executive.
Book Highlights
Notebook Export
Big Dirty Money
Citation (APA): Weiiiii. (2020). Big Dirty Money [Kindle iOS version]. Retrieved from Amazon.com
Chapter 1
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The elite class had the power to define what was criminal and could more readily change laws that either disfavored them or interfered with their predatory business practices. Due to access to power, unlike low-level offenders, white collar criminals “have a loud voice in determining what goes into the statutes,” as well as how existing law “is implemented and administered.” They can lobby to make laws too weak to deter the relatively large and powerful.
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crimes of the lower class are handled by policemen, prosecutors, and judges, with penal sanctions in the form of fines, imprisonment, and death.” Yet he noted, “The crimes of the upper class result in no official action at all, or result in suits for damages in civil courts, or are handled by inspectors, and by administrative boards or commissions, with penal sanctions in the form of warnings,
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Poverty did not cause criminality. But what did? He sought an alternative theory that might explain the crimes of both the upper and lower classes. The hypothesis he settled on was that crime is learned. Through relationships with others, future offenders learn motives, values, techniques, and rationalizations.
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Really similar to cheating
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their
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In a pithy aside, Sutherland found an interesting distinction between the two classes. “The inventive geniuses for the lower class criminals are generally professional criminals, while the inventive geniuses for many kinds of white collar crime are generally lawyers.”19
Chapter 2
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In a study of convictions over two years in seven federal districts, Payne explained, “most offenses described as white-collar were actually ‘committed by those who fall in the middle class of our society.’”24 This finding is borne out by FBI data. In a 2000 report on measuring white collar crime, the FBI revealed that in 1997 and 1999, the median value of property lost through any given white collar crime offense was just $210. In contrast, the mean (mathematical average) was $9.3 million.
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But how many were white collar crimes? The 1992 report listed in a detailed narrative section white collar crime cases as including financial institution fraud; official corruption; environmental, health, and safety crimes; money laundering; insurance fraud, health care fraud, and other frauds. Defendants charged with these white collar offenses comprised 5 percent of the total that year. But looking from 1992 to 2018 is like comparing apples to oranges.
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Taken together, this is very broad. It sweeps into the definition of white collar crime “blue collar” occupational crime like “fraud against business institutions” and “embezzlement,” for example. Also, other categories like “insurance fraud” capture too much.
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accident and trying to collect insurance, which I would not deem white collar crime. Then there’s insurance fraud like bilking Medicare out of $205 million, as Judith Negron had done. She was pardoned by President Trump in February 2020—now that I would deem white collar crime.37
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Health and safety violations, including cases brought against corporations that sell dangerous food and drugs to the public, once included under white collar crime back in 1992, had also been moved elsewhere.
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It reveals the reasons why federal prosecutors decided not to file a criminal case or to later drop it. That year, prosecutors declined to pursue or dropped 21,290 criminal matters. Of those, 4,349 were white collar. That’s almost the same number of white collar cases actually filed that year. Think about it. Federal prosecutors pass on pursuing white collar cases half of the time.
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Of 59,630 non–white collar cases filed that year, 16,941 were immediately or eventually dropped—roughly 30 percent. In short, the odds of getting away with a crime are much higher for those accused of white collar offenses whose cases make it to the U.S. Attorneys’ offices.
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One
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That year, prosecutors declined to pursue 13,388 criminal matters due to “insufficient evidence.” Almost a quarter of the federal criminal cases that were abandoned due to insufficient evidence were white collar matters. Another rather broad reason for such declinations was “prioritization of federal resources and interests.” Notably, prosecutors were far more likely to decline white collar cases than others due to this amorphous “prioritization” reason.
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First, offenses committed by business entities or industries, generally referred to as “corporate crime.”
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Second, those committed by the most wealthy and powerful in the private sector, or “elite crime.”
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Third, cybercrime and other forms of predation that take advantage of the speed and anonymity of technology platforms to victimize many.
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Fourth, crime involving government officials and political campaigns. Finally, the division should put out a regular, comprehensive report that properly groups together all white collar criminal activity, either from arrest or from reporting to a federal agency, all the way through to its ending disposition, whether that means a case was never referred for prosecution, was accepted and denied, or was prosecuted with a conviction and prison sentence
Chapter 3
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In July 2019, top-tier corporate law firm Wachtell, Lipton, Rosen & Katz shared with clients and the broader public the state of white collar and regulatory enforcement since Donald Trump took office.3 Bottom line: There has been “a significant drop over the past two years in both the number of white collar prosecutions and the scale of corporate fines and penalties.” Even civil penalties leveled by federal agencies were down by as much as 94 percent since the last year of President Obama’s term.4
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Under the deal, Walmart would have been required to plead guilty to bribing foreign government officials in violation of the Foreign Corrupt Practices Act and pay nearly $1 billion.6 Instead, in June 2019, Walmart agreed to pay a $137 million penalty to settle with the DOJ and to disgorge $144 million to the SEC.7 Instead of an admission of guilt by the parent corporation itself, only its Brazilian subsidiary entered a guilty plea.8
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With Trump in the White House, “they looked to his administration for a more sympathetic ear—and got one.” Under Obama, the DOJ sought $7 billion from Barclays to settle civil claims in connection with the bank’s peddling toxic mortgage-backed securities. Under Trump, Barclays paid just $2 billion in that settlement. And RBS, which had been under criminal investigation by the Obama DOJ, entirely dodged criminal charges.10 These were not anomalies.
