Missouri Senate Finally Passes Bill Reducing Gifts From Lobbyists

(This was written two weeks before the Missouri Senate passed a bill related to gifts from lobbyists.)

There’s no such thing as a free lunch and the legislature is no exception. Unlimited gifts from lobbyists to lawmakers may be the most symbolic issue in regard to special interests. The Kansas City Star has frequently reported on legislative efforts to curtail this activity, including a database of gifts received by each Missouri lawmaker.

Nonetheless, we can only remain hopeful that the Senate passes this watered-down bill that would still allow gifts from lobbyists in a group setting. These points and more were brilliantly conveyed in Jason Hancock’s recent piece, “Free meals, free booze, free travel: Is this the year Missouri bans lobbyist gifts?”

Remarkably, Rep. Rocky Miller asserted that passing this bill could harm public sentiment toward government. No. If this bill fails to be passed, again, it will only contribute to most voters’ cynical view of their elected officials.

We could take comfort in saying that the corrupt legislators need to be voted out of office. However, that’s where the rubber meets the road in the cycle of corruption. Missouri has no “cooling-off” period, i.e lawmakers can leave office and immediately work as a lobbyist. Hence, this bill, along with others, needs to be passed to achieve true ethics reform.  

Corporate Donor for "Partnership for Drug-Free Kids" Receives $35 million fine

Another major opioid manufacturer has been fined by the DOJ since my column, “Why Corporations are Too Big to Jail in the Drug War,” was published six weeks ago. This time around it’s a corporate sponsor of the Partnership for Drug-Free Kids (formerly the Partnership for a Drug-Free America (PDFA). In fact, Mallinckrodt Pharmaceuticals is a “Champion Partner” with the Partnership for Drug-Free Kids. Then again, CVS Health is also a “Champion Partner,” even though their company was fined $3.5 million by the DOJ after pharmacists ignored red flags and filled fake prescriptions for dangerous narcotics. 

Companies such as Mallinckrodt Pharmaceuticals can hide behind their tax-deductible donations to organizations such as the Partner for Drug-Free Kids. Such contributions tend to purify the image of a company that sells opiates that are frequently abused recreationally, particularly Roxicodone. However, a recent investigative report by The Washington Paper left no doubt about the company’s complicit role in the opioid epidemic. According to confidential government records and emails that were obtained by their newspaper, Mallinckrodt Pharmaceuticals’ negligent conduct may have been responsible for nearly 44,000 federal violations and left their company liable for $2.3 billion in fines.

Roxicodone (Wikimedia Commons)

Needless to say, the obvious conclusion from this piece by The Washington Post, “The government’s struggle to hold opioid manufacturers accountable,” is that Mallinckrodt Pharmaceuticals should be facing criminal indictments. However, this is a $7.5 billion company. Hence, the same rules of criminal justice don’t apply. After multiple years of investigations and negotiations, the DOJ reached a civil settlement agreement in which their company will pay a fine of $35 million and not have to admit any wrongdoing. As you may have guessed, this penalty elicited a collective yawn from Wall Street traders as their share prices dropped merely 1% for the day.

Sen. Claire McCaskill (D-MO) is the one person on Capitol Hill who is leading an official inquiry into the major drug companies involved with the opioid epidemic. In the end, she'll likely more damning evidence that isn't presently available to the public. However, none of these companies will be truly held accountable until there are major structural changes to our governmental system. One Senator is no match to the systemic corruption that has enabled this corporate criminality. 

My column, “Why Corporations are Too Big to Jail in the Drug War,” goes into much more detail about why this cycle will continue until major changes are made. The revolving door between government and the private sector has corrupted the regulatory process. The DEA determines the exact number of prescription opiates that can be manufactured each year. Nonetheless, the DEA increased the manufacturing limit even as record numbers of prescription drug overdoses were occurring. Worst of all, financial conflicts of interest and outside pressure have forced the DEA and DOJ to act unconscionably lenient towards to the major drug companies that are responsible for this crisis. Instead, it’s much easier for the feds to target the low-hanging fruit that doesn’t have an army of lobbyists at their disposal. Our government is unwilling to confront the real players who are responsible for the massive black market for prescription drugs. Suffice it to say, the war on drugs is an absolute lie.

(By the way, there are more examples of hypocritical/shameless donors to the Partnership for a Drug-Free America included in The Drug War: A Trillion Dollar Con Game, the first volume of my book series, Rackets. All three books will be released next Tuesday, April 11th.)

