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In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on November 10, 2022 at 12:12 am
This December 2 will mark the 21st anniversary of the collapse of Enron Corporation.
Based in Houston, Texas, Enron had employed 22,000 staffers and was one of the world’s leading electricity, natural gas, communications and paper companies.
In 2000, it claimed revenues of nearly $101 billion. Fortune had named Enron “America’s Most Innovative Company” for six consecutive years.
But then the truth emerged in 2001: Enron’s reported profitability was based not on brilliance and innovation but on systematic and creative accounting fraud.
And, on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code.
Enron’s $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history—until WorldCom’s bankruptcy in 2002.
The California electricity crisis (2000-2001) was caused by market manipulations and illegal shutdowns of pipelines by Texas energy companies.
The state suffered from multiple large-scale blackouts. Pacific Gas & Electric, one of the state’s largest energy companies, collapsed, and the economic fall-out greatly harmed Governor Gray Davis’ standing.
The crisis was made possible by Governor Pete Wilson, who had forced the passage of partial de-regulation legislation in 1996.
Enron seized its opportunity to inflate prices and manipulate energy output in California’s spot markets. The crisis cost the state $40 to $45 billion.
The true scandal of Enron was not that it was eventually destroyed by its own greed.
The true scandal was that its leaders were never Federally prosecuted for almost driving California—and the entire Western United States—into bankruptcy.
And it happened during the “liberal” administration of President Bill Clinton.
Once the news broke that Enron had filed for bankruptcy, commentators almost universally oozed compassion for its thousands of employees who would lose their salaries and pensions.
No one, however, condemned the “profits at any cost” dedication of those same employees for pushing California to the brink of ruin.
To put this in historical perspective:
- Imagine a historian writing about the destruction of Hitler’s Schutzstaffel (Guard Detachment), or SS, as a human interest tragedy.
- Imagine its Reichsfuhrer, Heinrich Himmler, being blamed for failing to prevent its collapse—as CEO Kenneth Lay was blamed for Enron’s demise.
- Imagine that same historian completely ignoring the horrific role the SS had played throughout Nazi-occupied countries—and its primary role in slaughtering six million Jews in the Holocaust.
Nor did the media urge the United States Department of Justice to end the extortion via RICO—the Federal Racketeer Influenced Corrupt Organizations Act.
Passed by Congress in 1970, this was originally aimed at the kingpins of the Mafia. Since the mid-1980s, however, RICO has been successfully applied against both terrorist groups and legitimate businesses engaged in criminal activity.
Under RICO, people financially injured by a pattern of criminal activity can bring a claim in State or Federal court, and obtain damages at three times the amount of their actual claim, plus reimbursement for their attorneys’ fees and costs.
Such prosecutions would have pitted energy-extortionists against the full investigative might of the FBI and the sweeping legal authority of the Justice Department.
Consider this selection from the opening of the Act:
(1) “racketeering activity” means (A) any act or threat involving…extortion; (B) any act which is indictable under any of the following provisions of title 18, United States Code: sections 891-894 (relating to extortionate credit transactions), section 1343 (relating to wire fraud)Section 1344 (relating to financial institution fraud), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering)….
Today, two powerful social media companies—Facebook and Twitter—play pivotal and potentially dangerous roles in the lives of millions of men, women and children.
Facebook has invaded its users’ privacy (such as via the Cambridge Analytica data scandal), manipulated elections (such as the 2016 Presidential one) and subjected its users to mass surveillance.
Twitter has allowed trolls to abuse its followers and spread dangerous lies to millions. For five years, its chief troll was Donald Trump, who libeled hundreds while falsely claiming that COVID-19 was a hoax and that he won re-election in 2020 but was cheated by fraud.
Such lies resulted in the deaths of tens of thousands of Americans from COVID—and poisoned the American electoral system for future races.
Yet in both cases, the Federal Government has stood by and allowed such abuses to continue unpunished. Yet it commands a wide range of agencies capable of addressing such abuses—such as the Federal Trade Commission, the Federal Communications Commission and—not least importantly, the Justice Department.
Powerful, life-altering companies require powerful oversight—through the prism of the warning given by Niccolo Machiavelli more than 500 years ago:
All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.
If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.
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In Bureaucracy, Business, History, Law, Law Enforcement, Medical, Politics, Social commentary on January 13, 2022 at 12:15 am
Mylan Pharmaceuticals CEO Heather Manchin-Bresch is on a roll.
- The daughter of United States Senator Joe Manchin (R-West Virginia), she has, since 2004, hiked the price of a life-saving EpiPen from $50 to $600 to $700 for a package of two.
- Her own salary has steadily risen more than 600% to $18,509,300 a year.
- The device now accounts for 40% of Mylan’s profits.
But in playing greed-based games with the lives of millions of Americans, Manchin-Bresch, 52, may have put her company—and even herself—in jeopardy.
Heather Manchin-Bresch
EpiPens have been mandatory for public schools in at least 11 states since Congress passed the 2013 School Access to Emergency Epinephrine Act. This occurred after Mylan spent $4 million lobbying Congress.
