AMERICAN EXCEPTIONALISM

How the World’s Richest Country Ran Out of a 75-Cent Face Mask


Farhad Manjoo 3/25/2020


Why is the United States running out of face masks for medical workers? How does the world’s wealthiest country find itself in such a tragic and avoidable mess? And how long will it take to get enough protective gear, if that’s even possible now?

© Jovelle Tamayo for The New York Times Some health care workers have resorted to sewing their own masks as supplies fall short.

I’ve spent the last few days digging into these questions, because the shortages of protective gear, particularly face masks, has struck me as one of the more disturbing absurdities in America’s response to this pandemic.

Yes, it would have been nice to have had early, widespread testing for the coronavirus, the strategy South Korea used to contain its outbreak. It would be amazing if we can avoid running out of ventilators and hospital space, the catastrophe that has befallen parts of Italy. But neither matters much — in fact, no significant intervention is possible — if health care workers cannot even come into contact with coronavirus patients without getting sick themselves.

That’s where cheap, disposable face masks, eye protection, gloves and gowns come in. That we failed to procure enough safety gear for medical workers — not to mention for sick people and for the public, as some health experts might have recommended if masks were not in such low supply — seems astoundingly negligent.

What a small, shameful way for a strong nation to falter: For want of a 75-cent face mask, the kingdom was lost.

I am sorry to say that digging into the mask shortage does little to assuage one’s sense of outrage. The answer to why we’re running out of protective gear involves a very American set of capitalist pathologies — the rise and inevitable lure of low-cost overseas manufacturing, and a strategic failure, at the national level and in the health care industry, to consider seriously the cascading vulnerabilities that flowed from the incentives to reduce costs.

Perhaps the only way to address the shortfall now is to recognize that the market is broken, and to have the government step in to immediately spur global and domestic production. President Trump, bizarrely, has so far resisted ordering companies to produce more supplies and equipment. In the case of masks, manufacturers say they are moving mountains to ramp up production, and some large companies are donating millions of masks from their own reserves.

But given the vast global need for masks — in the United States alone, fighting the coronavirus will consume 3.5 billion face masks, according to an estimate by the Department of Health and Human Services — corporate generosity will fall short. People in the mask business say it will take a few months, at a minimum, to significantly expand production.

“We are at full capacity today, and increased production by building another factory or extending further will take anywhere between three to four months,” said Guillaume Laverdure, the chief operating officer of Medicom, a Canadian company that makes masks and other protective equipment in factories around the world.

And though some nontraditional manufacturers like T-shirt factories and other apparel makers have announced plans to rush-produce masks, it’s unclear that they will be able to meet required safety standards or shift over production in time to answer demand.

Few in the protective equipment industry are surprised by the shortages, because they’ve been predicted for years. In 2005, the George W. Bush administration called for the coordination of domestic production and stockpiling of protective gear in preparation for pandemic influenza. In 2006, Congress approved funds to add protective gear to a national strategic stockpile — among other things, the stockpile collected 52 million surgical face masks and 104 million N95 respirator masks.

But about 100 million masks in the stockpile were deployed in 2009 in the fight against the H1N1 flu pandemic, and the government never bothered to replace them. This month, Alex Azar, secretary of health and human services, testified that there are only about 40 million masks in the stockpile — around 1 percent of the projected national need.

As the coronavirus began to spread in China early this year, a global shortage of protective equipment began to look inevitable. But by then it was too late for the American government to do much about the problem. Two decades ago, most hospital protective gear was made domestically. But like much of the rest of the apparel and consumer products business, face mask manufacturing has since shifted nearly entirely overseas. “China is a producer of 80 percent of masks worldwide,” Laverdure said.

Hospitals began to run out of masks for the same reason that supermarkets ran out of toilet paper — because their “just-in-time” supply chains, which call for holding as little inventory as possible to meet demand, are built to optimize efficiency, not resiliency.

“You’re talking about a commodity item,” said Michael J. Alkire, president of Premier, a company that purchases medical supplies for hospitals and health systems. In the supply chain, he said, “by definition, there’s not going to be a lot of redundancy, because everyone wants the low cost.”

In January, the brittle supply chain began to crack under pressure. To deal with its own outbreak, China began to restrict exports of protective equipment. Then other countries did as well — Taiwan, Germany, France and India took steps to stop exports of medical equipment. That left American hospitals to seek more and more masks from fewer and fewer producers.

People in the industry assured me they would prepare better next time. “We are laserlike focused to ensure that our health care systems are never in this scenario again,” Alkire told me. “There will be a lot more domestic manufacturing of these products going forward.”

I don’t doubt it — but that we did not plan, as a nation, for this entirely predictable shortage makes me wonder what other inevitable pothole is lurking out there for all to trip over. Getting enough protective gear was among the cheapest, most effective things we could have done to slow down the pandemic. That we failed on such an obvious thing reveals an alarming national incapacity to imagine and prepare for the worst.

We will get enough masks in time for the next disaster. But wouldn’t it be nice, for once, if we prepared for trouble before it hit us in the face?