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In the final twenty months of Obama’s term, the SEC imposed $5 billion in penalties and disgorgements of ill-gotten gains. In contrast, it was just $1.9 billion under Trump in his first twenty months. That’s a 62 percent drop. The difference is more stark when it comes to criminal cases brought by the DOJ. The Obama Justice Department imposed $14.15 billion in penalties, and Trump’s DOJ just $3.93 billion—a decline of 72 percent.12
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era of the late 1990s and early 2000s. During this period, one corporate leader after another was caught cooking the books and thereby misleading investors, often motivated to make a company look healthier than it was in order to keep its stock price soaring, along with their own compensation.
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In the four years between July 2002 and March 2006, the DOJ convicted more than eighty-two CEOs, eighty-five corporate presidents, thirty-six chief financial officers, and fourteen chief operating officers in corporate fraud cases.13
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In
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Until quite recently, corporate crime waves and crackdowns followed a predictable pattern in modern America. First, the dangerous practices of a specific business or industry would cause death or serious economic destruction. Think of the unsanitary conditions in the early-twentieth-century meatpacking industry, which spread deadly foodborne diseases.
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Next, after the disaster, concern for the victims and contempt for the “villains” would grow, with a focus on the root causes of the crisis, often thanks to attention brought by journalists. Upton Sinclair’s blistering 1905 serial and subsequent 1906 novel The Jungle exposed the public to the grotesque practices within the Chicago meatpacking industry.
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Then an outraged but organized public would pressure authorities to do several things: make sure this does not happen again, hold those responsible accountable, and help the victims. If the crisis stemmed from clear violations of existing criminal laws, the government might prosecute the responsible individuals and sometimes the business entity itself. If successful, such civil and criminal cases against the wrongdoers could also bring compensation for the victims or their families.
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In the case of the Exxon Valdez spill, the Department of Justice prosecuted both Exxon and the ship’s captain. The corporation pleaded guilty to misdemeanor environmental crimes, and a jury found the captain guilty, though he successfully had his conviction overturned on appeal. But it took twenty years for the victims to receive compensation.28
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Sometimes, with enough sustained pressure, the states or Congress would propose new laws designed to ban or restrict the business practices that led to the tragedy in the first place. However, sometimes it would take repeated incidents for Congress to act.
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Often, such reform legislation would establish (or strengthen the existing power of) a federal agency to enforce the law and set rules to prevent a repeat catastrophe. The Meat Inspection Act required the existing U.S. Department of Agriculture (created under Lincoln) to inspect livestock before and after slaughter and processing for human consumption. The
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Risk is everywhere, they argued then and they argue now. Do regulations really do anything but slow innovation and kill jobs? they ask. So the next phase, after reforms are put in place, is for businesses to work hard through lobbying efforts to remove the safeguards. Industry often starts by trying to lift the restrictions on small businesses, or by poking holes in the ones that seem excessive or less sensible than others. Then they go for the kill, right to the heart of the most effective safety measures.
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If they gain enough money and power, impacted industries will work to “capture” the regulatory agencies and also ideally members of Congress. When this deregulation results in danger and damage again, then the pattern would repeat.
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The Justice Department led by Attorney General Eric Holder from 2009 to 2015 let every bank executive engaged in accounting or securities fraud get away without prosecution. For example, as mentioned in the preface, in 2010, Angelo Mozilo, former CEO of Countrywide Financial, agreed to pay $22.5 million to the SEC to settle claims that he had deliberately misled investors.
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Boards of directors and officers are typically legally immune (or are at least fully indemnified), thanks to the very protective measures embedded in corporation law over the years that allow them and their firms to take the biggest slice of the gains but socialize the losses.
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And unless they were directly involved, the shareholders even of a giant family-owned enterprise will not be held responsible in any way for criminal actions taken by their companies. In the end, our system ensures that most of the externalized costs fall on the victims, their families, and communities. Let’s remember
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So long as there has been business on this continent, there has been business crime. In the colonial era, the governing bodies used fines and public shaming to punish cheats, forgers, counterfeiters, and even merchants who produced poor-quality bread
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The hope was to discourage the specific offender from transgressing again and also to set a highly noticeable example to deter others. For instance, in 1638, Edward Palmer, a carpenter from Massachusetts, was “fyned £5 & censured to bee sett an houre in the stocks.” His crime? Extortion. The village accused him of overcharging for wood and labor when building the new wooden stocks for them.38
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With a family-owned small business, such a question would not usually arise. Because the owners and day-to-day managers were one and the same, when businesses were small and local, finding the responsible person was not difficult as a practical matter. Yet in the early twentieth century, with giant business’s need for capital from the public, came what Adolf Berle and Gardiner Means called the separation of ownership from control.54 Shareholders were numerous, distant, and uncoordinated. Directors oversaw but did not run the day-to-day affairs. Professional managers were growing in power.
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Would or could the law hold any or all of the following accountable? The low-level corporate employee who performs the unlawful act if he does not personally benefit. The distant high-level manager who makes demands, who possesses both control and the ability to prevent illegal activity, but deliberately keeps himself in the dark about the details. The board of directors. The distant shareholders. So, of course, it followed that corporations (which are chartered by states) began to incorporate in those states where corporation laws were more favorable to executives and boards—the people who controlled the corporations.
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The complexity and scope of business crime flourished as the stakes and opportunities grew. As businesses became more powerful through the use of the corporate organizational form, greater distinctions emerged between how law enforcement would treat crimes by big business enterprises as compared to crimes committed against big businesses. The absence of bank and investment firm regulation, as those enterprises flourished, would also help lead to the Great Crash of 1929.
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These included the Banking Act of 1933 (also known as Glass-Steagall), which separated commercial banking from investment banking; the Securities Act of 1933, which promoted full, truthful disclosure in the offering of investments to the public; and the Securities Exchange Act of 1934, which regulated stock exchanges, brokers, and trading.
