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Blog Post | May 11, 2022

House Oversight Hearing Shows Why Attacking Corporate Villainy Needs To Be A Priority

Congressional OversightEthics in Government
House Oversight Hearing Shows Why Attacking Corporate Villainy Needs To Be A Priority

In a 2017 presentation, global consulting powerhouse McKinsey laid out a new profit scheme intended to push Purdue Pharma’s OxyContin to even greater heights. Included in this presentation was McKinsey’s push for Purdue to offer rebates to its distributors (and insurers) for every OxyContin-related overdose attributable to pills they sold in order to ensure that distributors were properly motivated to continue pushing the product. In short, McKinsey suggested that Purdue buy off those with growing concerns about Oxy and the surging number of deaths associated with it.

Read that again.

McKinsey advised Purdue to bribe health insurance companies to turn a blind eye to thousands of deaths so that Purdue’s, and by proxy their own, addiction-fueled bottom line was not undermined. To be clear, McKinsey suggested that Purdue pay insurers to let more people die, rather than preventing people from dying. 

Even for Purdue, a company that nearly single-handedly crafted a deadly epidemic for profit, McKinsey’s morbid money-seeking strategies had seemingly gone too far. They didn’t implement the plan. To be fair, while the mere suggestion of such a thing, in painful detail, is shockingly vile, such conduct seems to be par for the course for McKinsey. The firm is notorious for helping Saudi Arabia identify influential “dissidents” (journalists) who it subsequently murdered; and for advising ICE to deny food, medical care, and due process to migrants to save a few bucks. But it was McKinsey’s particularly reprehensible work with Purdue that landed it in front of a House Oversight Committee hearing on April 27, following the publishing of a report by committee staff. 

The hearing was a golden opportunity for Congress to actually hold a corporation to account for its objectively horrendous and potentially illegal behavior. On an ostensibly bipartisan issue like the opioid epidemic, one could be forgiven for thinking that the hearing would do just that. Unfortunately, Democrats largely fell short of this goal with decidedly lukewarm lines of inquiry. And Republicans, classically, used the hearing to waste precious committee time with at best specious, and at worst racist, concerns about border security.

Democrats largely focused on the issue of McKinsey consulting for both the FDA and opioid manufacturers, and lying about its purported ethical firewall between the two contracts. Many Democrats, however, failed to emphasize that McKinsey opened a portal for private companies to manipulate their regulators through use of consultants that literally worked both sides – seemingly without adequate disclosure. Failing to disclose conflicts of interest, and the deliberate evasion of such disclosure, is illegal, and McKinsey’s unique position at the crossroads of regulatory and private interests enabled the regulatory failures that allowed the opioid crisis to foment at all. 

Democrats should have belabored this point, but many committee members just tsk-tsked McKinsey through a semi-vague ethics lens that completely missed the critical lawbreaking at work. Rep. Kelly (D-IL), for example, asked Sternfels if McKinsey considered “cutting ties” with Purdue during the peak of the public lawsuits emerging against the company. McKinsey’s business judgment was not, and should not have been, the point. The point is that McKinsey leveraged its inside knowledge on the FDA to fuel the opioid crisis, and Purdue’s profits, at the cost of the public health of the nation. Why did members of Congress not explicitly attack them for it? 

Democrats’ (mostly) softball questions were complemented by racist grandstanding from their Republican counterparts. Even amidst factual wrongdoing, regarding an issue that continues to kill thousands, Republicans took the hearing as an opportunity to shoehorn unbridled xenophobia on the Congressional stage. In a hearing about McKinsey’s illegal and illicit role in fueling the opioid crisis, Rep. Comer (R-KY), the ranking member on the committee, instead opined about the US-Mexico border. Specifically, Comer sung praises of Title 42, a Trump-era emergency order that weaponizes hollow public health concerns to deny immigrants asylum processes, and funneled his time into claiming that Biden’s “decreas[e in] funding at the border, halting [of] border wall construction and allowing [of] illegal immigrants to make a mockery of our immigration laws” is actually, ultimately, what is responsible for the opioid crisis today. 

To be clear, this blatant anti-immigrant sentiment is factually false and a political tool of distraction. The opioid giants – guided by McKinsey – manufactured the opioid crisis through their insistent pill-pushing and their obfuscation of the wildly addictive nature of the pills themselves. It is this marketing that created a nation-wide addiction crisis that has since fueled increasing demand for more potent drugs, including fentanyl. It is this root responsibility that the committee convened an investigation into, and it is this root responsibility that Comer buried under irrelevant layers of racist trumpeting throughout his remarks.

More or less every Republican on the Committee proceeded to launch into the same rant, parroting made-for-Twitter taglines about the “Biden Border Crisis.” They exclusively asked questions of a former Acting DEA Administrator, Uttman Dhillon, who had no connection to McKinsey or Purdue, without paying any mind to the executive they were supposed to be questioning. With few exceptions, Republicans rarely even acknowledged that the hearing was about McKinsey literally bribing insurance companies to look the other way as people died of profitable drug overdoses. 