FOR PROFIT VS FOR PUBLIC GOOD

Trump's refusal to use wartime powers to direct scarce medical supplies has left states fighting it out


By Don Lee and Jennifer Haberkorn, Los Angeles Times
3/25/2020

WASHINGTON — When President Donald Trump invoked emergency war powers last week to fight the coronavirus outbreak, many were hopeful that the federal government would take charge in addressing the nation’s dire shortage of ventilators, protective masks and other critical gear for patients and medical staff.

 © Irfan Khan/Los Angeles Times/TNS Teresa Olivas prepares single face mask bags at Prep and Save store in Upland, Calif. on March 17, 2020. Customers scared of lockdown due to coronavirus cleaned out shelves carrying survival food, hand sanitizer and masks.

But Trump has not made actual use of the powers granted in the Korean War-era law known as the Defense Production Act, even though state governors, health experts and lawmakers of his own party have appealed to the administration to employ that authority to bulk up production of medical equipment and supplies, and just as critically, to ensure that they’re distributed to areas of most urgent need.

Trump’s reluctance to take a more assertive role — instead forcing states to fend for themselves and bid against one another — has created confusion and competition. And it has at times tied the hands of his own administration officials designated to lead the White House response to the pandemic.

The head of the Federal Emergency Management Agency, Peter Gaynor, said Tuesday that he was using the DPA’s allocation provision to procure about 60,000 coronavirus test kits and to take control over their distribution. He said it was the first time such a step had been taken in the battle against the coronavirus.

But later in the day, Trump seemed to disavow the actual use of the law. And by Tuesday night, a FEMA’s press secretary, Lizzie Litzow, issued a statement saying, “At the last minute we were able to procure the test kits from the private market without evoking the DPA.”

Among its provisions, the act authorizes the government to ensure that its orders for critical material get first priority from producers. While the DPA does not empower the government to take ownership of companies, it was used during the Korean War to regulate production and prices of some vital materials produced by private companies. Proponents of the act want Trump to use it now to direct factories to ramp up production of needed medical supplies and to prevent price-gouging.

Trump last week gave formal notification that he was prepared to use the law, designating ventilators and personal protective equipment as necessary, but he has since insisted his administration has not needed to use the full weight of the law, saying he didn’t want to nationalize American businesses.

“Private companies are heeding our call to produce medical equipment and supplies because they know that we will not hesitate to invoke the DPA in order to get them to do what they have to do.,” Trump said at a coronavirus briefing Tuesday.

“It’s called leverage. You don’t have to use it. … But the threat of it being there is great leverage, and companies are doing as we ask. … They’re coming through and they’re calling us.”

The status of the 60,000 test kits — a fraction of what’s needed — was unclear. Gaynor did not identify the company or companies from which FEMA was buying the kits. But he told CNN early Tuesday — before the about-face — that FEMA would be using the law “for the first time today … to get our hands on” those kits to allocate them where they’re most needed.

A growing number of lawmakers from both parties have been pushing Trump to make use of the law’s broad authority given the scarcity of ventilators, medical masks, gowns and other protective gear in areas where the need is greatest.

“I don’t want to see doctors having to make a choice of who gets to live and who has to die because they don’t have the equipment to save their lives,” said Sen. Ted Cruz, R-Texas, on his podcast.

“If we wake up two weeks from now and instead of 11,000 cases, we have 200,000 cases or a million cases, it might be too late then,” Cruz said.

Sen. Michael Bennet, D-Colo., said he was glad Trump invoked the act last week but disappointed it hasn’t been put into effect.

“Instead of using them, he’s equivocating,” he said Monday, citing Trump’s remarks that companies are voluntarily boosting production. “We don’t have 18 months. It’s literally life and death.”

Some lawmakers have become so frustrated that they’ve introduced a bill demanding the act’s usage in the hopes of expediting the production of medical equipment. The bill would require a purchase order of 300 million medical N95 masks and other personal protective equipment, and that the National Response Coordination Center conduct a national assessment on current medical supply needs and fill in missing gaps.

“The shortage of medical supplies like masks and ventilators in hospitals in California and across the nation is unacceptable. It’s past time the president ensures health care workers have the supplies and resources they need to protect themselves and combat the coronavirus pandemic,” said Sen. Kamala Harris, D-Calif., who with Tammy Baldwin, D-Wis., introduced the bill.

The administration’s strategy of invoking but not using the wartime power appears in part designed to meet its political needs. At Tuesday’s briefing, for example, Vice President Pence did not directly contradict Gaynor’s comments but said that “at this point no one said no” to federal requests or orders.

Trump’s public posture aligns with that of many conservatives and the U.S. Chamber of Commerce, the most powerful voice of corporate America, which dismisses the need for such government intervention.

Private companies have stepped up on their own to increase production and, where they can, to modify operations to make products that are needed, the chamber said.

The idea that “the government would do a better job in building all of this stuff and distributing it … is a hard claim to defend given the government’s track record,” said Neil Bradley, chief policy officer at the chamber.

“The folks who actually know how to build things are raising their hand and saying, ‘We can do it.’ That’s happening right now. Companies are doing this,” he said.

But switching from normal operations to meet a sudden emergency requires businesses to spend money on new equipment and other needs.

In the past, companies have been reluctant to make such new investments quickly and on their own when they could not be sure they could recover those expenses. The DPA permits the government to give guaranteed loans or install equipment to protect the companies financially.