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In 1970, Congress enacted the Organized Crime Control Act, which included the Racketeer Influenced and Corrupt Organizations Act (RICO). While RICO initially targeted classic mobsters, the language is such that prosecutors and private parties have successfully used this law against other ordinary business entities. That same year, the Bank Secrecy Act, which aimed to help the U.S. government detect money laundering, was also signed into law. Also in 1970, President Nixon created the Environmental Protection Agency, and later Congress amended existing environmental law to give the newly created EPA regulatory authority. In 1972, the Consumer Product Safety Act was passed; in 1974, the Safe Drinking Water Act and the Hazardous Materials Transportation Act.
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Weve always had the ability to regulate!!
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It would also include legislation enacted under President Clinton—namely, the Private Securities Litigation Reform Act of 1995, which made it more difficult for shareholders to hold corporations and executives accountable for securities fraud. Furthermore, in the Carter and Clinton administrations, legislation was enacted that allowed the credit default swap and private mortgage securities markets to flourish, enabling the toxic mortgage-backed securities that eventually blew up the banking system in 2008.
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In the first ten years of its existence, the SEC returned more than $14 billion to investors through FAIR funds.
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But we didn’t even make it ten years after the accounting scandals to arrive at the global financial crisis of 2008. And we barely caught our breath after that before the current white collar crime epidemic really took hold.
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There were, however, a few exceptions, portions of the law not welcome by the banks, and they kept fighting to weaken and remove them. On the hit list were the provisions creating “bounty fees” for whistleblowers, the Consumer Financial Protection Bureau, and the Volcker Rule (designed to forbid speculative short-term trading by federally insured banking firms using customer funds).
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Serageldin helped cover up more than $100 million in losses in the bank’s mortgage-backed securities trading book. A federal judge sentenced him to thirty months in prison for conspiracy to falsify books and records and commit wire fraud. Think about it for a moment. Worldwide there were forty-seven executives convicted and sent to prison by 2018 for their roles in the 2008 meltdown. Iceland jailed Icelanders. Spain jailed bankers from Spanish banks. In Ireland, it was bankers from the Anglo Irish Bank, and so on.78 But the only bank executive who was sentenced to prison in the United States was born in
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Similarly, at the local level, Manhattan district attorney Cyrus Vance Jr. had all of Wall Street in his jurisdiction for enforcing New York state law, but the sole bank his office chose to prosecute was Abacus Federal Savings Bank, a small institution owned and operated by a family who’d come from China to the United States and that largely served the immigrant community. In
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Lanny Breuer, former assistant attorney general for the Criminal Division of the DOJ, faced a lot of heat. When asked on Frontline to provide a reason criminal cases were not pursued against Wall Street bankers, he said, “We looked at those as hard as we looked at any others,” but explained, “when we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.”
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Even more troubling, Breuer also said that to convict for fraud, “I have to prove that you had the specific intent to commit a crime and that the other side relied on it.”82 This is false. The government does not need to prove reliance. Reliance is a necessary element in a civil fraud case brought by a private party. It is absolutely not an element for a securities fraud or wire fraud case brought by the federal government. Breuer, of all people, should have known that.
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also said, “Now a financial firm is of course a legal fiction; it’s not a person. You can’t put a financial firm in jail,” but “obviously illegal acts ultimately are done by individuals, not by legal fictions.”84 When the banks collapsed in the fall of 2008, trillions of dollars were committed to rescue the entire banking system. Republican president George W. Bush admitted, “I’ve abandoned free market principles to save the free market system.” And yet, no one saved American families.
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The millions of families who lost their homes to foreclosure were not spared the rough justice of the free market. And the executives responsible for peddling high-risk mortgages and deceiving their own investors? Somehow the Justice Department lost the will to prosecute. They will say they did not have the facts, they did not have the law. But the truth is that they did not have the courage.
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sentence. In 2010, 2014, and 2017, the chamber filed amicus briefs to limit protection of corporate whistleblowers under the Dodd-Frank Act, including for cases before the U.S. Supreme Court. Staying on message, in 2019, the chamber also argued in a court brief that people who commit commodities fraud should not be subject to criminal charges under the wire fraud statute.86
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That view is mistaken.” Walking back the importance of collateral consequences, Holder said that “a company’s size will never be a shield to prosecution or penalty” if there is evidence of a crime. He sounded quite reasonable when he also said that the appearance of criminal wrongdoing is not enough to bring a case. But there’s the rub. Smoke rising off in the distance gives the appearance of fire. And no, we should not prosecute someone for arson on that basis alone. We need to send the fire truck over to investigate. Especially when the line between a mere civil infraction and a crime is often one of intent, resources are needed to gather the necessary evidence, to flip the right witnesses. We also need prosecutors who have the skill to simplify complex ideas in front of a jury. There was a way, but was there a will?
Chapter 4
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Most viewers didn’t know her personal story or the full context. McGowan was not just brought low by her own addiction and poor choices. She was also an indirect victim of white collar crime. She was easy prey in a rapacious scheme to get rich by flooding the United States with highly addictive pain pills. The friend who’d crushed a line of fentanyl that McGowan snorted before going shopping had directly contributed to her overdose. But the original enablers were big businesses, their owners, and the distributors and pill-mill doctors along the distribution chain who profited off opioid addiction and misery.
