Pubdate: Thu, 22 Dec 2016
Source: Washington Post (DC)
Copyright: 2016 The Washington Post Company
Authors: Scott Higham, Lenny Bernstein, Steven Rich and Alice Crites


Pharmaceutical companies that manufacture or distribute highly
addictive pain pills have hired dozens of officials from the top
levels of the Drug Enforcement Administration during the past decade,
according to a Washington Post investigation.

The hires came after the DEA launched an aggressive campaign to curb a
rising opioid epidemic that has resulted in thousands of overdose
deaths each year. In 2005, the DEA began to crack down on companies
that were distributing inordinate numbers of pills such as oxycodone
to pain-management clinics and pharmacies around the country.

Since then, the pharmaceutical companies and law firms that represent
them have hired at least 42 officials from the DEA -- 31 of them
directly from the division responsible for regulating the industry,
according to work histories compiled by The Post and interviews with
current and former agency officials.

The number of hires has prompted some current and former government
officials to question whether the companies raided the division to
hire away DEA officials who were architects of the agency's
enforcement campaign or were most responsible for enforcing the laws
the firms were accused of violating.

"The number of employees recruited from that division points to a
deliberate strategy by the pharmaceutical industry to hire people who
are the biggest headaches for them," said John Carnevale, former
director of planning for the White House's Office of National Drug
Control Policy, who now runs a consulting firm. "These people
understand how DEA operates, the culture around diversion and DEA's
goals, and they can advise their clients how to stay within the

The DEA's Diversion Control Division, tasked with preventing
prescription drugs from reaching the black market, wields enormous
power within the pharmaceutical world. The small division, with about
300 employees at its Arlington, Va., headquarters, can suspend or
revoke the licenses of doctors, pharmacies and pharmaceutical
companies that fail to comply with federal law.

 From 2000 to 2015, nearly 180,000 people have died of overdoses from
prescription painkillers in what public health authorities have called
an epidemic. States including Massachusetts, and most recently
Virginia, have declared public health emergencies as the number of
deaths has escalated.

It is not unusual for corporations to hire federal employees directly
away from the government.. Their expertise and inside knowledge can be
invaluable, but there are laws and regulations to slow the "revolving
door" in Washington and prevent potential conflicts of interest.

The restrictions include a lifetime ban on participating "personally
and substantially" on a "particular matter" that the official had
handled while working for the federal government. There also is a
two-year ban on switching sides on a wider array of matters that were
in the employee's official purview. State bar associations impose
additional post-employment restrictions for government lawyers.

An industry spokesman said former DEA diversion officials are hired
for their expertise.

"Our industry is highly specialized, and the function of drug
diversion experts even more so," said John M. Gray, president and
chief executive of the Healthcare Distribution Alliance, which
represents drug distributors. "As such, for these individuals who want
to continue to grow in their areas of expertise, it is logical for
them to pursue government and industry roles that are closely aligned
with their professional experience."

While The Post did not find evidence that the officials violated
conflict-of-interest regulations, the number of hires from one key
division shows how an industry can potentially blunt a government
agency's aggressive attempts at enforcement.

The DEA diversion officials who have gone to the industry since 2005
include two executive assistants who managed day-to-day operations;
the deputy director of the division; the deputy chief of operations;
two chiefs of policy; a deputy chief of policy; the chief of
investigations; and two associate chief counsels in charge of legal
affairs and enforcement actions against pharmaceutical companies.

"It's obvious that they targeted the office," said Joseph T.
Rannazzisi, who ran the diversion division for a decade before he was
removed from his position and retired in 2015. "If you want to
understand how we were doing our investigations, the best way to do it
is to take our people who are doing the investigations and put them in
place in your company. It's not difficult to understand why you would
take these guys. They know the law."

Most of the DEA officials went to work for the pharmaceutical industry
and law firms within weeks of leaving the agency. Among the 31 DEA
diversion employees, 22 began their new jobs within weeks of leaving
the DEA, according to work histories the officials posted on LinkedIn,
as well as news releases and biographies published by the companies
and law firms that hired them.

The Post found that several high-ranking DEA supervisors from outside
the diversion division also took top jobs with industry: four special
agents in charge and three assistant special agents in charge of field
operations in some of the nation's largest cities, including New York,
Washington and Atlanta.