It also allows the government to control sales and distribution of the new products, to set priorities and assure that supplies go where the need is greatest.

The Trump administration has highlighted a number of companies that have come forward on their own. Pence said Apple was donating 9 million N95 protective masks for health care professionals.

Others like General Motors and Ford are using their manufacturing capabilities to help boost production of medical equipment such as ventilators, respirators and face shields, although it will take two to three months for some of the products to roll out of the factory.

“I think they are responding to market needs. It’s in their financial interest to do so,” said Joshua Aguilar, a Morningstar analyst, referring to 3M’s plan to double the production of N95 masks over the next year.

But many state officials, medical experts, and economists have been skeptical that relying on volunteers and market forces would assure that production of emergency supplies were produced quickly enough or in sufficient volume to meet the need. Governors have urged the administration to take control of the distribution of vital medical supplies and stop bidding wars.

New York Gov. Andrew Cuomo has grown increasingly angry as COVID-19 cases have exceeded 26,000 in his state, about half of the infections recorded in the United States. On Tuesday he lashed out at the Trump administration’s failure to use the DPA, saying the law was made precisely for a time like now.

“When we went to war, we didn’t say, ‘Any company out there want to build a battleship? … Maybe a couple of you guys can get together and build a battleship … maybe, you think?’” he said, dripping with sarcasm. “That’s not how you did it. The president’s said it’s a war. It is a war. Well, then, act like it’s a war.”

Cuomo said that New York has received only 400 ventilators from the federal government. “FEMA says, ‘We’re sending 400 ventilators.’ Really? What am I going to do with 400 ventilators when I need 30,000?”

Jamie E. Baker, former legal adviser to the National Security Council and a professor at Syracuse University, said: “If there is a gap between voluntary production and what is needed, or anticipated to be needed, the DPA is the mechanism to close that gap.”

Before the abrupt reversal by FEMA, its chief, Gaynor, said Tuesday that the agency planned to use the wartime powers also in the production of 500 million face masks, inserting DPA provisions into contracts with companies providing the masks.

One of the companies that is waiting to sign a contract with FEMA is Los Angeles Apparel, a South-Central clothing maker that is part of a consortium, including HanesBrands and Parkdale Mills. The companies are teaming up to produce masks, though not the medical kind needed for front-line health care professionals.

Dov Charney, Los Angeles Apparel’s founder, said he has a preliminary agreement with FEMA to produce an as-yet undetermined amount of washable masks for what he expects will be about $2 apiece.

Charney said his 500-employee operation, which makes sweatshirts, T-shirts and other apparel, already has sold or given away more than 30,000 masks.

He said he expected face masks to be a long-term product line for the company. And he welcomed a contract with FEMA, with a guaranteed purchase price.

“I think there’s a profit in all this,” he said.

———

©2020 Los Angeles Times

Regrowing Australia's forests may require human intervention

Adam Wernick PRI 3/25/2020

In Australia, wildfires have burned through massive forests of mountain and alpine ash — some of the tallest trees in the world. These trees aren’t naturally equipped to deal with frequent fires and are struggling to grow back on their own. But humans are helping to give them a shot at recovery.

© Owen Bassett/Forest Solutions

A helicopter sowing alpine and mountain ash seed into the ash of a recent bushfire.

With no intervention, these ravaged forests, located primarily in Southeast Australia, would eventually turn into a different type of ecosystem, like savanna or grassland. Owen Bassett, of Forest Solutions, is not ready to let that happen. For years, he has collected seeds from these trees and manually replanted them in an effort to rebuild the forest.


Related: Thousands flee fires in Australia, navy helps evacuate the stranded

Because these species are obligate seeders — that is, they can regenerate after fire only from seed and not from their trunks — “if we have enough seed and we have the means to spread that seed where the forest is going to experience population collapse, then we can intervene, lay seed on the ground, and these forests will return,” Bassett explained. “But it's easier said than done. We have to collect the seed and we have to distribute the seed, and that's a mammoth operation.”

© Owen Bassett/Forest Solutions

 Mountain ash trees can grow as tall as

 80 meters. Owen Bassett/Forest Solutions

Mountain ash is the tallest flowering plant in the world, Bassett said. In the last 20 years, these forests have burned, on average, every four years. The trees need at least 20 years of growth to be able to reproduce because young trees don’t flower.

“These four year intervals [between fires] are just too quick, and where you get these fires overlapping, then the species is in big trouble,” Bassett said. “We're experiencing that now in Australia. Forests are at the stage of population collapse. Classically, it occurs in species like alpine ash and mountain ash that require much longer periods of fire intervals to survive.”

Related: 1 billion animals have died in Australian bushfires, ecologist estimates

Bassett has been monitoring the flowering of these species for 26 years. Every year, he maps the distribution of their flowering from a light aircraft, he explained. Once trees have flowered, he marks their location in the landscape. One year later, he can expect these trees will have seed.

At that point, Forest Solutions sends teams of climbers in to scale the 262-foot tall trees and de-limb about a third of the branches on them. “We keep the tree healthy; we keep the growing tip in place,” Bassett said. “We take just a section of that crown out and from that, we can pick the seed pods. They're sent away and the seeds are extracted from … those pods.”