Money Launderer Sentenced to Prison - Not Employed By a "Too Big to Fail" Bank

Twenty-eight states have legalized medical marijuana; recreational marijuana is legal in eight states and the District of Columbia. Nevertheless, the federal government has numerous money laundering regulations in place that block banks from servicing legal marijuana providers. Consequently, legal marijuana dispensaries are forced to do all transactions in cash. Hence, Sen. Elizabeth Warren (D-MA), along with nine other Senators, recently wrote an official letter to the Financial Crimes Enforcement Center (FinCEN) in hopes of easing those banking rules. A spokesman for FinCEN told the Los Angeles Times that they’re reviewing the letter.

This gesture by this group of Senators was a plea for common sense. Providing banking options for legal marijuana businesses will reduce the risk of potential violent crime. Secondly, it would increase financial transparency, which would actually prevent possible money laundering. In other words, criminal organizations would view cash-only marijuana dispensaries as a better destination for laundering money, as opposed to dispensaries where there are electronic records for every transaction. 

Worst of all, this federal fiasco is all for show. These bureaucrats are most concerned with projecting an image of being “tough on crime.” It’s all style and no substance. Case in point, the “Too Big to Fail” banks have employed the most egregious money launderers. Regardless, none of these white collar criminals have gone to prison. Let’s take a look at a recent story involving a Denver woman that illustrates this dichotomy.

Last November, Marybell Delarosa-Quintana was sentenced to five years in prison for money laundering. In fact, the judge said that it would have been 15 years if she had not testified against several Mexican cartel members. As an insurance agent for a small business in Denver, Delarosa-Quintana laundered $281,000 for two Mexican drug cartels. The primary bank that she chose for her deposits was Wells Fargo. This was an ironic choice because Wells Fargo acquired Wachovia after it was involved in the largest money laundering case in U.S. history. Wachovia processed $373 billion in suspected drug money over a four-year period even though federal regulators warned the company about those particular transactions. Nevertheless, no employees of Wachovia were prosecuted and the company had to pay a penalty of $160 million, which was only a fraction of their profits. The takeaway here is that Marybell Delarosa-Quintana was guilty of not working for a “Too Big to Fail” bank.

London-based HSBC, one of the largest financial institutions in the world, eventually surpassed Wachovia’s record for the biggest money laundering scandal. The U.S. Department of Justice described HSBC as the “preferred financial institution for drug cartels and money launderers.” As much as $670 billion of potential drug money went unmonitored by their bank. In fact, drug cartels knew the exact dimensions HSBC bank teller windows. Accordingly, they stuffed boxes of cash through those windows on a daily basis. 

El Chapo's Sinaloa Cartel laundered money through HSBC branches. (Photo - Day Donaldson/Flickr)

Money laundering may not offend you personally if you don’t agree with the war on drugs. However, HSBC also knowingly did business with a Saudi Arabian bank, Al Rajhi, which had links with the 9/11 terrorists. Can you guess what the punishment was for HSBC? In 2012 the DOJ entered into a plea agreement in which HSBC was fined $1.9 billion, but none of their employees faced criminal charges. One year later, former Attorney General, Eric Holder, testified before Congress that the DOJ had been hesitant to pursue some of the largest banks because they were considered "too big to fail." However, a recent report by the House Committee on Financial Services’ Republican staff contradicted that claim. This report found that Holder and other top officials of the DOJ overruled their staffers’ recommendation to prosecute HSBC. As a matter of fact, HSBC negotiated a more favorable plea deal after Holder had personally issued a “take-it-or-leave-it” deadline.

The only plausible explanation for such glaring hypocrisy is the revolving door between government and the private sector. It’s one hell of a racket. Several government officials are succumbing to conflicts of interest while serving in law enforcement or as regulators. The payoff comes when they return to the welcoming arms of the private sector with lucrative salaries for services rendered. As for Eric Holder, he returned to the powerful law firm Covington & Burling in 2015. His salary was never announced publicly, but his former Assistant Attorney General, Lanny Breuer, returned to Covington & Burling in 2013 to reportedly $4 million annually in compensation. Hence, you can assume that Holder’s payday was even greater. Albeit, HSBC was never a client of Covington & Burling; consequently, there was no direct quid pro quo. However, their firm has represented several major banks. And that conflict of interest is the most apparent explanation for why every “Too Big to Fail” bank received the white glove treatment from the DOJ while Holder was in charge.

All in all, the money laundering aspect illustrates one of the many glaring examples proving that the drug war is a lie.