When the lives of their children are threatened, adults who can stoically accept the inevitability of their own deaths can become dangerously emotional about the fates of their sons or daughters.
As national news media spread the word of Mylan’s unconscionable price increases, American consumers are making their rage increasingly known.
There are three ways this could be expressed: Political, Legal, and Illegal.
Political: Minnesota U.S. Senator Amy Klobuchar has called for an official investigation by the Senate Judiciary Committee and the Federal Trade Commission (FTC) into the price hikes:
Senator Amy Klobuchar
“I write to request the Federal Trade Commission investigate whether Mylan Pharmaceuticals has violated the antitrust laws regarding the sale of its epinephrine auto-injector, EpiPen. Many Americans, including my own daughter, rely on this life-saving product to treat severe allergic reactions.
“Although the antitrust laws do not prohibit price gouging, regardless of how unseemly it may be, they do prohibit the use of unreasonable restraints of trade to facilitate or protect a price increase.”
Other Senators who have called for hearings include Iowa’s Charles Grassley, Connecticut’s Richard Blumenthal and former Democratic presidential contender Vermont Senator Bernie Sanders.
“I have heard from one father in Iowa who recently purchased a refill of his daughter’s EpiPen prescription. He reported that to fill the prescription, he had to pay over $500 for one EpiPen,” wrote Grassley to Manchin-Bresch. “The high cost has also caused some first responders to consider making their own kits with epinephrine vials and syringes.”
Senator Charles Grassley
“There’s no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600,” tweeted Sanders on Twitter.
A second expression of political fallout could ultimately be the adoption of a single-payer healthcare system. Under this, a “single-payer” fund, rather than private insurers, pays for healthcare costs. The healthcare delivery system can be private, public or a combination of the two.
Legal: Individual Americans—and/or the U.S. Department of Justice—could file civil lawsuits against Mylan Pharmaceuticals under the Racketeer Influenced Corrupt Organizations (RICO) Act.
Passed by Congress in 1970 to combat the Mafia, its provisions include punishments for extortion. This is defined as “a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion.” 
It could be argued that, by holding a near-monopoly over a product that millions of Americans depend on for survival, and raising its price beyond the ability of most Americans to afford it, Mylan has engaged in extortionate practices.
It would not be the first time a David-vs.-Goliath lawsuit prevailed against dismal expectations.
In 1994, amid great pessimism, Mississippi Attorney General Mike Moore filed a lawsuit against the tobacco industry. But other states soon followed, ultimately growing to 46.
Their goal: To seek monetary, equitable and injunctive relief under various consumer-protection and anti-trust laws.
The theory underlying these lawsuits: Cigarettes produced by the tobacco industry created health problems among the population, which badly strained the states’ public healthcare systems.
In 1998, the states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related, health-care costs—amounting to millions of dollars. In return, they exempted the companies from private lawsuits for tobacco-related injuries.
Illegal: At one time, business titans like John D. Rockefeller and Henry Ford lived apart from “the common herd.” Americans read about them in newspapers or heard about them on the radio, but had no way of contacting them directly.
If you wanted to “dig up dirt” on any of them, you had to be wealthy enough to hire private detectives–who were probably employed by the same people you wanted to investigate.
But the rise of the Internet—and especially the advent of “people-finder” websites like Instant Checkmate, Intellius and Veromi—has drastically changed all that.
Type “Heather Manchin-Bresch” into the Intellius “Confidential People Finder” subject line, and—for a $20 month’s subscription—you can obtain “some or all of the following”:
- Full Name
- Age and Date of Birth
- Address
- Address History
- Phone Numbers
- Aliases
- Relatives
- Neighbors
- Email Address(es)
- Social Networks
- Property Records
- Marriages & Divorces
- Criminal Records
- Bankruptcies
- Liens
- Judgments
- Lawsuits
It doesn’t take a genius to see how the parent of an allergy-suffering child—desperate to save his son or daughter and enraged at what he believes to be the extortionately high price of EpiPens—might put such information to use.
What is truly astonishing is that, in our publicity-saturated culture, greedy, self-destructive “celebrities” like Heather Manchin-Bresch don’t realize this.
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In Bureaucracy, Business, History, Law, Law Enforcement, Medical, Politics, Social commentary on January 12, 2022 at 12:12 am
More than 500 years ago, Niccolo Machiavelli, the father of modern politics, delivered this sage advice in his political masterwork, The Discourses:
All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.
If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.
Niccolo Machiavelli
Unfortunately, it’s advice that members of the United States Congress have blissfully chosen to ignore. By doing so, they have condemned millions of Americans to suffering and death at the hands of greed-based, predatory corporations.
One of these corporations is Mylan Pharmaceuticals.
In 2007, Mylan acquired the patent for the EpiPen, a lifesaving device for anyone allergic to common foods like peanuts, shellfish and eggs. Millions of people with life-threatening allergies depend on the EpiPen for survival.
During an allergy attack, the EpiPen injects an emergency dosage of epinephrine to the user, preventing a possibly fatal reaction, known as anaphylaxis, from occurring.
Between 2007 and 2015, the wholesale price of an EpiPen skyrocketed from $56.64 to $300 to $645 for an EpiPen 2-Pak—an increase of 461%.