The seeds are tiny, about the size of coarse pepper, Basset added. “It’s extraordinary to think that such a tall tree, something akin to California redwoods, comes from this tiny piece of cracked pepper-size seed.”

Reseeding requires about a pound per acre, Bassett said. The seed is put in a hopper inside a helicopter and spun out the bottom of the aircraft as it flies. The swathe of seed is only 20 meters wide — about 60 feet.

“In this huge expanse of burnt landscape, you get this picture of the helicopter having to go up and back, up and back, up and back, many, many times to cover that huge amount of area,” Bassett said.

“Because I'm actually expecting [to reseed] up to 10,000 hectares — that’s like 25,000 acres or something. So it's a massive operation.”

In many areas, young regrowth from earlier fires has burned again. So, Bassett is now wondering if they should even keep trying. “We're re-sowing sites now that burned four or five years ago, and we've always struggled with having enough seed, and this year that's probably a major challenge — insufficient seed to sow this huge area that we're expecting to have to sow.”

Bassett has been pressing Australia’s federal government for years to establish a seed bank, but it has only funded small seed collection operations in reaction to fire outbreaks, rather than gather seed steadily and store it away.

“We needed 10 tonnes of seed this year,” Bassett said. That's the equivalent of about 22,000 pounds of seeds. “At the moment, we might have a third, maybe a half, of that. … It's very frustrating. But, at this stage, we battle on.”

“The question is really — it sounds a bit corny — do we want these forests for our grandchildren? And yes, I do. Yes, we do,” Bassett said. “That's the cry from Australia — that we want to save these forests. We want these tall forests. We want our grandchildren to be able to walk under them. That's what drives us. That's the passion, if you like, to get these forests regenerated.”

This article is based on an interview by Bobby Bascomb that aired on Living on Earth from PRX.

https://www.msn.com/en-us/news/causes-disaster-relief/regrowing-australias-forests-may-require-human-intervention/ar-BB11H8aF?li=BBUPk4T

Can Grocery Delivery for the Poor Soar in the Coronavirus Era?

SOUTH AFRICA

As the Imizamo Yethu informal settlement in Cape Town was engulfed by flames one night in March 2017, Jessica Boonstra watched from her home nearby. “It was so close I could hear their screams,” she remembers. With government intervention sorely lacking, Boonstra, 43, volunteered with the local Thula Thula relief organization. Using her retail and logistics background, she developed an app to register people in need. Within days they had developed an emergency supply chain that could feed 15,000 people “in a fairly orderly fashion.”

© Provided by Ozy 1H5A9157

A few months later, she gathered a few of the people who’d been instrumental in the relief efforts. “We’ve showed that this is possible as a charity,” she told them. “What’s stopping us from doing it as a business?”

Yebo Fresh, the one-of-a-kind online retailer born out of the ashes of those fires, gives its 1,000 clients (and counting) across seven informal settlements in Cape Town the chance to enjoy twice-weekly grocery deliveries. With prices comparable to those in brick-and-mortar stores and no delivery fee on large orders, the service is saving women (it’s almost always women) as much as $7 in public transport costs per order and freeing up entire Saturdays (it’s almost always Saturday) that would previously have been spent scouring the city for the best deals. 

Until now, the company has been focusing on perfecting its model, but the declaration of a COVID-19-inspired State of Disaster has forced Boonstra to put Yebo Fresh’s business model to the test sooner than planned. Thirty million South Africans live in areas not serviced by mainstream grocery retailers. “This could be our finest hour or a total disaster,” she says, clearly a little daunted by the fact that next week’s order will be 10 times bigger than any the company has ever attempted. (They’ve even had to rent a second warehouse.)

Mark Forrester — founder of the WooCommerce plugin used by Yebo Fresh and one of Boonstra’s seed investors — has no such doubts. “I saw fantastic opportunity when I first looked at Jessica’s skill set, a wonderfully creative, Africa-centric use case of our e-commerce platform, and her agile business model,” he says. “I have no doubt her business can step up to the challenge of feeding Cape Town’s most vulnerable people during this crisis.” They aim to squeeze profits from a lower overhead, with no retail space, only 10 full-time staff and deliveries just twice a week.

Growing up in a tiny seaside village in the Netherlands in a family of problem-solving engineers, Boonstra stood out from her more pragmatic relatives by always being “the one who wanted to save birds who flew into windows.” But she is no pie-in-the-sky idealist. After completing a degree in technology and policy (which included an internship in Tanzania, where she fell “head over heels” in love with Africa), she landed a job at energy giant Shell. Seven years later, she was recruited by Dutch retailer Albert Heijn, which soon had her leading its online business development — a task she performed with such aplomb that the company is now head and shoulders above the online competition in the Netherlands.

Despite all the career success, something was missing for Boonstra and her husband. “Any chance we got, we’d put the [three] kids in their backpacks and head to Africa,” she says. In 2014, they took a four-month sabbatical to Ethiopia, and it was there — sitting atop a mountain — that they decided to make a permanent move to the continent.

Within months, they’d quit their jobs and moved to Cape Town. “We were very optimistic,” remembers Boonstra. “I had retail skills, my husband was a solar energy expert, we’d both been headhunted all over the place in Holland.” Yet after a year and a half of job hunting, they had to start selling off their kids’ Legos. Eventually, hubby René Laks found employment with a solar firm and Boonstra landed consulting gigs with clients ranging from momtrepreneurs she’d met in the school parking lot to multinational retailers. (In between all of this, she found the time to make Buzzer, a security app that has already saved a few lives.)