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Thousands die from unsafe working conditions in the United States. Millions die worldwide from air pollution, according to the World Health Organization.8 And correspondingly, lives are saved with appropriate regulations. For example, according to the EPA’s estimates, around 180,000 adult deaths were prevented in 2010 due to the reduction in particulate matter stemming from the 1990 Clean Air Act amendments. That same year there were 86,000 fewer hospital admissions and 1.7 million fewer asthma attacks.9
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Around half were targets more than once, yet they rarely report these crimes to the police.11 By comparison, a 2008 survey by the Bureau of Justice Statistics revealed that around 13.5 percent of households were victims of property crime and 1.9 percent of individuals age twelve or over reported being victims of violent crime.12
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People also experience shame when they make an investment, purchase a product from, or interact with a person or business that has cheated them. As with victims of sexual assault and domestic violence, society teaches us to blame ourselves for being a participant, for not preventing the harm. When a parent is injured or dies as a result of fraud victimization, the whole family suffers emotionally and may slide into poverty.13
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By comparison, more than 42,000 people in America died that same year of opioid overdoses. Of those, about 40 percent were tied to prescription drugs.16 Yet the path to long-term sobriety has been rocky, even for someone with the good fortune that, paradoxically, came from the bad publicity. After learning about her overdose, a local center offered her six months’ residential treatment for free. Around two months later, she pleaded guilty to child neglect and endangerment in connection with the incident.
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But shortly after McGowan finished the drug treatment, her daughter’s father suffered a fatal overdose. So did his adult son. Overwhelmed, she relapsed with alcohol. She spent some time homeless, and then in jail. Two years after the video, she was living in a halfway house, clean and sober, accepting that she might never regain custody of her daughter.18 We can only hope the best for both of them going forward.
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To end the multigenerational cycles of abuse, addiction, and abandonment, we need free substance abuse treatment available to the millions who are regularly turned away or incapable of paying. We also need a more accessible health care system that promotes good mental health and affordably and comprehensively treats the millions of Americans in need. And most of all, we need to expose and punish the businesses and real people who have knowingly profited off—and continue to profit off—addiction.
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Like sociologist Edward Ross said, they are criminaloids. They keep their hands sweet and their boots clean, but they are as culpable as a street thug. This includes companies like Purdue Pharma and many members of the prominent Sackler family. By shining a light on this family business and others, with hindsight we can see Mandy and her daughter as victims of longtime unprosecuted and underprosecuted white collar criminality.
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By looking the other way for too long, the legal system allows the uber-wealthy to prey upon the rest of us. Then, when millions of people fall victim to their schemes, the victims are blamed and shamed. True accountability never comes if the government does too little to help. The victims of white collar crime are not empowered by our legal system in the same way that victims of violent crime are, and we need to do something about it fast.
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As a result, in theory, the risk of long-term addiction would not be a troubling side effect as these patients were not expected to live much longer. The Sacklers should have insisted that OxyContin be limited to cancer patients and for end-of-life pain relief, but Purdue’s owners had a bigger market in mind.24 Why not expand sales to all types of relatively healthy people who came to their doctors with noncancer pain complaints? Providers were encouraged to offer the drug—a controlled substance—for a whole spectrum of pain.
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Yet the company still pitched its fantastic story to a large and very receptive audience. Over nearly six years, beginning in 1996, Purdue funded more than 20,000 educational programs related to pain management. This type of forum attracts health care providers who are there to learn, but who are
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In 2000, OxyContin sales surpassed $1 billion. The Sackler business offered big incentives for top sellers. In 2001, the average salary for a sales rep was $55,000. In comparison, the bonus potential at Purdue was immense. That year, the average annual bonus was $71,500, and the highest $240,000. In 2001 alone, Purdue paid out more than $40 million in bonuses to incentivize drug sales.29
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Trips to Hawaii for the salesforce. Coupons and free trials to hook patients. This patient starter coupon program offered a free seven-to thirty-day prescription. In a single year, 34,000 coupons were redeemed nationally. Purdue could afford these incentives as every single new OxyContin patient was worth around $200,000 to the company.30
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company trained sales reps to falsely claim that “it was more difficult to extract the oxycodone from an OxyContin tablet for the purpose of intravenous use.”31 Yet Purdue’s own studies showed how easy this was to do. Often, the company pushed the pain reliever on doctors who lacked sufficient experience in either pain management or addiction.32 Talented sales staff repeated lies that it was “less addictive”33 due to its twelve-hour release formula. The
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These fabrications and more by Purdue management and employees were part of what has been described as “the most aggressive marketing campaign ever undertaken by a pharmaceutical company for a narcotic pain killer.”34 The promotion paid off. By June 2001, the company had earned nearly $3 billion on OxyContin, with this single pill at one point accounting for 90 percent of the firm’s sales.
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In 1999, approximately 8,000 deaths were caused by opioid overdoses. Of those, around 40 percent, or 3,442, were from prescription opioids. By 2007, total opioid overdose deaths numbered 18,515, with 12,796 of those from prescriptions. Apparently, greed was more powerful than empathy. And the money kept rolling in.35
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But somehow the FDA did not make it a priority to review the Purdue marketing. In 2002, the FDA had only thirty-nine staff members tasked with reviewing more than 34,000 pieces of promotional material from all businesses.38 By 2004, OxyContin was one of the most abused drugs in the United States.39
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officials want to support the spread of highly addictive drugs? Follow the money. The major opioid manufacturers and distributors were past, present, or future campaign donors. Opioid pushers and individuals associated with them “donated $8.4 million to Florida candidates and political committees between 2006 and 2012.”40
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Those bruising descriptors directed at the offenders in 2007 did not match the criminal sentences meted out to them. Violating the misbranding provision of the FD&C Act allows for a prison sentence of up to one year. Three years would be possible if the crime was done with an intent to defraud or mislead.
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And the family behind the firm was not directly touched at all. The top executives agreed to pay a total of $34.5 million in fines.44 The corporation committed to paying $600 million in a combination of forfeitures, penalties, and civil and criminal fines.
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The only people going to jail were the victims. The addicts paid the price in prison or with their lives. Surrounding communities also suffered from increased crime. One county in Virginia estimated that OxyContin “was behind 80–95% of all crimes that were committed there” in 2000.
