- As part of a more than $8 billion settlement with the U.S. Department of Justice, Purdue Pharma will plead guilty to one count of conspiracy to defraud the U.S. government and two counts of violating anti-kickback, or bribery, laws.
- Because Purdue filed for bankruptcy last year, that full figure likely won’t be collected by the government.
- Under the settlement, which will need approval in bankruptcy court, Purdue would become a public benefit corporation that is controlled by the government, with revenue from opioid sales being used to fund treatment options and programs.
- A number of state attorneys generals and Democratic lawmakers have said the settlement does not hold Purdue or its owners fully accountable and could derail thousands of other cases against the company.
- They have also argued that the government should “avoid having special ties to an opioid company… that caused a national crisis.”
Purdue to Plead Guilty to 3 Criminal Charges
The Justice Department announced Wednesday that Purdue Pharma has agreed to plead guilty to three criminal charges related to fueling the country’s opioid epidemic.
Notably, those guilty pleas come as part of a massive settlement worth more than $8 billion, though Purdue will likely only pay a fraction of that amount to the government.
Purdue is the manufacturer of oxycontin, which is a powerful and addictive painkiller that’s believed to have driven the opioid crisis. Since 2000, opioid addiction and overdoses have been linked to more than 470,000 deaths.
As part of the settlement, Purdue will plead guilty to one count of conspiracy to defraud the United States. There, it will admit that it lied to the Drug Enforcement Administration by claiming that it had maintained an effective program to avoid opioid misuse. It will also admit to reporting misleading information to the DEA in order to increase its manufacturing quotas.
While Purdue originally told the DEA that it had “robust controls” to avoid opioid misuse, according to the Justice Department, it had “disregard[ed] red flags their own systems were sending up.”
Along with that guilty plea, Purdue will also plead guilty to two anti-kickback, or bribery, related charges. In one charge, it will admit to violating federal law by paying doctors to write more opioid prescriptions. In the other, it will admit to using electronic health records software to increase opioid prescriptions.
According to a copy of the plea deal obtained by the Associated Press, Purdue “knowingly and intentionally conspired and agreed with others to aid and abet” the distribution of opioids from doctors “without a legitimate medical purpose and outside the usual course of professional practice.”
The $8 billion in settlements will be split several different ways.
In one deal, the Sackler family — which owns Purdue — will pay $225 million to resolve civil fines.
As part of the main deal, another $225 million will go directly to the federal government in a larger $2 billion criminal forfeiture; however, the government is actually expected to forego the rest of that figure.
In addition to that, $2.8 billion will go to resolving Purdue’s civil liability. Another $3.54 billion will go to criminal fines, but because Purdue filed bankruptcy last year, these figures also likely won’t be fully collected — largely because the government will now have to compete with other claims against Purdue in bankruptcy court.”
Purdue Will Become a “Public Benefit Company”
Since Purdue is in the middle of bankruptcy proceedings, a bankruptcy court will also need to approve the settlement.
“The agreed resolution, if approved by the courts, will require that the company be dissolved and no longer exist in its present form,” Deputy Attorney General Jeffrey Rosen said.
However, that doesn’t mean that Purdue’s fully gone or that it will even stop making oxycontin. In fact, as part of this settlement, the Sacklers would relinquish ownership of Purdue, and it would then transform into what’s known as a public benefit company.
Essentially, that means it would be run by the government. Under that setup, money from limited oxycontin sales, as well as from sales of several overdose-reversing medications, would be pumped back into treatment initiatives and other drug programs aimed at combating the opioid crisis.
For its part, the Justice Department has endorsed this model.
Should Purdue Be Punished More?
There has been strong opposition to this deal, mainly from state attorneys general and Democratic members of Congress who say it doesn’t go far enough.
Those critics argue that the settlements don’t hold Purdue or the Sackler family fully accountable, especially the Sacklers since — unlike Purdue — they didn’t have to admit any wrongdoing.
“[W]hile our country continues to recover from the pain and destruction left by the Sacklers’ greed,” New York Attorney General Letitia James said, “this family has attempted to evade responsibility and lowball the millions of victims of the opioid crisis. Today’s deal doesn’t account for the hundreds of thousands of deaths or millions of addictions caused by Purdue Pharma and the Sackler family.”
“If the only practical consequence of your Department’s investigation is that a handful of billionaires are made slightly less rich, we fear that the American people will lose faith in the ability of the Department to provide accountability and equal justice under the law,” A coalition of 38 Democratic members of Congress said in a statement to Attorney General Bill Barr last week.
While this settlement doesn’t include any convictions against the Sacklers specifically, as the Justice Department noted, it also doesn’t release them from criminal liability and a separate criminal investigation is ongoing.