While consulting with several big retailers, she was struck by their seemingly unanimous fear of the mass market. “No one disputed the size of the opportunity,” recalls Boonstra. “But they all saw it as too messy [no money] and too dangerous.” Instead, they focused their online attentions on the middle class and left poor South Africans to continue shopping the way they’d always done — using expensive public transport to traipse around cities designed according to apartheid, with most stores in formerly whites-only areas.

Which brings us to Yebo Fresh’s debut after the 2017 fires. The company now operates from a warehouse near the airport and eight of the core team of 10 actually live in the communities it serves. “Jessica treats us like family and she always asks for our input,” says Faith Depa, Yebo Fresh’s customer service manager. Depa’s fingerprints are all over the company’s catalog, for example, which is big on the kind of combo deals that appeal to their clientele. 

It also combines low and high tech seamlessly. Orders can be completed on old-fashioned paper checklists taken from door-to-door sales agents, via WhatsApp or through a conventional website — but they’re all digitized and synced with a payment gateway. Most customers prefer to pay upon receipt, using debit cards or cash (not encouraged, for safety reasons).

Of course, there have been challenges. “Some people were even scared of being robbed by the driver,” says Depa. “But the more time we spend walking the streets, the more they trust us.” The team also has to meet customers’ extremely high expectations. “In the beginning, I thought it would be all about price,” Boonstra reflects. “But if you only have enough cash for five onions, you can’t afford to pay for a rotten one.”

All these lessons, Boonstra reckons, only serve to make the company stronger. “At the moment, we are just trying to keep up with demand in Cape Town during the coronavirus,” she says. “But there’s a whole continent of people facing the same weekly issues. The problem is just gigantic.”

https://www.msn.com/en-us/news/causes/can-grocery-delivery-for-the-poor-soar-in-the-coronavirus-era/ar-BB11F4Ea?li=BBUPk4T

Walmart Was Almost Charged Criminally Over Opioids. Trump Appointees Killed the Indictment.

by Jesse Eisinger and James Bandler 3/25/2020 © Prvidoed by ProPublica

LONG READ FEATURE LENGTH INVESTIGATIVE REPORT 

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On a Tuesday just before Halloween in 2018, a group of federal prosecutors and agents from Texas arrived in Washington. For almost two years, they’d been investigating the opioid dispensing practices of Walmart, the largest company in the world. They had amassed what they viewed as highly damning evidence only to face a major obstacle: top Trump appointees at the Department of Justice.

The prosecution team had come to Washington to try to save its case. Joe Brown, the U.S. attorney for the Eastern District of Texas, led the group, which included Heather Rattan, an over-20-year veteran of the office who had spent much of her career prosecuting members of drug cartels.

They first went to the Drug Enforcement Administration’s headquarters to meet the acting administrator, Uttam Dhillon. There Rattan laid out the evidence. Opioids dispensed by Walmart pharmacies in Texas had killed customers who had overdosed. The pharmacists who dispensed those opioids had told the company they didn’t want to fill the prescriptions because they were coming from doctors who were running pill mills. They pleaded for help and guidance from Walmart’s corporate office.

Investigators had obtained records of similar cries for help from Walmart pharmacists all over the country: from Maine, North Carolina, Kansas and Washington, and other states. They reported hundreds of thousands of suspicious or inappropriate opioid prescriptions. One Walmart employee warned about a Florida doctor who had a “list of patients from Kentucky that have been visiting pharmacies in all of central Wisconsin recently.” That doctor had sent patients to Walmarts in more than 30 other states.

In response to these alarms, Walmart compliance officials did not take corporate-wide action to halt the flow of opioids. Instead, they repeatedly admonished pharmacists that they could not cut off any doctor entirely. They could only evaluate each prescription on an individual basis. And they went further. An opioid compliance manager told an executive in an email, gathered during the inquiry and viewed by ProPublica, that Walmart’s focus should be on “driving sales.”

After they finished their presentation, Dhillon sat back in his chair and exclaimed, “Jesus Christ,” according to five people familiar with the investigation. “Why aren’t we talking about this as a criminal case?”

That’s precisely what had occurred seven months earlier: Rattan had informed Walmart that she was preparing to indict the corporation for violating the Controlled Substances Act. Indictments of Fortune 500 companies are unheard of, let alone of one with $500 billion in annual revenue and over 2 million employees. But Rattan, with support from her boss Brown, believed the evidence justified such an unprecedented step.

Before the Texas prosecutors could file their case, however, Walmart escalated concerns to high-ranking officials at the DOJ, who then intervened. Brown was ordered to stand down. On Aug. 31, 2018, Trump officials officially informed Walmart that the DOJ would decline to prosecute the company, according to a letter from Walmart’s lawyer that lays out the chronology of the case.

Vice President Mike Pence wants the private sector to donate critical medical supplies to help during the coronavirus pandemic. But the White House’s chaotic requests have not included consistent information on how exactly businesses can do that.