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A window into modern-day gilded-edged family life that—surprise—made no mention of that felony plea for their pharma business or their financial links to deathly crime. Between 2008 and 2015, Purdue paid the family more than $4 billion. In mid-2019, their worth was pegged at more than $13 billion.47
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OxyContin accounted for just 2.5 billion of the 76 billion oxycodone and hydrocodone pill sales between 2006 and 2012.53 So why so much blame for the Sacklers’ company? It’s likely because Purdue started the crisis. The fact that it could not capitalize on it like their competitors is hardly something to boast about from either a moral or material perspective. By early September 2019, Purdue
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Separately, they were also negotiating a resolution of thousands of other civil cases for between $10 billion and $12 billion,54 the largest proposed Big Pharma settlement to date.55 Under the tentative settlement, Sackler family members were expected to contribute at least $3 billion over a seven-year period.56 But there would be no admission of wrongdoing. And that money would not come out of their pockets. As part of the proposed deal approved by its board of directors, Purdue would file for bankruptcy, the old firm would be dissolved, and a new one would be established to produce and sell pharmaceuticals, including OxyContin.
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We see this self-blame beyond the realm of fraud. Candice Anderson blamed herself for nearly a decade after her boyfriend died in a car crash while she was behind the wheel. But it was the auto company who was to blame and who covered up its responsibility. People who fall prey to miracle weight loss pills and plans often believe they failed or got sick due to their own lack of discipline. In fact, they are up against a $70 billion-a-year diet industry that knows these too-good-to-be-true stories sell widely but do not work, and in some cases raise the risk of heart attacks or strokes.65
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The genius of the “best” white collar schemes is to make victims partially complicit in their own victimhood. An organized-crime tactic, the more refined predators also know quite well how to do this. We saw this with the mortgage crisis of 2008. Just like the opioid crisis, it was decades
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Borrowers who were deliberately targeted for high-risk mortgages and refinancing on homes appraised at far more than their true value were later stigmatized when they could not pay. Blaming them allowed Congress to turn its back on the millions of families who lost their homes to foreclosure. When a way to bail out underwater homeowners was being debated, opponents exploited feelings of envy and blame.69
Chapter 5
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Belfort and a colleague pleaded guilty in 1999 to several counts of securities fraud and money laundering. Over a seven-year period they had manipulated the stock price of thirty-four companies and cheated investors out of hundreds of millions of dollars. As part of their plea, they agreed to forfeit $16 million to help establish a fund to partially compensate the people they bilked.9 This innovative crime-soaked era prompted the government to get creative as well.
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After the O’Hagan decision, that type of outsider trading, in which the trader misappropriates information from a source to whom he owes a duty of trust and confidence, was now unlawful.
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The
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First, the superwealthy enjoy immunity from unlawful conduct well beyond offenses committed in the workplace,
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even from violent crimes.
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Second, this immunity often extends beyond those who actually have tremendous power and connections to those who look similar or to strivers who appear to have a chance to advance into the higher echelon—in other words, young, middle-class, or affluent white males.
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Third, this implicit immunity is part of a culture and system of mutually assured immunity. From prep school and beyond, the elite cover for each other. If there’s trouble with addiction or antisocial behavior, the elite find expert help or manage to resolve these problems privately, outside the public eye, off the “official record.”
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Implicit immunity spills over into the realm of violent crime as well, including rape and other predatory behavior. Young (and old) white men get off with a “boys will be boys” defense, with no jail or very light sentences, imposed by judges who openly state that they don’t wish to destroy the bright futures11 to which these favored offenders are entitled. Or, at least it seems, many want them to achieve a “respectable” future that is more in their reach than their nonwhite counterparts.
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In 2009, after DuPont heir Robert H. Richards IV pleaded guilty to raping his three-year-old daughter, the judge sentenced him to probation and suspended his eight-year sentence. Why? Because the judge said Richards—who was six foot four and weighed over 250 pounds—would “not fare well” in prison.13
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The judge had sympathy for his defense. His lawyer claimed he was a victim of his wealthy upbringing. An expert psychologist testified that Couch suffered from “affluenza,” a condition brought about by his rich parents who’d never set proper boundaries, he argued. This “affluenza defense” seems preposterous. But it worked.14
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What made the Grubman case entertaining at first was the interlacing of two seemingly incongruous spheres—babies and banking—but in the end it was no laughing matter for the investors who lost $1.7 trillion by November 2000, when the dot-com bubble he was helping to blow up had begun to burst.27
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Around the time of Grubman’s November 1999 upgrade, Weill made a phone call to the school. Then, by early summer, he pledged $1 million of Citigroup funds to be paid in equal installments over five years to the 92nd Street Y—and voilà, both of Grubman’s twins gained admission.30
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this scheme played out as planned, everyone (but the investors relying on honest ratings) would win. Grubman would get the twins into preschool. Weill would land the
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underwriting deal and become the sole leader of Citi. And Armstrong would have willing investors wrangled by Citi for the new stock issuance in light of a treasured “buy” rating.
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Though he was touted as the preeminent telecom analyst, it turned out that Grubman was very, very bad at his job—that is, if you considered his job to be providing solid, unbiased advice on telecom stocks to potential investors and customers. If, however, you thought of his job as bringing in millions of dollars in fees to his employer and parent company, Citigroup, and secondarily lining his own pockets, he absolutely excelled.