Still, last week, 25 state attorneys general asked Barr not to make a deal that includes converting Purdue into a public benefit company, urging the Justice Department to “avoid having special ties to an opioid company, conflicts of interest, or mixed motives in an industry that caused a national crisis.”
Part of their concern is that the government would essentially run this new company while also holding the original one accountable. Those attorneys general instead argued that Purdue should be run privately but with government oversight.
See what others are saying: (Associated Press) (The New York Times) (Fox Business)
Supreme Court Sides With High School Cheerleader Punished for Cursing on Snapchat
The justices ruled that the student’s year-long suspension from her school’s cheer team over an expletive-filled Snapchat was too severe because her post was not disruptive.
SCOTUS Rules in Free Speech Case
The Supreme Court ruled Wednesday that a Pennsylvania school district violated the First Amendment when it handed a cheerleader a year-long suspension from her team after she sent friends an expletive-filled Snapchat outside school grounds.
The case in question centered around a snap sent in 2017 by now-18-year-old Brandi Levy in which she expressed frustration at not making her high school’s varsity cheer squad. The snap, sent on a Saturday from a convenience store, shows Levy and a friend flipping off the camera with the caption: “F— school, f— softball, f— cheer, f— everything.”
That post was sent to around 250 people, including other cheerleaders at her school. When her coaches were alerted to the post, they suspended her from cheerleading for a year.
Levy and her family, represented by lawyers from the American Civil Liberties Union, sued the school district, arguing that it had no right to punish her for off-campus speech.
A federal appeals court agreed with that argument, ruling that schools could not regulate speech outside school grounds. That decision marked the first time that an appeals court had issued such a broad interpretation of the Supreme Court’s landmark 1969 student speech ruling.
In that case, SCOTUS allowed students to wear black armbands in protest of the Vietnam War, declaring that they do not “shed their constitutional rights to freedom of speech or expression at the schoolhouse gate.”
The high court did specify that disruptive speech on school grounds could be punished.
Off-Campus Speech Questions Left Unresolved
In Wednesday’s decision, the justices agreed that Levy’s punishment was too severe because her speech did not meet the test of being disruptive. However, they did not uphold the appeals court decision that schools never have a role in disciplining students for off-campus speech.
“The school’s regulatory interests remain significant in some off-campus circumstances,” Justice Stephen Breyer wrote in the opinion for the court’s majority. “Thus, we do not now set forth a broad, highly general First Amendment rule stating just what counts as ‘off campus’ speech and whether or how ordinary First Amendment standards must give way off campus.”
Breyer also added that specific question would be left for “future cases.”
In the sole dissent, Justice Clarence Thomas objected to that approach, arguing that Levy’s language met the threshold for speech that is disruptive and thus can be regulated off-campus based on past precedent. His colleagues’ ruling, he wrote, “is untethered from anything stable, and courts (and schools) will almost certainly be at a loss as to what exactly the court’s opinion today means.”
Both opinions are significant because while the majority decision focused more narrowly on whether the speech, in this case, was disruptive, the justices appear to be opening up space for a case that centers more specifically around the power of schools to regulate student speech off-campus.
Still, Levy and the ACLU cheered the decision as a victory for student speech off-campus, despite the court’s lack of ruling on the subject.
“Young people need to have the ability to express themselves without worrying about being punished when they get to school,” Levy said in a statement.
“The school in this case asked the court to allow it to punish speech that it considered ‘disruptive,’ regardless of where it occurs,” ACLU’s legal director David Cole added in separate remarks. “If the court had accepted that argument, it would have put in peril all manner of young people’s speech, including their expression on politics, school operations, and general teen frustrations.”
See what others are saying: (The Washington Post) (NPR) (The Associated Press)
Biden To Outline Actions Aimed at Combatting the Recent Rise in Violent Crime and Gun Violence
The president’s orders come the same day the Associated Press released data showing that a record number of gun sales were stopped last year because of background checks.
President Biden Issues Orders on Violent Crime Rise
President Biden will outline several actions on Wednesday that his administration plans to take to curb the recent rise in violent crime and gun violence.
That includes tougher enforcement policies for federal gun control laws, as well as new guidelines for how cities and states can use COVID-19 relief funds to combat gun violence. For instance, those guidelines will allow for the hiring of more police officers, paying officers overtime, buying equipment, and funding additional “enforcement efforts.”
Biden’s plan also includes investing in community-based intervention programs for both potential perpetrators and potential victims of gun violence and helping felons adjust to housing and work after leaving prison.
Background Checks Stop Record Number of Sales
Hours ahead of Biden’s announcement, the Associated Press reported that background checks blocked a record 300,000 gun sales last year, according to newly obtained FBI data provided by a nonprofit that advocates for gun control.