But the Texas prosecutors hadn’t given up. Now, two months later, they still thought they had a chance to bring the then-deputy attorney general, Rod Rosenstein, and other top officials around. After the first presentation at the DEA offices that day, the Texas group — now accompanied by the DEA’s Dhillon — caravanned over to the DOJ.

They filed into a big, bright conference room, where they were received by Rosenstein and a collection of political appointees and career staff. Rattan and her team were given a half-hour to make their presentation. She explained that dispensing opioids without a legitimate medical purpose is legally akin to dealing heroin. Criminal law says if a person or entity is willfully blind or deliberately ignorant, they are as liable as if they had acted intentionally. Once Walmart’s headquarters knew its pharmacists were raising alarms about suspicious prescriptions, but the compliance department continued to allow — even push — them to fill them, well, that made the company guilty, the Texas prosecutors contended.

This was not a question of a few rogue employees, Rattan explained. Walmart had a national problem. Worse, the prosecutors contended, the company was a repeat offender. Walmart had agreed to a settlement with the DEA seven years earlier in which it had promised to improve its controls over the abuse of opioid prescriptions. Still the problems persisted. That’s why the prosecutors believed they needed to pursue the extraordinary path of a criminal prosecution. As they concluded, Brown was emphatic, telling Rosenstein: “We have to act.”

A fine would not be a sufficient deterrent, the DEA’s Dhillon added, since Walmart “has more money than it knows what to do with.”

“Not that there’s anything wrong with that,” Rosenstein responded, according to five people familiar with the investigation. “We are all capitalists here.”

Rosenstein’s quip brought the prosecutorial team up short. They weren’t pursuing Walmart because it was profitable but because, in their view, the company had put its customers at deadly risk.

Not long after, Rosenstein’s assistant entered the room to say he had a call. He left. The prosecutors’ push to persuade Rosenstein to revive the criminal case had failed.

© Provided by ProPublica

Still, there were multiple avenues left to pursue: After the meeting, the Texas prosecutors focused on bringing criminal charges against individual employees, as Rosenstein and other Trump DOJ officials directed them to do. But later, when the prosecutors sought to indict a mid-level Walmart manager, the Trump officials blocked that, too.

That left potential civil claims. After the meeting with Rosenstein, Brian Benczkowski, the head of the criminal division, had told Brown, “You have a whopper of a civil case,” according to four people familiar with the investigation.

But the civil case, too, was stymied by Trump appointees in the DOJ who continued to side with Walmart.

In its dealings with the DOJ, Walmart pursued a classic strategy. It relied on Jones Day, an influential law firm that has salted officials throughout the Trump administration. Walmart conceded mistakes and opened the door for a civil settlement. But the company consistently denied that any of its employees committed crimes.

In the view of many prosecutors and agents, Walmart never fully cooperated. (From the beginning of the investigation, Walmart said it was cooperating and taking action to fix its opioid dispensing practices. Still, the company acknowledged that it halted its cooperation in mid-2018 after it became convinced prosecutors were not acting in good faith.)

And Walmart and Jones Day added a Trumpian tactic: At a moment when the president had established a habit of attacking the investigators in his own government, the company followed a similarly aggressive approach. Walmart lawyers complained to Washington about the Texas prosecutors, accusing them of seeking to “embarrass” the company while using the threat of criminal charges to extort a larger civil fine. Criminal and civil investigations can run in parallel, but it’s an ethical violation for prosecutors to use the threat of criminal penalties to generate a higher civil settlement.

In a statement to ProPublica, Walmart spokesman Randy Hargrove reiterated the company’s complaints: “The United States Attorney’s Office for the Eastern District of Texas (EDTX) engaged in misconduct multiple times as it investigated Walmart, including threatening to bring meritless criminal charges against Walmart in order to extort an unjustified civil settlement from the company. This behavior was clearly improper, violated the Department of Justice’s own internal policies and rules of legal ethics, and was entirely inconsistent with the Department’s long-standing policies.”

Hargove added that having failed to bring “baseless” criminal charges against the company, “It appears that one or more individuals familiar with EDTX’s investigation have violated Department of Justice rules in an attempt to achieve through leaks what they could not accomplish in a court of law.”

In response to the Walmart statement, the U.S. attorney, Brown, offered his own to ProPublica: “Drug Enforcement Agency investigations of multiple opioid overdose deaths in the Eastern District of Texas resulted in our office opening parallel civil and criminal investigations of Walmart’s pharmacy practices. These investigations have been handled appropriately, and according to Department of Justice policy. These investigations, which we would typically not confirm or deny, but do so now because of Walmart’s statement, continue. Accordingly, it would be inappropriate to comment further on the specific facts of the case.

“Walmart chooses now to attack the investigators, a tried and true method to avoid oversight. We are confident that once all of the facts in this matter are public the hollowness of this criticism will be apparent. It is not the goal of our office to embarrass Walmart. Walmart’s behavior in dispensing opioid medication in the middle of a public health crisis should embarrass Walmart.”

Walmart’s ability to go over the heads of the Texas office left the U.S. attorney’s team profoundly frustrated — so much so that the lead civil prosecutor on the case resigned in protest on Oct. 25, 2019. “I deeply regret that Department leadership prevented EDTX from filing its lawsuit in 2018,” Joshua Russ, then the head of the Eastern District’s civil division, wrote in his resignation letter, a copy of which (with Walmart’s name blacked out) ProPublica obtained. “Corporations cannot poison Americans with impunity. Good sense dictates stern and swift action when Americans die.”