In responses to questions from The Post, the DEA said in a statement
that former employees must follow the law and ethics regulations in
taking jobs in the private sector.

"Many who serve in government possess expert knowledge in a wide
variety of fields. It is not uncommon for former government officials
to use or rely on such expertise when they transfer to the private
sector following their public sector service," DEA spokesman Rusty
Payne said in the statement. "Employees who leave DEA and other
government agencies for private sector work are expected to abide by
the applicable laws and ethics rules that govern their private sector

At least five of the 31 DEA employees were hired by McKesson -- the
nation's largest drug distributor and fifth-largest corporation.
McKesson has been the subject of two publicly disclosed DEA
enforcement actions, which resulted in $163 million in fines after
allegations that the firm failed to report hundreds of suspicious
orders for millions of pain pills from Internet pharmacies and others.

"McKesson has put significant resources towards building a
best-in-class controlled substance monitoring program to help identify
suspicious orders and prevent prescription drug diversion in the
supply chain," the company said in a statement. "It is only natural
that this team is comprised of a broad range of experts, including
individuals who have spent time at DEA, as they bring deep knowledge
of effective strategies to prevent diversion. Our team is deeply
passionate about curbing the opioid epidemic in our country."

The Post contacted a dozen former DEA officials who went to work for
the drug industry, but few agreed to be interviewed. Those who did
said they followed federal ethics guidelines designed to prevent
potential conflicts of interest for officials who switch from
government to the industries they once regulated.

"I don't feel like I took off the white hat and put the black hat on,"
said Larry P. Cote, who left as the associate chief counsel for the
DEA's diversion division in May 2012 to become a partner at the law
firm Quarles & Brady. "That's really not what's going on. It's trying
to get the best people in place to make sure that companies are
staying compliant. And frankly, that benefits the DEA as much as it
benefits the companies."

At Quarles & Brady, Cote serves as co-director of the firm's DEA
Compliance and Litigation Practice Group and provides legal advice to
some of the nation's largest pharmaceutical companies.

Cote said he obtained an ethics opinion from the DEA that advised him
on which cases he could and could not handle in the private sector.

Ethics experts said revolving-door issues have been a long-standing
concern across the government, with some of the most notable cases
coming from the Defense Department. President-elect Donald Trump
recently criticized the revolving door at the Pentagon, saying
high-ranking officials "should never be allowed to go work" for
companies in the defense industry.

The ethics experts said the number of officials switching sides at the
DEA raises serious questions about whether the ability of the
diversion division to carry out its mission has been compromised by
the pharmaceutical industry.

"The findings that so many DEA officials have switched from their
roles preventing, detecting and investigating illegal drug use to
working for those involved in the supply chain is disturbing," said
Scott H. Amey, general counsel for the Project on Government
Oversight, a watchdog group in Washington. "It's also another reminder
of how well the revolving door is greased and how the revolving door
can negatively impact government operations. It's not a surprise that
DEA isn't as vigilant as it once was when so many ex-feds are working
for the companies that they once investigated."

In 2004, DEA officials became alarmed by the increasing number of
overdose deaths. The following year, the agency's diversion division
launched an initiative designed to hold distributors of narcotics
accountable for the hundreds of millions of pills that were being
diverted to the black market.

The DEA pursued cases against some of the largest opioid distributors
in the country, including McKesson, Cardinal Health and
AmerisourceBergen, as well as CVS and Walgreens, which distribute
opioids to their own pharmacies. In general, the companies did not
admit wrongdoing and said they were taking steps to address illegal

In 2008, McKesson settled one of those cases, paying a $13 million
fine without admitting liability. That same the year, the DEA filed a
case against Cardinal. That company also settled, paying a $34 million
fine. Cardinal promised to improve monitoring of its drug shipments.

The DEA's initiative was sharply curtailed in the face of pressure
from the pharmaceutical industry beginning in 2013, according to a
Post investigation published in October. In fiscal 2011, civil case
filings against distributors, manufacturers, pharmacies and doctors
had reached 131. By 2014, they had fallen to 40.