In fact, the numbers are staggering compared to previous years. For example, background checks that successfully blocked gun sales last year amounted to nearly twice that of 2019.
Notably, about 42% of those blocked sales were explicitly because would-be buyers had felony convictions on their records.
Still, it’s important to note that these stats don’t necessarily mean less guns are being successfully bought. While the rate of barred buyers has increased somewhat from around 0.6% to 0.8% since 2018, the U.S. also saw a record number of gun sales last year.
Nearly 23 million guns were bought in 2020 alone, according to the consulting firm Small Arms Analytics. Alongside that record, the country saw another record when it came to the rate of gun violence.
Because of that, Everytown for Gun Safety — the group that gave the AP the new background check data — reiterated its belief in the need for stronger gun control regulation.
“There’s no question that background checks work, but the system is working overtime to prevent a record number of people with dangerous prohibitors from being able to buy firearms,” Sarah Burd-Sharps, the group’s director of research, told the AP. “The loopholes in the law allow people to avoid the system, even if they just meet online or at a gun show for the first time.”
Unsurprisingly, gun rights advocates have pushed against that idea, and some have even pushed against this new data on background checks. As Alan Gottlieb — founder of the group the Second Amendment Foundation — argued, the higher number of denials could be partially because of false positives.
“A day doesn’t go by that our office doesn’t get complaint calls from people who’ve been denied wrongly,” he told the AP.
See what others are saying: (USA Today) (Associated Press) (Reuters)
California Plans Unprecedented $5.2 Billion Rent Forgiveness Program
State lawmakers are also debating on whether to extend the eviction moratorium, which is set to end next week, to ensure that Californians are not evicted before their debts can be paid off by the state.
Rent Relief in the Works
The California State Legislature is in the final stages of negotiating an unprecedented $5.2 billion rent forgiveness program to pay off unpaid rent accumulated during the pandemic.
It is not entirely clear yet who would receive the money, which comes from an unexpected budget surplus and federal stimulus funds. After speaking to a top aide for Gov. Gavin Newsom (D), the Associated Press reported that the $5.2 billion figure would cover all rent.
However, the same aide told The New York Times that the state had federal funds “to help pay the rent of low-income people.”
The outlet also explicitly reported that the program “would be available to residents who earn no more than 80 percent of the median income in their area and who can show pandemic-related financial hardship.”
Newsom offered little clarity, retweeting multiple stories and posts on the matter, including The Times article as well as others that said “all” rent would be paid.
Regardless, the program would be the most generous rent forgiveness plan in American. Still, there remains an unresolved question of extending the statewide eviction moratorium that ends June 30.
Eviction Ban Complications
Starting the new program and distributing all the money will take some time, and California has been struggling to keep up with demand for more modest rent relief programs.
According to a report from the California Department Housing and Community Development, just $32 million of $490 million in requests for rental assistance through the end of May had been paid.
State legislators are debating extending the protections and are reportedly close to a deal, but nothing is set in stone yet.
Tenants rights groups say the move is necessary to ensure struggling Californians are not evicted before their debts can be paid off by the state, and some housing advocates want to keep the moratorium in place until employment has reached pre-pandemic levels.
Landlords, however, have said it is time to end the ban, pointing to the state’s rapid economic recovery, which added 495,000 new jobs since February, as well as Newsom lifting all restrictions on businesses last week.
But according to Opportunity Insights, an economic tracker based at Harvard, while it is true that employment for middle- and high-wage jobs has now surpassed pre-pandemic levels, the rates for low-income workers are down nearly 40% since January of last year.
As a result, many of the people who have months or even a year of unpaid rent have barely been able to chip away at what they owe.
State Recovery Spurred by Revenue Surplus
Newsom’s new program comes as the governor has proposed a $100 billion recovery package — also drawing from the budget surplus and unspent federal funds — that would pour funds into numerous sectors including education, homelessness, and much more.
California is not the only state that has newfound reserves. According to The Times, at least 22 states have surplus revenue after pinching pennies during the pandemic. Some are still deciding what to do with the funding, but others have already begun to invest it into education, construction, the arts, and more.
While many economists have said these funds will be incredibly helpful tools to get economic recovery back on track and aid those hurt most by the pandemic, Republicans in Congress have argued to those surpluses should go towards paying for President Joe Biden’s infrastructure plan.
The Biden Administration and most Congressional Democrats have remained adamant that the states keep their extra funding to implement recovery-centered programs. White House spokeswoman Emilie Simons reiterated that belief Monday, telling reporters that state surpluses will not alter America’s infrastructure needs and emphasizing that many states are still struggling economically.
“This crisis has adversely impacted state and local governments, and that is not fully captured by one economic indicator,” she said.