The investigations of Walmart have not been previously reported. This account is based on hundreds of pages of Walmart internal emails and investigative documents, correspondence between the company’s attorneys and the Justice Department, and interviews with nine people familiar with the investigation. All of the conversations described in this article were recounted either in those documents or by multiple people with knowledge of the conversations. The DOJ declined to make anyone available for interviews and did not answer an extensive list of questions.

The news of the Walmart investigation comes at a time when the Trump administration is being assailed for legal favoritism and cronyism. Attorney General Bill Barr has inserted himself into multiple investigations of Trump friends and associates. In February, four prosecutors on the case of Roger Stone, a Trump friend and adviser, quit the case in protest after political appointees undercut their sentencing recommendation.

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The Trump DOJ has also pulled back on white-collar and corporate investigations and prosecutions. White-collar prosecutions are at a record low. Walmart itself seems to have already benefited from the Trump administration’s approach to corporate misconduct. The company was the subject of a seven-year investigation into bribery allegations in Mexico and around the globe. The Obama administration sought $600 million in fines, according to The New York Times, which broke the story, but failed to reach a resolution with the company. The Trump DOJ settled the charges for $282 million in June 2019. (“Walmart took the investigation very seriously, cooperated with the DOJ and the SEC’s investigation, and took extensive steps that have established its comprehensive Global Anti-Corruption Program,” the company said.)

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Even as Trump’s DOJ was preventing its own prosecutors from getting tough on Walmart, the Trump administration told the public it was confronting the nation’s opioid crisis. In March 2018, Trump said his administration would hold those responsible accountable, pledging that federal lawsuits against opioid drugmakers “will happen.” The same month that Rosenstein declined to revive the criminal case against Walmart, Trump signed legislation aimed at curbing the opioid crisis. A key element was a public-private partnership with several companies, including Walmart, to implement measures such as opioid addiction education initiatives. “Together we are going to end the scourge of drug addiction in America,” Trump said. (This month, Walmart CEO Doug McMillon appeared in the White House’s Rose Garden to pledge the company’s help in combating the coronavirus.)

For those who spent years investigating Walmart, the chasm between the public posturing and the behavior behind closed doors has been deeply discouraging. By the end of the experience, one said: “I wanted to ask for a Walmart greeter badge. It’s got much more stroke than a DEA badge.”

The case against Walmart originated in the summer of 2016, with an investigation of two Texas doctors, Howard Diamond and Randall Wade, who were prescribing opioids on a vast scale. Prosecutors would link each to multiple deaths. The lead prosecutor on the criminal case, Rattan, made it clear to the DEA agents on the case that this should be run like any drug investigation. They should focus on cutting off the dealers’ sources of drugs.

One of those was Walmart. In August, DEA agents, surveilling Wade’s clinic, followed three women to a Walmart in McKinney, Texas. Shortly afterward, all three walked out with large quantities of painkillers.

On Dec. 7, 2016, DEA agents raided that Walmart, seeking records about Diamond and Wade. The two doctors were eventually convicted of illegal distribution of opioids, with Wade sentenced to 10 years in prison and Diamond 20 years.

Walmart has the fifth-highest pharmacy revenue in the country and was the fifth-largest opioid distributor in Texas from 2006-14, according to the DEA. But Walmart pharmacies had not been raided before; raids of Fortune 500 companies are exceedingly rare. Alarmed, Walmart’s lawyers quickly asked the government to conduct no more raids and pledged full cooperation.

The Texas prosecutors broadened their investigation and began to amass evidence that extended far beyond Diamond and Wade. Between 2011 to 2017, they discovered, Walmart pharmacists repeatedly filled prescriptions that they worried were not for legitimate medical purposes, including large doses of opioids and mixtures of drugs the DEA considered red flags for abuse. Walmart pharmacists not just in Texas but in Maine, North Carolina, Massachusetts, Kansas and Washington state raised alarms to the company’s national compliance department about doctors.

Sometimes, these pharmacists requested permission to stop filling opioid prescriptions for certain doctors. In February 2015, a pharmacist wrote to the national compliance department about Diamond:

“We are all concerned about our jobs and about filling for a pill mill doctor. I’m in my 29th year with walmart and have never had a situation this bad with a doctor. Other chains are refusing to fill for him which makes our burden even greater. Please help us.”

Another wrote that same month:

“doctor Diamond is a problem and a liability on us...

Filling for him is a risk that keeps me up at night. This is a serious situation.”

But even after more than a decade of soaring addiction and deaths had transformed opioids into a national crisis, Walmart had a policy that pharmacists could conduct no “blanket refusals” that shut off prescriptions written by a particular doctor. Nor would Walmart put doctors on a prohibited list from headquarters, known as a “corporate block.”