It costs about $8 to make such a pack.
According to NBC News, compensation for Mylan CEO Heather Bresch similarly skyrocketed during the same period: From $2,453,456 in 2007 to $18,931,068 in 2015—a 671% raise in eight years.
Bresch is the daughter of West Virginia United States Senator Joe Manchin—who recently killed the chance for passage of President Joe Biden’s “Build Back Better” bill. Among its benefits:
- Universal preschool
- Free community college
- Lower prescription drug costs
- Expanded Medicare and Medicaid services
- Requiring utility companies to phase in renewable energy to replace fossil fuels.
Manchin—who owns a yacht and drives a Maserati—suggested that parents would use Child Tax Credits to buy drugs.
Manchin-Bresch wasn’t the only one to profit at the expense of the most vulnerable.
Between 2007 and 2015, Mylan’s stock price tripled, going from $13.29 per share in 2007 to a high of $47.59 in 2016. By late August, 2016, Mylan’s stock was hovering around $45.68 per share on the NASDAQ index.
Bloomberg states that the EpiPen now accounts for about 40% of Mylan’s profits.
Ironically, Sheldon Kaplan, the man who invented the now-famous device, never made a dime off it, and died in obscurity.
After working at NASA, Kaplan worked for Survival Technology, Inc., in Bethesda, Maryland.
In 1973, the Defense Department asked him to design a device that could quickly inject an antidote for nerve gas.
Kaplan’s design perfectly fitted this need: When a victim plunged a needle into his thigh, a spring-loaded mechanism shot a needle containing life-saving medicine into his bloodstream.
Kaplan’s invention became known as the ComboPen, and was initially used by the Pentagon before becoming available for use by the general public several years later as the EpiPen.
Kaplan left Survival Technology shortly after creating the ComboPen to become a biochemical engineer. He didn’t follow the success of his invention—and didn’t reap any of the huge financial rewards that it has produced.
That has certainly not been true for Mylan Pharmaceuticals.
After cornering the patent on the EpiPen in 2007, the company has made billions on the life-saving device.
According to Bloomberg, a package of two EpiPens costs $415 in the United States after insurance discounts. The same package in France–which has price controls under socialized medicine–costs $85.
The chief beneficiary of this legalized price-gouging has been Mylan’s CEO, Heather Manchini-Bresch.
Heather Manchin-Bresch
She joined Mylan in 1992 and held various positions within the company. Among these: Its chief lobbyist before Congress.
It was in that capacity that she persuaded Congress to enact a bill requiring all public schools to carry EpiPens for students with food allergies. It was signed into law by President Barack Obama in November, 2013.
Over the next three years, schools nationwide bought EpiPens by the truckload. And Mylan jacked up its prices for the EpiPen every other quarter.
On January 1, 2012, Heather Manchin-Bresch became Mylan’s CEO.
But it wasn’t enough to have a monopoly on a device millions of men, women and children desperately needed. In 2014, true to its “profits-at-any-price” philosophy, Mylan reincorporated in the Netherlands to lower its effective tax rate.
It did so through a corporate accounting trick known as a tax inversion, and thus claiming the status of a foreign-owned corporation although its headquarters remained in Canonsburg, Pennsylvania.
Even her own father, U..S. Senator Joseph Manchin, condemned Mylan’s use of the inversion scheme and said it should be illegal.
But Manchin-Bresch fiercely defended it in an interview with the New York Times: “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.”
No doubt, with her CEO salary of $18,509,300 a year and moneyed ties to high-powered attorneys and influential members of Congress, Bresch thinks herself invulnerable.
But all that could quickly change—if even a small number of her victims become angry enough.
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In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on August 2, 2019 at 12:43 am
On July 15, 2015, Ashley Madison joined the list of companies that failed to safeguard their customers’ most sensitive information—such as their credit card numbers, addresses, emails and phone numbers.
And Ashley Madison had more reason than most to do this—as the notorious website for cheating wives and husbands.
After all, its database is a blackmailer’s dream-come-true. Yet apparently its owners didn’t care enough about the privacy of their customers to provide adequate security.
Like so many other companies hit by hackers, Ashley Madison sought to reassure its dangerously compromised customers:
“At this time, we have been able to secure our sites, and close the unauthorized access points. We are working with law enforcement agencies, which are investigating this criminal act.”
This statement gave new meaning to the phrase, “Closing the barn door after the cow has gotten out.”
Avid Life Media assured its customers that it had hired “one of the world’s top IT security teams” to work on the breach.
So why wasn’t this “top IT security team” hired at the outset?
On August 18, 2015, the hackers began releasing their pirated information.
Ashley Madison’s customers chose to put their private information on its computer system.
Those of Equifax, didn’t. Equifax collected this from credit card companies.
From Mid-May through July, 2017, Equifax was hacked. The breach was discovered on July 29.
But the company didn’t announce it until September 7, 2017.
As a result, the private data of nearly 150 million people was compromised.
On July 22, 2019, the Federal Trade Commission (FTC) announced that Equifax, one of the nation’s largest credit-reporting companies, would pay up to $700 million to settle with the FTC and consumers.