The slowdown came after DEA lawyers began to require a higher standard
of proof before cases could move forward. Supervisors in the field
said they were frustrated that their cases were being stalled at DEA
headquarters. Top DEA and Justice Department officials have declined
to discuss the reasons behind the slowdown.

Government ethics experts said regulators often join the industries
they oversee, lured by substantially higher salaries.

"That high rate of turnover makes you really wonder whether those
officials were acting in the interests of the DEA rather than the
companies they were regulating," said Craig Holman, an expert on
revolving-door issues for Public Citizen, a government watchdog group
in Washington. "Just by seeing your colleagues going that way, that
tells you that you can shape your future employment prospects if you
behave accordingly."

Once senior employees leave for jobs in the industry, they are in
positions to help pharmaceutical companies comply with the complex
laws and regulations that govern controlled substances. But ethics
experts said they also can exploit weaknesses they are aware of within
the DEA.

One of the key players in the DEA's diversion initiative went to work
for a law firm that represents the companies he used to regulate.

D. Linden Barber, who served as associate chief counsel from 2006 to
2010, guided cases against some of the largest pharmaceutical
companies in the country.

In 2008, Barber's office filed its first diversion case against
Cardinal, accusing it of failing to properly monitor shipments of
painkillers. Barber conducted extensive meetings with DEA attorneys
assigned to the case and was deeply involved in crafting a "memorandum
of agreement" to settle the allegations against Cardinal, according to
a DEA document. The case resulted in the $34 million settlement with

In September 2011, Barber, who had been serving as the DEA's regional
diversion counsel in the Midwest, left for the law firm Quarles &
Brady. His colleague, Larry Cote, had taken over as associate chief
counsel at DEA headquaters.

The next month, the DEA served warrants seeking records from Cardinal
as part of a second case against the company.

Quarles & Brady's clients include Cardinal.

Seven months later, in May 2012, Cote, who helped to coordinate the
second Cardinal case while at the DEA, joined Barber at Quarles &
Brady, becoming the co-director of compliance and litigation. Cote had
appeared in court on behalf of the DEA in the case against Cardinal
three months earlier, records show.

Barber said he sought advice from Roberto D. DiBella, the DEA's ethics
lawyer, before and after leaving the agency. Barber declined to say
whether he asked DiBella for advice about representing Cardinal, but
he said his representation of his clients complied with ethics laws.

"The rules governing my work as an attorney make it inappropriate for
me to discuss work I did for DEA and any other clients," he said in a
statement to The Post. "However, the records of DEA will show that I
followed the rules. I never worked on a matter for DEA and then worked
on the same matter for the other party. I am proud of the work I did
for DEA and of the work I do in private practice for clients who want
to work with DEA to stop the abuse of prescription drugs."

The DEA provided The Post with a copy of DiBella's ethics opinion. It
shows that Barber asked for guidance on his representation of
Cardinal. DiBella told him that he was banned for life from
representing Cardinal on any issues connected to the 2008 memorandum
of agreement (MOA).

"Your representation of Cardinal to address an alleged violation of
the MOA would on its face appear that you switched sides on a matter
that you participated in as a DEA employee," DiBella wrote.

DiBella did not respond to interview requests. The DEA said the ethics
opinion was reviewed by DiBella's supervisor to double-check the
advice Barber was given.

Cote said he also asked DiBella for an ethics opinion before leaving
the agency in 2012.

"I provided him with a fairly comprehensive list of the cases that I
worked on," he said in a recent interview.

The DEA provided a copy of the opinion to The Post. It noted that Cote
had participated "personally and substantially" in specific matters
relating to at least 10 companies while he was at the DEA. It said he
was banned for life from communicating with or appearing before the
DEA or any other federal agency on behalf of those companies on the
specific matters he handled.

The companies include some of the largest drug distributors and
retailers in the nation, including McKesson, AmerisourceBergen, CVS,
Walgreens, Rite Aid and Walmart.

Cote said he has followed the opinion, which also singled out his work
for the DEA on the Cardinal case.

"I did not and really have not represented Cardinal since I left DEA,"
Cote said. "Our firm does do work for Cardinal, but I've been really
walled off from it because some of these matters are still pending and
I just didn't want to go there."

Josephine Peterson contributed to this report. She is attached to The
Post's investigative unit through a program at American University.
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