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Investment houses received secret payments from companies they gave strong recommendations to buy. And for top executives whose companies were clients, stock underwriters offered special access to hot initial public offerings.” He continued: “The evidence that regulators made public today painted a picture up and down Wall Street of an industry rife with conflicts of interest during the height of the Internet and telecommunications bubble that burst” in 2000.43
Chapter 6
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Clearly, the way federal judges reasoned before the Sentencing Commission’s guidelines was troubling. Here’s one example. In 1976, Marvin Frankel, a federal district court judge, issued a sentencing memorandum for defendant Bernard Bergman. Bergman had been caught engaging in a $2.5 million Medicare and tax fraud involving nursing homes he operated. Though he pleaded guilty to two related charges, he never admitted to any wrongdoing as part of the plea. Together, the two laws he violated allowed for a punishment of up to eight years in prison. Yet judge Frankel issued just a four-month sentence. The prosecutor, Charles Hynes, said that this light sentence would make the public believe that there was “special justice for the privileged.”
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By offering Virginia-bought cigarettes for 50 cents each, instead of over 64 cents, they saved money, and he could in theory make $4.75 per pack. If he sold two cartons a day, that would bring in around $100. But he likely had to give a cut up front to the cigarette smugglers who’d transported the cartons north from Virginia. This
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Officer Pantaleo killed Garner, the NYPD had made 439 arrests for selling loosies.21 Some repeat sellers have earned jail time or were sentenced to community service. For Eric, the penalty was death.
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U.S. Attorney Richard Donoghue explained that in order to bring federal criminal civil rights charges against Pantaleo, the prosecutors had four elements to prove beyond a reasonable doubt. First, that he acted under color of law. This means in his official capacity. Next, “that the officer used objectively unreasonable force under the circumstances.”
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But what is “unreasonable”? Under the law, reasonableness is contextual and subjective. U.S. Attorney Donoghue said reasonableness of a particular use of force “must be judged from the perspective of a reasonable officer on the scene, rather than with the 20/20 vision of hindsight.”
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Eric Garner was running a small-time street hustle, cheating New York State and City out of a negligible amount of tax revenue. For that, he was strangled on the street and his killers went free.
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With the more than $10 billion flowing out annually in payments to existing retirees, keeping investment returns up and costs down was critical. If the investments in the fund did not perform well, New York taxpayers would suffer. Taxpayers already paid for the regular contributions made by the state and local governments into the fund.
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The government in Albany employed internal managers to watch over this golden nest egg. These employees in turn outsourced the actual investment mechanics to licensed broker-dealers.
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In March 2014, Kelley’s firm had no bond business at all with the New York retirement fund. Zero. Two years later, she was executing about $180 million a year in trades for the fund, personally earning nearly $200,000 in commissions, thanks to Kang.
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It turned out she and another broker, Gregg Schonhorn, had paid Kang more than $100,000 in secret bribes to secure bond orders with the pension fund. The joint indictment described the kickbacks Kang received. Vacations. Lavish meals. Concert tickets. A Panerai wristwatch. Access to strip clubs. Prostitutes. Crack cocaine. The federal charges against Kelley included the white collar crimes of conspiracy, securities fraud, and honest services wire fraud.
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But Kelley, an upper-middle-class white woman, was not locked up. Instead of incarceration, the kind judge sentenced her to just six months of home confinement and three years’ probation. The judge also required her to give back her ill-gotten gains, pay a $50,000 fine, and perform a thousand hours of community service.29
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The judge explained his reasoning, pointing to the numerous letters of support from family and friends: “There is no question in my mind that Ms. Kelley is a good person who has been a hugely positive force in her family and her community.”30 That was it. Really. Forgiveness.
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The way this unfolded is not surprising. Judges favor white collar defendants, considering them “more sensitive to the impact of the prison environment than are non-white collar defendants.” Judges interviewed have explained their reasoning, without any sense of irony, that prison will not provide general deterrence and will not rehabilitate white collar offenders.
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One judge wrote of a physician who committed Medicare fraud, “I didn’t want to send him to jail because I felt that it would deprive him and his family of the livelihood he could make as a doctor and it would deprive the neighborhood of his services.”32 Such empathy rarely extends to the burglar or the small-time drug dealer.
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What more dramatic evidence could there be of elite privilege in the justice system? Just around 9,000 people—less than 6 percent of the total federal prison population—are behind bars for extortion, fraud, and bribery combined.44 The disparity at the state level is even more stark.
Chapter 7
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Daniel Ellsberg. Mark Felt. Karen Silkwood. Sherron Watkins. Susan Fowler. Whistleblowers. Heroes.
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She is using her platform to fight for a ban on what’s called forced arbitration. This unfair practice makes getting a job (or purchasing a product or service) conditional on agreeing up front to private arbitration to resolve all future legal disputes. In a workplace context, this means giving up the right to bring legal claims in court, including for sexual harassment and for discrimination on the basis of race, color, age, sex, religion, and disability, for example.13 In 2018, an estimated 60 million Americans were bound by these types of mandatory arbitration provisions at work.14
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Credit Suisse and the data firm Palantir Technologies urged her to help cover up losses related to a joint venture. They allegedly asked her to persuade the auditing firm KPMG to improperly book revenues. Graham said she refused.
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in the lead-up to a special congressional election, tech millionaire and Republican candidate Gregory Gianforte body-slammed reporter Ben Jacobs at a campaign event. This did not stop voters from electing Gianforte to Congress the very next day. Less than a month later, he pleaded guilty to the misdemeanor assault, but was not sentenced to any jail time.29 Jacobs agreed not to sue the congressman in exchange for an apology and a $50,000 contribution to the Committee to Protect Journalists.