If approved by the federal district court Northern District of Georgia, the settlement will provide up to $425 million in monetary relief to consumers and a $100 million civil money penalty.
According to Karl A. Racine, attorney general for Washington, D.C., it’s the largest settlement ever for a data breach.
“Equifax failed to protect consumers’ information and failed to enact reasonable security measures under California’s data security laws,” California Attorney General Xavier Becerra said in a news conference.
“That left very important personal information exposed and allowed hackers to steal consumers’ names, Social Security numbers, their birth dates, their addresses and in some instances their driver’s license number and even credit related information.”![]()
And for those who believe the private sector is inherently more efficient than the public one: On the week that Equifax agreed to pay $700 million for its massive 2017 data breach, Richard Smith, its disgraced former CEO, got some wonderful news:
- He was slated to receive as much as $19.6 million in stock bonuses since leaving the company.
- That’s roughly 1,000 times the $20,000 maximum payout that any financially damaged consumer can collect from Equifax.
- In addition, Equifax agreed to cover Smith’s medical bills for life, a benefit the company estimates is worth another $103,500.
- Equifax decided he deserved a $24 million pension.
- Smith got $50,000 in tax and financial planning services.
- His stock bonuses cover a period that includes the former executive’s performance in 2017.
When CBS News contacted Equifax on this development, the company refused to comment. Neither could Smith be reached.
There is a reason why these security breaches keep happening.
An October 22, 2014 “commentary” published in Forbes magazine raised the highly disturbing question: “Cybersecurity: Does Corporate America Really Care?”
And the answer is clearly: No.
Its author was John Hering, co-founder and executive director of Lookout, which bills itself as “the world leader in mobile security for consumers and enterprises alike.”
Click here: Cybersecurity: Does corporate America really care?
“One thing is clear,” wrote Hering. “CEOs need to put security on their strategic agendas alongside revenue growth and other issues given priority in boardrooms.”
Hering warned that “CEOs don’t seem to be making security a priority.” And he offered several reasons for this:
- The sheer number of data compromises.
- Relatively little consumer outcry.
- Almost no impact on the companies’ standing on Wall Street.
- Executives may consider such breaches part of the cost of doing business.
“There’s a short-term mindset and denial of convenience in board rooms,” wrote Hering.
“Top executives don’t realize their systems are vulnerable and don’t understand the risks. Sales figures and new products are top of mind; shoring up IT systems aren’t.”
There are three ways corporations can be forced to start behaving responsibly on this issue.
- Smart attorneys need to start filing class-action lawsuits against companies that refuse to take steps to protect their customers’ private information. There is a name for such behavior: Criminal negligence. And there are laws carrying serious penalties for it.
- There must be Federal legislation to ensure that multi-million-dollar fines are levied against such companies—and especially their CEOs—when such data breaches occur.
- The Justice Department should vigorously prosecute CEOs whose companies’ criminal negligence leads to such massive data breaches. They should be considered as accessories to crime, and, if convicted, sentenced to lengthy prison terms.
Only then will the CEO mindset of “We don’t care, we don’t have to” be replaced with: “We care, because we’ll lose our money and/or freedom if we don’t.”
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In Bureaucracy, Business, History, Law, Law Enforcement, Politics, Social commentary on August 1, 2019 at 12:08 am
Comedian Lily Tomlin rose to fame on the 1960s comedy hit, Rowan & Martin’s Laugh-In, as Ernestine, the rude, sarcastic switchboard operator for Ma Bell.
She would tap into customers’ calls, interrupt them, make snide remarks about their personal lives. And her victims included celebrities as much as run-of-the-mill customers.
Lily Tomlin as Ernestine
She introduced herself as working for “the phone company, serving everyone from presidents and kings to the scum of the earth.”
But perhaps the line for which her character is best remembered was: “We don’t care. We don’t have to. We’re the phone company.”
Watching Ernestine on Laugh-In was a blast for millions of TV viewers. But facing such corporate arrogance in real-life is no laughing matter.
Clearly, too many companies take the same attitude as Ernestine: “We don’t care. We don’t have to.”
This is especially true for companies that are supposed to safeguard their customers’ most sensitive information—such as their credit card numbers, addresses, emails and phone numbers.
Among those companies hacked:
- Kmart
- Staples
- Dairy Queen
- Target
- Sony Pictures
- Primera Blue Cross
- Home Depot
- JPMorgan/Chase
In 2015, they were joined by health insurance giant Anthem Inc. The company announced that hackers had breached its computer system and accessed the medical records of tens of millions of its customers and employees.
Anthem, the nation’s second-largest health insurer, said the infiltrated database held records on up to 80 million people.
Among the customers’ information accessed:
- Names
- Birthdates
- Social Security numbers
- Member ID numbers
- Addresses
- Phone numbers
- Email addresses
- Employment information
Some of the customer data may have included details on their income.
Click here: Anthem hack exposes data on 80 million; experts warn of identity theft – LA Times
Bad as that news was, worse was to come.
A February 5, 2015 story by the Wall Street Journal revealed that Anthem stored the Social Security numbers of 80 million customers without encrypting them.