Rep. Norman (R-SC), for example, chose to depart from any veneer of commitment to the purpose of the hearing and instead embarked on an absurd rant about how “[the border] is a total travesty that will be hard to recover from, it’s a violation of the Constitution, [and] we’ve got an invasion that’s taking place right before our eyes.” 

When they did offer any acknowledgement that bribing companies to aid and abet in the deaths of thousands and the (continuing) construction of a public health catastrophe is wrong, Republicans had two excuses. For one, look to Rep. Comer’s sardonic thank you to committee Chairwoman Maloney (D-NY), “for having a history lesson for us today about what happened with Big Pharma and with McKinsey many years ago,” meaning that such conduct simply no longer matters. For the other, look to Rep. Higgins’ (R-LA) assertion that “Mckinsey obviously was involved in some gray areas… and they’ve been held to account… [so] we must move on to the actual threat to our country, which is fentanyl pouring over the border.” 

Incidentally, when asked, those were the same reasons that the McKinsey Global Managing Partner Bob Sternfels, used to try and launder the firm’s reputation. Sternfels went so far as to claim that McKinsey so desperately wanted to be a proactive part of the solution, and felt so ashamed of their role in the opioid crisis, that they withdrew from consulting for opioid giants and gave communities millions. Sternfels’ written testimony asserts:

“Nevertheless, we have recognized and publicly expressed that we did not adequately acknowledge the unfolding epidemic, and that our work fell short of our standards. As a result, in 2019, we decided to end all work on opioid-specific business globally, and we have committed to being part of the solution to this serious challenge. As part of that commitment, in early 2021, we proactively engaged with state attorneys general across the country to reach a settlement that provided more than $600 million to prevention, treatment, and recovery efforts across the country.”

The problem? Both of those actions were required as part of a settlement with 47 state attorneys general. In other words, this self-congratulatory assertion that McKinsey is the face of the solution to its own harms, amounts to McKinsey’s hollow attempts to earn public praise for its court-presided punishment

Also, the death toll cited during the hearing from the opioid crisis, which (again) McKinsey actively sought to expand, exacerbate, and otherwise worsen for profit, was around half a million. That would mean McKinsey was only forced to pay about $1200 per opioid related death they contributed to. To put this in perspective, the U.S. government values one human life at roughly $10 million. This means that the relative cost of these deaths was a collective $5 trillion. Yet McKinsey walked away with a fine that was less than 0.00012% of the total cost of these deaths, and a measly 0.06% of just one year of McKinsey’s estimated $10 billion average revenues.

To be clear, there should be no price tag on the value of human life. But, the difference between McKinsey’s measly so-called community contributions and the grave costs of its actions are staggering. When a person kills another, it amounts to decades in jail time. When a corporation willfully leaves millions to die as sacrifices at the altar of profit, they get away with a paltry fine.

Committee members had a responsibility to push back on these antics and to craft a clear focus on, and explicit narrative about, the malevolence of McKinsey’s behavior. Democrats also had a responsibility to push back on the Republicans’ blatantly xenophobic proclamations — as clear an example as you’ll come by of right-wingers using racial hatred as a smokescreen to divert legitimate anger against corporations and the ultra-rich. Instead of aggressively fighting these blatant attempts to steer the focus away from holding companies accountable to blaming immigrants, Democrats sat there and let Republicans have a parallel hearing. 

To be fair, engaging with Republicans’ clear bad-faith digs is unlikely to have been productive, but Democrats could have combated the narrative being crafted by their Republican counterparts through clear, coordinated questioning that brought the hearing back to the point. Democrats could have undermined Republicans’ standing through a clear deconstruction of where the opioid crisis came from (Purdue, by way of McKinsey) with an ultimate focus on seeking accountability from McKinsey. The exception was Rep. Connolly (D-VA), who had a fun little bit about feigning shock about McKinsey and Purdue not being based in Mexico: “So, the OxyContin part of the opioid crisis began apparently south of the border – is that right?” … “No? Oh my goodness I wouldn’t know that from their questioning.” But few walked this critically important line. There were some good questions that got to the heart of McKinsey’s malpractice from Reps. Bush, Tlaib, Johnson, Porter, Pressley and others, but these critical inquiries got lost at the end of a long hearing left without a coordinated message from the Democratic Representatives. By contrast, Republicans had a plan, a consistent message, and a clear strategy. 

The Democrats, aside from Connolly’s sarcasm, did nothing to try and weave a concrete storyline about the dangers of corporate abuse. Indeed, they not only “lost the hearing,” but they lost a golden opportunity. Dramatic stagecraft pitting Democrats against corporate plutocrats responsible for deep suffering across the country would not only be a human reaction applying a magnifying glass to behavior the government should rein in… it would be terrific politics.
Here at the Revolving Door Project, we’ve been adamant that Democrats need to make corporations their enemies — both because Republicans won’t and because those companies are doing real harm at the expense of everyday people. This was not only a chance to highlight, and to attack, an objectively abusive company, but to also start laying the groundwork for a broader messaging and platform strategy. The Democratic party will continue to lose if it refuses to even shoot its layups.

PHOTO CREDIT: “Washington DC – Capitol Hill: United States Capitol” by wallyg is marked with CC BY-NC-ND 2.0.

Congressional OversightEthics in Government

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