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He refused to condemn Saudi Crown Prince Mohammed bin Salman for ordering the barbaric murder and dismemberment of Washington Post columnist Jamal Khashoggi in the Saudi consulate in Istanbul, Turkey. Quite the opposite. He lavished praise on the Crown Prince instead. Khashoggi was a Virginia-based writer who had been critical of the Saudi royal family.34
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At this event, when asked about journalists, Trump said, “Get rid of them.” He added, “Fake news is a great term, isn’t it? You don’t have this problem in Russia, but we do.” Putin smiled and replied, in English, “We also have. It’s the same.”35 Russia was ranked 149 out of 180 on the Press Freedom Index. And that was before Putin signed the “fake news” law that criminalizes insulting the government online.
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As part of his propaganda, the Nazi leader railed against the Lügenpresse, or “lying press.” We have simply never before seen this level of disinformation and violent, dehumanizing threats made toward journalists and whistleblowers by a U.S. president. After Trump is gone, we will need to redouble legal efforts to protect them. This includes strengthening and expanding laws as well as prioritizing enforcement and funding.
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We therefore need to provide better funding and greater independence to public broadcasting, with a new method for funding on a regional basis so that there can be fully staffed local papers of record that can offer free access and attract readers in every major town and city throughout the nation.
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She’d published a satirical post on her “Running Commentary” blog about a candidate for prime minister of Malta—a country that does not protect the press. All it took was for one of the candidate’s supporters to file a criminal complaint against her. Upon release from jail the next morning, she immediately returned to her satirical blogging.40
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She was a strong, determined woman. No doubt she fully understood the grave risk she was taking. When her children were small, some people were angry about her reporting. One after another the family dogs were killed. The home was set afire. So she had a wall built around her property.41
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A few months before her death, she wrote a blog accusing the country’s economy minister of visiting a brothel in Germany. He sued her for defamation and got a court order to freeze her bank accounts. She was on her way to the bank to gain access to her money the day she was murdered.42 Three men have been arrested in connection with her assassination.
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The newspaper teamed up with the International Consortium of Investigative Journalists (ICIJ). Together, they gave over a hundred media organizations access to the leaked files. Journalists then scoured the files and, in April 2016, began publishing investigative pieces exposing the plumbing behind offshore tax havens where the world’s multimillionaires and billionaires hide their riches.
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However, Americans must report them on their tax returns. Many use these shell companies and related offshore bank accounts to hide assets and evade taxes. Mossack Fonseca was skilled at creating such vehicles.48
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Mossack Fonseca at one time had “more than 35 locations around the globe, and [was] one of the world’s top creators of shell companies, corporate structures that can be used to hide ownership of assets.” The volume of shell companies is astounding. This one law firm was involved with more than 200,000 offshore companies in 200 countries across the globe.
Chapter 8
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But we did know that after attending, instead of informing the public to take precautions to avoid the spread of the virus, instead of challenging the president on his ongoing public assertions minimizing the serious health and economic risks we were all facing,2 several of those senators decided to protect themselves first.
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Given the massive multitrillion-dollar government interventions, the stock market is creeping up a bit, but that is of no use to those without investments. Instead, the worrisome prospect of unemployment because of the nearly nationwide stay-at-home and nonessential business shutdown orders were on most Americans’ minds.
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Investment decisions are made by multiple third-party advisors without my or my husband’s knowledge or involvement.” She also added, “I was informed of these purchases and sales on February 16, 2020—three weeks after they were made.” Yet even if it is true that she did not direct the trades, does that matter from an ethical or legal standpoint if she merely told her broker of the dire news and then he just traded on his own? Senator Burr similarly deflected.
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To establish the crime, you would need to know if they acted “willfully.” And things get even more nuanced if we are looking at a tipper-tippee situation. The law is complex in this area, and none of these parties or their spouses have been accused of wrongdoing. However, according to news accounts, by March the Justice Department was investigating the trading by several members of Congress
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All of these charges stemmed from the governor’s accepting $175,000 in loans, gifts, and other benefits from Virginia businessman Jonnie Williams. What was in it for Williams? He was the CEO of the Virginia-based company Star Scientific, which developed and sold what he said was a nutritional supplement made from a compound found in tobacco. Through his company, Williams hoped to obtain FDA approval for this supplement, Anatabloc.
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a subsequent meeting at the Governor’s Mansion, Mrs. McDonnell admired Williams’s Rolex and mentioned that she wanted to get one for Governor McDonnell. Williams asked if Mrs. McDonnell wanted him to purchase a Rolex for the Governor, and Mrs. McDonnell responded, “Yes, that would be nice.” Williams did so, and Mrs. McDonnell later gave the Rolex to Governor McDonnell
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Their argument convinced the jury, who convicted McDonnell on the honest services fraud and Hobbs Act charges. The governor appealed the case all the way up to the U.S. Supreme Court. The legal issue before the court was whether “setting up a meeting, talking to another official, or organizing an event (or agreeing to do so)—without more” qualify as an “official act” under the federal bribery statutes. The Supreme Court said no. Nothing the governor did for Williams was an “official act.”
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The law forbade them both from paying for communications that were considered “express advocacy.” It also prohibited corporations and unions from funding “electioneering communications,” which meant “any broadcast, cable, or satellite communication” that referred to a candidate for federal office made within thirty days of a primary and sixty days of a general election.
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The Supreme Court started chipping away at this law in 2007 in Federal Election Commission v. Wisconsin Right to Life, when it held that issue ads that do not mention or identify a candidate were permissible even if they ran in those special time frames before elections.22
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politics when it decided Citizens United v. Federal Election Commission in 2010, on a 5–4 vote. Not only had the court by then determined that money was speech in the context of political campaigns, but it had already, in numerous previous decisions, affirmed that corporations had constitutional rights, including under several amendments.
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the rights under Buckley to spend unlimited amounts to influence elections, simply because they joined together as a corporation. There’s a lot wrong with this assessment. To begin, corporations are complex enterprises where all sorts of people interact, including employees, customers, and suppliers. Even if we were to define a corporation as an aggregation of owners, some corporate shareholders are not actual people but are instead big entities such as banks and other types of corporations.