The company believed that hackers used a stolen employee password to access the database
Anthem’s alleged reason for refusing to encrypt such sensitive data: Doing so would have made it harder for the company’s employees to track health care trends or share data with state and Federal health providers.
Anthem spokeswoman Kristin Binns blamed the data breach on employers and government agencies who “require us to maintain a member’s Social Security number in our systems so that their systems can uniquely identify their members.”
She said that Anthem encrypted personal data when it moves in or out of its database–-but not where it is stored.
This is a commonplace practice in the healthcare industry.
The FBI launched an investigation into the hack.
According to an anonymous source, the hackers used malware that has been used almost exclusively by Chinese cyberspies.
Naturally, China denied any wrongdoing.
Chinese Foreign Ministry spokesman Hong Lei said: “We maintain a cooperative, open and secure cyberspace, and we hope that countries around the world will make concerted efforts to that end.”
He also said that the charge that the hackers were Chinese was “groundless.”
On July 15, 2015, Ashley Madison—the notorious website for cheating wives and husbands—joined this list.
Launched in 2001, its catchy slogan is: “Life is short. Have an affair.”
One of its ads featured a photo of a woman apparently kneeling at the feet of a bare-chested man, her hand passionately clawing at his belt. Next to her was the caption: “Join FREE & change your life today. Guaranteed!”
Millions of its clients suddenly found their lives changed in ways they never imagined—for the worse.
Ashley Madison claimed to have more than 37 million members.
Its hackers were enraged at the company’s refusal to fully delete users’ profiles unless it received a $19 fee.
Referring to themselves as “The Impact Team,” they stated in an online manifesto: “Full Delete netted [Avid Life Media, the parent company of Ashley Madison] $1.7 million in revenue in 2014. It’s also a complete lie.
“Users almost always pay with credit card; their purchase details are not removed as promised, and include real names and address, which is of course the most important information the users want removed.”
On July 20, 2015, Avid Life Media defended the service, and promised to make it free.
The hackers demanded: “AM [Ashley Madison] AND EM [Established Men] MUST SHUT DOWN IMMEDIATELY PERMANENTLY.
“We have taken over all systems in your entire office and production domains, all customer information databases, source code repositories, financial records, emails.
“Shutting down AM and EM will cost you, but non-compliance will cost you more.”
The hackers threatened to “release all customer records, including profiles with all the customers’ secret sexual fantasies and matching credit card transactions, real names and addresses, and employee documents and emails.”
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In Bureaucracy, Business, History, Law, Law Enforcement, Medical, Politics, Social commentary on August 30, 2016 at 12:25 am
Mylan Pharmaceuticals CEO Heather Bresch is on a roll.
- Since 2004, she has hiked the price of a life-saving EpiPen from $50 to $300–or $600 for a package of two.
- She has seen her own salary steadily rise more than 600% to a current total of $18 million a year.
- The device now accounts for 40% of Mylan’s profits.
But in playing greed-based games with the lives of millions of Americans, Bresch, 47, may have put her company–and even herself–in jeopardy.
Heather Bresch
EpiPens have been mandatory for public schools in at least 11 states since Congress passed the 2013 School Access to Emergency Epinephrine Act. This occurred after Mylan spent $4 million lobbying Congress.
When the lives of their children are threatened, adults who can stoically accept the inevitability of their own deaths can become dangerously emotional about the fates of their sons or daughters.
As national news media spread the word of Mylan’s unconscionable price increases, American consumers are making their rage increasingly known.
There are three ways this could be expressed: Political, Legal, and Illegal.
Political: Minnesota U.S. Senator Amy Klobuchar has called for an official investigation by the Senate Judiciary Committee and the Federal Trade Commission (FTC) into the price hike:
Senator Amy Klobuchar
“I write to request the Federal Trade Commission investigate whether Mylan Pharmaceuticals has violated the antitrust laws regarding the sale of its epinephrine auto-injector, EpiPen. Many Americans, including my own daughter, rely on this life-saving product to treat severe allergic reactions.
“Although the antitrust laws do not prohibit price gouging, regardless of how unseemly it may be, they do prohibit the use of unreasonable restraints of trade to facilitate or protect a price increase.”
Other Senators who have called for hearings include Iowa’s Charles Grassley, Connecticut’s Richard Blumenthal and former Democratic presidential contender Vermont Senator Bernie Sanders.
“I have heard from one father in Iowa who recently purchased a refill of his daughter’s EpiPen prescription. He reported that to fill the prescription, he had to pay over $500 for one EpiPen,” wrote Grassley to Bresch. “The high cost has also caused some first responders to consider making their own kits with epinephrine vials and syringes.”
Senator Charles Grassley
“There’s no reason an EpiPen, which costs Mylan just a few dollars to make, should cost families more than $600,” tweeted Sanders on Twitter.
A second expression of political fallout could ultimately be the adoption of a single-payer healthcare system. Under this, a “single-payer” fund, rather than private insurers, pays for healthcare costs. The healthcare delivery system can be private, public or a combination of the two.
