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The four-year run-up to what would eventually result in the company’s plea agreement involved Purdue Pharma struggling to understand that the backwoods lawyers had in fact sussed out a crime inside their mound of documents. The company put a full-court press on Brownlee, first with multiple phone calls from Rudy Giuliani, who attempted to unnerve the much younger man during settlement negotiations on Purdue’s behalf.
Brownlee had read Giuliani’s book, Leadership, to get ready for his first meeting with him. “I wanted to be prepared,” he said. “Look, my view of the case was, it didn’t matter where we were or how small we were. To me, it demonstrated that a couple of good, smart prosecutors, working out of a strip mall in Abingdon, Virginia, if they work hard and they’re tenacious, they can win one of the biggest cases in Virginia,” he told me.
An assistant prosecutor in the case recalled that Giuliani put on a folksy front but was not intimately involved in the negotiation’s details, possibly because he was pursuing what would prove to be a failed bid for the Republican presidential nomination. “His role was that his star power alone was supposed to intimidate us,” said an assistant federal prosecutor involved in the negotiations who was not authorized to speak publicly about the case. “People say ‘the government and all its resources,’ but when you’re in the middle of a case like this, you don’t feel that sense because they always have way more people working on the case than you have.”
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In the fall of 2006, Purdue’s lawyers began to sense that this case against them was different; that a full-court press meant nothing when the opposing counsel was the United States of America. Was it really possible the small-town lawyers had compiled enough evidence to indict both the company and its top executives on a host of felony charges, not just for misbranding the drug but also for mail fraud, wire fraud, and money laundering? It seemed so, according to a memo written by the federal prosecutors to Brownlee at the time.
“But it got watered down, as it went through the Department of Justice headquarters, and the folks working for Purdue, including Giuliani, lobbied hard for the executives not to be indicted on felony charges,” said an observer connected to the case. The fines would get batted around, too, with Purdue initially offering to pay $10 million compared with the government’s initial proposal of $1 billion.
The winnowing down of a settlement is a common part of plea agreements. Prosecutors typically threaten more serious charges while defense lawyers counter that they’ll go to trial to prove their client’s innocence. Meanwhile, Giuliani’s lobbying efforts arrived with the timing and authority of a flagrant foul. In 2005, Purdue lawyers called then–deputy attorney general James Comey to question Brownlee’s investigatory tactics, and Comey called Brownlee with concerns. The young attorney responded by personally driving to Washington to lay out his strategies.
“Brownlee, you are fine. Go back to Virginia and do your case,” Comey told him.
But Purdue’s boldest move came later, in October 2006, the night before the plea agreement was set to expire—after which the company would face charges—when a senior Justice Department officer phoned Brownlee at home (at a Purdue lawyer’s request), urging him to extend the deadline to give Purdue more time. Brownlee was through being pressured. The lobbying and negotiations had gone on long enough. The clock had all but run out.
Rather than risk more serious charges or a jury trial in western Virginia, where the drug’s problems were by now legend, the company accepted the plea agreement later that night. But Purdue wasn’t quite finished negotiating. Eight days after it accepted the deal, Brownlee was stunned to see his name on a firing list, along with four other U.S. attorneys. Though he wasn’t ultimately fired, the incident provided fresh criticism of then–attorney general Alberto Gonzales, accused of trying to sway the work of U.S. attorneys’ offices.
And it only underscored the long reach of Purdue: Udell’s defense lawyer Mary Jo White, a former Manhattan U.S. attorney, had been the one to press for more time in a call to a Department of Justice official. (Brownlee would break down how Purdue’s attempted influence peddling worked—or didn’t—in a later Senate hearing about the case.)
Brownlee weathered the heat. By the time the negotiations were complete, a Purdue-owned holding company, Purdue Frederick, would plead guilty to a single misbranding felony and the company’s executives to misdemeanor charges of misbranding the drug. In a bit of legal-language parsing, the executives would not stipulate that they’d had direct knowledge of the misbranding, only that “the court may accept these facts in support of their guilty pleas.” In other words, their only crime was that they headed up a firm wherein other people committed crimes.
Compared with the charges Ramseyer and Mountcastle had originally threatened, the final agreement was a mixed bag. Prosecutors initially wanted to impose the $1 billion corporate fine as well as multiple felony charges against both the company and the executives. “But we got what we could get,” said a prosecutor involved in the case.
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Purdue, for its part, had initially proposed paying $10 million and incurring no felony charges—“an insult,” according to a government source involved in the negotiations. “It was clear they thought we’d take a very small sum of money and go away—because it would be a lot of money for a district of our size,” the source said. “I will tell you, what we ended up with was far closer to where we started than where they started.
“Their lawyers were shocked,” the negotiator added. “They did not expect the firmness with which we approached this.…Had they not agreed, we were fully prepared to take them to trial.” The Sacklers, anyway, were convinced. Midway through the negotiations, following a Washington meeting of both sides, word filtered down from the Sackler family: “We can’t buy our way out of this one. Make this case go away,” the government negotiator recalled. If that meant throwing three executives under the bus, well, then, the men had been loyal employees for many years. But the Sacklers had to do what the Sacklers had to do.
The Sacklers understood that a federal jury convened in southwest Virginia, a region that had now seen as many as two hundred OxyContin-related deaths, could have awarded far harsher penalties. “We weren’t just trying to get a little bit of money from them. The goal was to stop the criminal behavior, punish it, and to strip them of their profits,” the negotiator said.
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On a clear day in May 2007, in the atrium of a downtown Roanoke office building, Brownlee unveiled the news of the settlement: The company and its top executives would plead guilty to their role in a marketing blitz that hyped OxyContin’s strengths while downplaying its propensity for addiction and abuse. To resolve the federal criminal and civil misbranding charges, Purdue would pay $600 million in fines and admit that for six years it had fraudulently marketed OxyContin as being less prone to abuse and having fewer narcotic side effects than instant-release versions of the drug—a felony misbranding charge. Top executives Paul Goldenheim, Michael Friedman, and Udell would pony up $34.5 million (or, rather, the firm would, on their behalf) and plead guilty to misdemeanor versions of the crime. The fines against Purdue and its executives accounted for about 90 percent of the company’s profits from the time the drug went on the market, in 1996, until 2001, when Purdue dropped the insert language about the timed-lapse mechanism’s ability to “reduce the abuse liability of a drug,” Brownlee explained. It was the eleventh-largest fine paid by a pharmaceutical firm in the Justice Department’s history.