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April 2014, the court struck down the aggregate limit in a 5–4 decision. As a result, McCutcheon and everyone else with millions of dollars at their disposal has a much louder voice than the rest of us—even in states where they do not reside. Effective immediately, instead of the $123,000 aggregate limit on all contributions to candidates, any individual could then give nearly $2.5 million to individual candidates in aggregate and around $1.2 million to political parties in an election cycle—in other words, nearly $4 million in direct contributions.
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And, once again, it’s not just Donald Trump, though he was the clear benefactor in the 2016 election, in his inaugural campaign funds, and perhaps now in his 2020 campaign. The focus here is just how the Supreme Court decisions, taken together, and for which Citizens United is a helpful metonymy, invited dark and dirty foreign funds and influence into our elections.
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As the Center for Responsive Politics, the nonprofit that runs the Open Secrets project, explained, “Foreign nationals are barred from contributing to federal committees. However, a foreign corporation’s U.S. subsidiary is allowed to contribute to outside spending groups such as super PACs as long as no foreign national directs the contribution.”31
Chapter 9
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because if the SEC, for example, took a case to trial, they would only need to convince the jury that the defendant most likely violated the law. But if the DOJ brought the defendant to trial in a criminal case, based on the same wrongful actions, the prosecutors would have to prove each element beyond a reasonable doubt. It’s very tough to prove beyond a reasonable doubt that a white collar defendant acted with a guilty mind. Often this means the government must prove they acted knowingly and willfully. Sometimes just willfully. But what does that mean? When it comes to convicting someone for making a false statement to a government agency, for example, the “knowingly” element means the defendant knew the statement was false. The “willfully” element means they made the statement deliberately and with the specific intent to communicate false information. However, there’s no requirement that the prosecutor prove the defendant knew about the false statement law itself4 or knew the false statement would be communicated to a federal agency.5
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A year later, the FDA conducted a twelve-day inspection of the Baltimore warehouse and found “evidence of rodent infestation and other insanitary conditions.” A few months later, there was another inspection in Baltimore, which showed some improvements but also “evidence of rodent activity in the building and in the warehouses” as well as “some rodent-contaminated lots of food items.” While the corporation pleaded
Chapter 10
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Its 2019 budget was around $2 billion lower than in 2009. Along came layoffs, with 30,000 fewer employees at the IRS by 2020.4 Fewer auditors meant fewer audits. The agency lost out on collecting at least $18 billion per year. If the goal is compliance and collecting revenue, the cuts were so very foolish.
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But that $18 billion is just what the IRS, and thus the U.S. Treasury, is losing due to budget cuts. In fact, the government is leaving so much more money on the table. There’s something called the “tax gap.” This is a calculation the IRS makes to figure
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the difference between what it should be collecting each year and what it actually brings in through tax receipts. In 2018, the tax gap was as much as $800 billion.5
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“Corporations and the wealthy are the biggest beneficiaries of the IRS’ decay.”6 Unbelievably, audits of the top earners, including those who bring in more than $5 million per year—the most cost-effective to audit—have fallen by around 80 percent. Pressure is off the wealthy. As a result, the very lowest earners—those who bring in $20,000 or less per year of personal income—are just as likely to be audited as the top 1 percent.7 But only about 3 percent of the annual tax gap is owed by these low earners.
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In January 2020, the picture was even bleaker. Incensed by the fresh IRS report revealing audit rates were their lowest in forty years,12 Senator Wyden said, “The bulk of tax avoidance and fraud comes from corporations, pass-through business and those at the top.” This was no accident. It was “by design.” The architects, he said, were Republicans, who “have been on a decade-long crusade to gut IRS enforcement.”
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Supporters also said that businesses would use the tax savings from the 2017 law to invest in employees. Again, they didn’t.21 Instead, businesses used the extra cash to buy back stock from shareholders. The first year set records of more than $1 trillion in stock buybacks. So much for promised spending.22 That put cash in the hands of the investor class—it did not help put food on the table for workers.
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The 2017 tax giveaway was expected to cost around $1.9 trillion by 2027, according to the Congressional Budget Office. Imagine if we had directed that money to where the greatest need is, not the greatest greed. We could have provided affordable childcare and pre-K to all families for a decade. But that’s not all. Child poverty would have been eliminated during that period of time.
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For the Republicans, ripping away health insurance was a feature, not a bug. This was how they could justify giving their wealthy campaign donors the tax cut they demanded. Did they even blink an eye knowing that to justify this tax cut they needed to show that 10,000 extra people would die per year? Instead of voting no to prevent these deaths, the Republicans said the government would save money because with thousands dying early year after year, less would be paid out in Social Security benefits, for example.25
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Then came the coronavirus. In March 2020, the country faced the beginning of a major recession. For the week ending March 21, 3.3 million Americans filed for unemployment benefits. That was an all-time high. The highest number of claims filed previously had been in October 1982, with 695,000 jobless claims.
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First in line for a bailout were the very corporations who, as part of the relief package, now have access to a slush fund of more than $500 billion. Many of the firms on the ropes, including the airline industry, paid back billions of dollars to shareholders through stock buybacks when times were flush.
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And even after trillions were poured in to prop up the financial markets and businesses through congressional and Federal Reserve actions, for the vast majority of Americans who depend on wages to survive, life got much worse. We reached 14.7 percent unemployment by early May—the highest it’s been since 1940.
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Things were most dire for the lowest of earners. In May, Fed chairman Jerome Powell announced that an astonishing 40 percent of people living in households earning less than $40,000 per year lost a job in March. Yet, despite this bleak picture, Congressional Republicans said they were done. No more relief packages.