Owing to the belief of millions of Right-wing Americans that such a system is “Communistic,” this is unlikely to be adopted within the foreseeable future.
Legal: Individual Americans–and/or the U.S. Department of Justice–could file civil lawsuits against Mylan Pharmaceuticals under the Racketeer Influenced Corrupt Organizations (RICO) Act.
Passed by Congress in 1970 to combat the Mafia, its provisions include punishments for extortion. This is defined as “a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person(s), entity, or institution, through coercion.”
It could be argued that, by holding a near-monopoly over a product that millions of Americans depend on for survival, and raising its price beyond the ability of most Americans to afford it, Mylan has engaged in extortionate practices.
It would not be the first time a David-vs.-Goliath lawsuit prevailed against dismal expectations.
In 1994, amid great pessimism, Mississippi Attorney General Mike Moore filed a lawsuit against the tobacco industry. But other states soon followed, ultimately growing to 46.
Their goal: To seek monetary, equitable and injunctive relief under various consumer-protection and anti-trust laws.
The theory underlying these lawsuits: Cigarettes produced by the tobacco industry created health problems among the population, which badly strained the states’ public healthcare systems.
In 1998, the states settled their Medicaid lawsuits against the tobacco industry for recovery of their tobacco-related, health-care costs–amounting to millions of dollars. In return, they exempted the companies from private lawsuits for tobacco-related injuries.
Illegal: At one time, business titans like John D. Rockefeller and Henry Ford lived apart from “the common herd.” Americans read about them in newspapers or heard about them on the radio, but had no way of contacting them directly.
If you wanted to “dig up dirt” on any of them, you had to be wealthy enough to hire private detectives–who were probably employed by the same people you wanted to investigate.
But the rise of the Internet–and especially the advent of “people-finder” websites like Instant Checkmate, Intellius and Veromi–has drastically changed all that.
Type “Heather Bresch” into the Intellius “Confidential People Finder” subject line, and–for a $20 month’s subscription–you can obtain “some or all of the following”:
- Full Name
- Age and Date of Birth
- Address
- Address History
- Phone Numbers
- Aliases
- Relatives
- Neighbors
- Email Address(es)
- Social Networks
- Property Records
- Marriages & Divorce
- Criminal Records
- Bankruptcies
- Liens
- Judgments
- Lawsuits
It doesn’t take a genius to see how the parent of an allergy-suffering child–desperate to save his son or daughter and enraged at what he believes to be the extortionately high price of EpiPens–might put such information to use.
What is truly astonishing is that, in our publicity-saturated culture, greedy, self-destructive “celebrities” like Heather Bresch don’t realize this.
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In Bureaucracy, Business, History, Law, Law Enforcement, Medical, Politics, Social commentary on August 29, 2016 at 1:04 am
More than 500 years ago, Niccolo Machiavelli, the father of modern politics, delivered this sage advice in his political masterwork, The Discourses:
All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.
If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.
Niccolo Machiavelli
Unfortunately, it’s advice that members of the United States Congress have blissfully chosen to ignore. And, in doing so, they have condemned millions of Americans to suffering and death at the hands of greed-based, predatory corporations.
One of these corporations is Mylan Pharmaceuticals.
In 2007, Mylan acquired the patent for the EpiPen, a lifesaving device for anyone allergic to common foods like peanuts, shellfish and eggs. Millions of people with life-threatening allergies depend on the EpiPen for survival.
During an allergy attack, the EpiPen injects an emergency dosage of epinephrine to the user, preventing a possibly fatal reaction, known as anaphylaxis, from occurring.
Between 2007 and 2015, the wholesale price of an EpiPen skyrocketed from $56.64 to $317.82–an increase of 461%.
According to NBC News, compensation for Mylan CEO Heather Bresch similarly skyrocketed during the same period: From $2,453,456 in 2007 to $18,931,068 in 2015–a 671% raise in eight years.
Bresch wasn’t the only one to profit at the expense of the most vulnerable.
Mylan’s president, Rajiv Malik, got an 11% pay increase to $1 million annually by 2015. And Mylan Chief Commercial Officer Anthony Mauro got a 13.6% raise, amounting to $625,000 per year.
Between 2007 and 2015, Mylan’s stock price tripled, going from $13.29 per share in 2007 to a high of $47.59 in 2016. By late August, 2016, Mylan’s stock is hovering around $45.68 per share on the NASDAQ index.
Bloomberg states that the EpiPen now accounts for about 40% of Mylan’s profits.
Ironically, Sheldon Kaplan, the man who invented the now-famous device, never made a dime off it, and died in obscurity.
After working at NASA, Kaplan worked for Survival Technology, Inc., in Bethesda, Maryland. His assignment: Create a device to quickly inject a victim of anaphylaxis–a potentially fatal allergic reaction–with an emergency dose of epinephrine.
In 1973, when Kaplan was finalizing the design concept for what would ultimately become the EpiPen, the Defense Department asked him to take on a new assignment. The military needed a device that could quickly inject an antidote for nerve gas.
Kaplan’s design perfectly fitted this need: When a victim plunged a needle into his thigh, a spring-loaded mechanism shot a needle containing life-saving medicine into his bloodstream.
Kaplan’s invention became known as the ComboPen, and was initially used by the Pentagon before becoming available for use by the general public several years later as the EpiPen.
Kaplan left Survival Technology shortly after creating the ComboPen to become a biochemical engineer. He didn’t follow the success of his invention–and didn’t reap any of the huge financial rewards that it has produced.
That has certainly not been true for Mylan Pharmaceuticals.
After cornering the patent on the EpiPen in 2007, the company has made billions on the life-saving device.
According to Bloomberg, a package of two EpiPens costs $415 in the United States after insurance discounts. The same package in France–which has price controls under socialized medicine–costs $85.
The chief beneficiary of this legalized price-gouging has been Mylan’s CEO, Heather Bresch.
Heather Bresch
The daughter of U..S. Senator Joseph Manchin (D-WV), she joined Mylan in 1992 and held various positions within the company. Among these: Its chief lobbyist before Congress.
It was in that capacity that she persuaded Congress to enact a bill requiring all public schools to carry EpiPens for students with food allergies. It was signed into law by President Barack Obama in November, 2013.
Over the next three years, schools nationwide bought EpiPens by the truckload. And Mylan jacked up its prices for the EpiPen every other quarter.
On January 1, 2012, Heather Bresch became Mylan’s CEO.
But it wasn’t enough to have a monopoly on a device millions of men, women and children desperately needed. In 2014, true to its “profits-at-any-price” philosophy, Mylan reincorporated in the Netherlands to lower its effective tax rate.
It did so through a corporate accounting trick known as a tax inversion, and thus claiming the status of a foreign-owned corporation although its headquarters remained in Canonsburg, Pennsylvania.
Even her own father, U..S. Senator Joseph Manchin, condemned Mylan’s use of the inversion scheme and said it should be illegal.
But Bresch fiercely defended it in an interview with the New York Times: “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.”
No doubt, with her $18 million-a-year CEO salary and moneyed ties to high-powered attorneys and influential members of Congress, Bresch thinks herself invulnerable.
But all that could quickly change–if even a small number of her victims become angry enough.
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In Bureaucracy, Business, Law, Self-Help, Social commentary on April 21, 2015 at 12:43 am
Ralph bought a computer security program from SUX. But then he found he couldn’t download it.
So he contacted the company—whose customer service representative told him: You’ll have to buy another of our products to make the first one you bought work properly.
At that point, Ralph had had enough.
He sent SUX an email via its own website, outlining his problem and asking that the $60 charge on his credit card be removed.
Six days later, Ralph called his credit card company, to see if SUX was still charging him for an item he hadn’t received.
It was.
It was time to play Machiavellian hardball.
Ralph once again dialed SUX to speak to one of its customer service reps.
Calmly–but firmly–Ralph identified himself, then quickly summarized the problem he was having with the company.
Then he said:
“I suggest you contact someone in management and tell them this: I want this charge off my credit card in 24 hours. If it isn’t, here’s what’s going to happen:
“One: I’m going to file a criminal complaint with the local office of the United States Attorney [Federal prosecutor] for fraud against your company.
“When a company does business in more than one state, that brings it under Federal jurisdiction. And there are Federal penalties for charging people for products they didn’t receive.
“Two, I’m going to make this situation very well known on social media sites. That’s going to cost you bigtime on future customers.
“Again, I’ll wait 24 hours. Pass this on to your management.”
Then he hung up.
Slightly more than 24 hours later, Ralph got this email from SUX:
“Thank you for ordering from SUX. At your request a return has been initiated.”
In short: The charge would be removed from his credit card.
There are several important lessons to be learned here.
First, before you call to complain, make sure the product isn’t working.
Read the instructions carefully and follow them to the letter.
If you can’t understand the instructions, or if you feel you do and the product still isn’t doing what it’s supposed to do, call the company.
Second, when you reach the customer service rep, be patient and polite.
At best, getting angry and offensive wastes valuable time which could be better spent outlining the problem you’re having.
At worst, the tech might hang up on you, which means you’ll have to go through the whole telephone-tree exercise again.
Third, explain precisely what has gone wrong. If the tech gives you instructions on how to resolve the problem, follow them to the letter.
Fourth, if you’re sure you want to return the product, say so.
Find out the company’s preferred way to do this.
Fifth, if you’ve paid for it by credit card, state that you want the charge removed from your bill.
You may have to wait until the company receives the product before they take the charge off your bill. To make sure they get it, send it signed-receipt-requested.
Sixth, wait five to ten days to see if your credit card has been charged.
Ralph waited six, which is a reasonable number.
Seventh, if the problem hasn’t been resolved, call the company again and ask to speak to someone on its corporate headquarters—the higher up, the better.
You can often find out the names of the top executives of a company by checking its website. Or by going to a business-rating website, such as that of Standard and Poor’s.
Eighth, be polite but businesslike as you outline your problem.
If you can’t outline it in one or two minutes, ask for an email address where you can send a detailed email.
Ninth, state clearly what you want the company to do for you.
Often, people get so angry at the frustration they’ve endured that they forget to say what action they want the company to take.
Tenth, if the company rep makes it clear they won’t take back the product, give you a substitute, or refund your purchase, it’s time to play hardball.
Eleventh, if you believe the law has been broken, say so.
And say which agencies you intend to contact—such as the local District Attorney’s Office, Federal Trade Commission, United States Attorney or Federal Communications Commission.
Twelth, have at least one or two consumer complaint websites ready to cite—and contact.
A
Among these:
Businesses fear bad consumer reviews–especially on Yelp! and Facebook.
When I once visited a local animal shelter, a receptionist told me: “If you have a problem with something, please see me. Don’t go home and post it on Yelp!“
Thirteenth, tell the company official what action you intend to take unless your demands are met.
Offer a deadline by when you expect that action to be taken.
Fourteenth, if that doesn’t prove enough, consider filing a private lawsuit.
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DE-REGULATION: LET CRIMINALS BE CRIMINALS
In Bureaucracy, History, Law, Law Enforcement, Politics, Social commentary on November 10, 2022 at 12:12 amThis December 2 will mark the 21st anniversary of the collapse of Enron Corporation.
Based in Houston, Texas, Enron had employed 22,000 staffers and was one of the world’s leading electricity, natural gas, communications and paper companies.
In 2000, it claimed revenues of nearly $101 billion. Fortune had named Enron “America’s Most Innovative Company” for six consecutive years.
But then the truth emerged in 2001: Enron’s reported profitability was based not on brilliance and innovation but on systematic and creative accounting fraud.
And, on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code.
Enron’s $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history—until WorldCom’s bankruptcy in 2002.
The California electricity crisis (2000-2001) was caused by market manipulations and illegal shutdowns of pipelines by Texas energy companies.
The state suffered from multiple large-scale blackouts. Pacific Gas & Electric, one of the state’s largest energy companies, collapsed, and the economic fall-out greatly harmed Governor Gray Davis’ standing.
The crisis was made possible by Governor Pete Wilson, who had forced the passage of partial de-regulation legislation in 1996.
Enron seized its opportunity to inflate prices and manipulate energy output in California’s spot markets. The crisis cost the state $40 to $45 billion.
The true scandal of Enron was not that it was eventually destroyed by its own greed.
The true scandal was that its leaders were never Federally prosecuted for almost driving California—and the entire Western United States—into bankruptcy.
And it happened during the “liberal” administration of President Bill Clinton.
Once the news broke that Enron had filed for bankruptcy, commentators almost universally oozed compassion for its thousands of employees who would lose their salaries and pensions.
No one, however, condemned the “profits at any cost” dedication of those same employees for pushing California to the brink of ruin.
To put this in historical perspective:
Nor did the media urge the United States Department of Justice to end the extortion via RICO—the Federal Racketeer Influenced Corrupt Organizations Act.
Passed by Congress in 1970, this was originally aimed at the kingpins of the Mafia. Since the mid-1980s, however, RICO has been successfully applied against both terrorist groups and legitimate businesses engaged in criminal activity.
Under RICO, people financially injured by a pattern of criminal activity can bring a claim in State or Federal court, and obtain damages at three times the amount of their actual claim, plus reimbursement for their attorneys’ fees and costs.
Such prosecutions would have pitted energy-extortionists against the full investigative might of the FBI and the sweeping legal authority of the Justice Department.
Consider this selection from the opening of the Act:
(1) “racketeering activity” means (A) any act or threat involving…extortion; (B) any act which is indictable under any of the following provisions of title 18, United States Code: sections 891-894 (relating to extortionate credit transactions), section 1343 (relating to wire fraud)Section 1344 (relating to financial institution fraud), section 1951 (relating to interference with commerce, robbery, or extortion), section 1952 (relating to racketeering)….
Today, two powerful social media companies—Facebook and Twitter—play pivotal and potentially dangerous roles in the lives of millions of men, women and children.
Facebook has invaded its users’ privacy (such as via the Cambridge Analytica data scandal), manipulated elections (such as the 2016 Presidential one) and subjected its users to mass surveillance.
Twitter has allowed trolls to abuse its followers and spread dangerous lies to millions. For five years, its chief troll was Donald Trump, who libeled hundreds while falsely claiming that COVID-19 was a hoax and that he won re-election in 2020 but was cheated by fraud.
Such lies resulted in the deaths of tens of thousands of Americans from COVID—and poisoned the American electoral system for future races.
Yet in both cases, the Federal Government has stood by and allowed such abuses to continue unpunished. Yet it commands a wide range of agencies capable of addressing such abuses—such as the Federal Trade Commission, the Federal Communications Commission and—not least importantly, the Justice Department.
Powerful, life-altering companies require powerful oversight—through the prism of the warning given by Niccolo Machiavelli more than 500 years ago:
All those who have written upon civil institutions demonstrate…that whoever desires to found a state and give it laws, must start with assuming that all men are bad and ever ready to display their vicious nature, whenever they may find occasion for it.
If their evil disposition remains concealed for a time, it must be attributed to some unknown reason; and we must assume that it lacked occasion to show itself. But time, which has been said to be the father of all truth, does not fail to bring it to light.
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