Some of Walmart’s competitors had stopped filling Diamond’s and Wade’s prescriptions, company pharmacists told headquarters. Why wasn’t Walmart doing the same? In February 2014, for example, Kroger sent a letter to Diamond saying it would no longer fill his controlled substances prescriptions. Walmart pharmacists were telling headquarters that CVS, Walgreens and Target were doing the same. (A CVS spokesman said the company implemented a policy of corporate blocks several years ago but, citing privacy, declined to comment on whether the policy was applied to Diamond and Wade. Spokespeople for Kroger, Walgreens and Target did not respond to requests for comment. Walmart insists there is no evidence that competitors issued corporate blocks against Diamond and Wade.)

A Walmart pharmacist in September 2016 wrote an alarmed note about a Pennsylvania doctor who was “under investigation by the DEA for what we believe is a pill mill operation.” He added:

“Rite Aid has sent him a blanket denial letter. ...

And since then we have seen our almost solely narcotic and controlled prescriptions from him double....

We are putting pharmacists and Walmart in a bad situation legally....”

Instead of blanket refusals or a corporate block, Walmart’s compliance department said each prescription had to be evaluated separately. To block a prescription and report the refusal, a pharmacist had to fill out a form that could take 20 minutes, a bureaucratic hurdle that pharmacists sought to avoid because they were under pressure to fill prescriptions quickly.

From early 2014 to when Walmart finally blocked Diamond in March 2017 — after the federal investigation had started — the company’s pharmacists filled over 13,000 controlled substances prescriptions from Diamond, an average of 11 a day, according to documents reviewed by ProPublica. That amounted to over 1.3 million doses. Walmart only blocked Wade in November 2016, a month after he was indicted. Between the first Walmart employee’s alarm and then, Walmart pharmacies filled an average of nine controlled substance prescriptions a day written by Wade, amounting to 875,000 doses. Between 2011 and 2016, over 100 different Walmart pharmacies in 17 different states filled Wade’s opioid prescriptions.

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More troubling to the federal investigators, for much of this period, Walmart was operating under a secret settlement, known as a Memorandum of Agreement, with the DEA, reached in 2011 and running four years. (The existence of the MOA has not been previously reported.) According to that agreement, a Walmart pharmacy in California had been filling prescriptions “for other than a legitimate medical purpose and/or outside the usual course of professional practice in violation of federal and state law” and had “dispensed controlled substances to individuals that [the pharmacy] knew or should have known were diverting the controlled substances.”

A decade ago, the government spent more than $1 trillion to bail out companies and stimulate the economy. What have we learned since then?

As part of the agreement, in which Walmart did not admit or deny wrongdoing, the company agreed to install national procedures to identify bad prescribers and prescriptions not written for legitimate medical purposes and report them quickly to the DEA.

In addition, Walmart had repeatedly run afoul of the Controlled Substances Act. The company had received more than 50 “Letters of Admonition” from the DEA for its prescribing practices from 2000 to 2018, according to records obtained by ProPublica. And it had paid two small Controlled Substances Act settlements in 2007 and 2008, one for filling unlawful prescriptions and the other for recordkeeping violations.

Prosecutors believed that Walmart was not fulfilling the terms of its agreement with the DEA. The company had an internal system for compiling pharmacists’ “refusals to fill” that it would send to the DEA. They found that Walmart didn’t always send the DEA its alerts. When the company did so, the notices were not complete. The form included a comments field, where pharmacists might write notes flagging concerns about doctors whom they believed were operating pill mills. Walmart sent the DEA the information that a prescription had been refused but excised the employee comments.

On Feb. 13, 2015, when a regional manager received a list of “Refusal to Fill” prescriptions from headquarters, he asked, “Does your team pull out any insights from these we need to highlight?” according to an email reviewed by ProPublica.

Brad Nelson, then a director of Health and Wellness Practice Compliance at Walmart, wrote back:

“The MOA that requires the reporting of the Refusal to fills expires in 30 days. We have not invested a great amount of effort in doing analysis on the data since the agreement is virtually over. Driving sales and patient awareness is a far better use of our Market Directors and Market manager’s time.”

Walmart maintains that Nelson was expressing relief that the onerous burden of alerting the DEA to its refusals to fill was coming to an end, and that in urging the manager to “drive sales,” he was referring to immunizations. Walmart depicted Nelson as a popular middle manager who was the first in the office every morning. He’d come in at 4:30 or 5 a.m. and spend the next three hours faxing refusals to fill to the DEA. Then he would make popcorn for his colleagues.

On Jan. 8, 2015, Nelson emailed colleagues that a pharmacist had contacted him with concerns, indicating “that he is feeling pressured” by his supervisor to fill prescriptions for controlled substances. If the pharmacist doesn’t fill the prescriptions, Nelson added, “then that would be a significant issue.”

Walmart says this email shows that Nelson was consistent: Pharmacists could not issue blanket refusals but could refuse prescriptions on a case-by-case basis. (Nelson referred questions to his lawyer, who did not respond to repeated requests for comment.)

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After ProPublica’s report that Richard Burr dumped stocks after reassuring the public about coronavirus readiness, he said he welcomed an ethics investigation.

Walmart told the investigators that the evidence the Eastern District compiled was misleading. The company said the DEA never required “corporate blocks” or “blanket refusals-to-fill.” The DEA did not respond to repeated requests for comment for this article.

Meanwhile, some state boards of pharmacy and medical boards protected doctors from being cut off by pharmacies on the grounds that companies should not interfere with the doctor-patient relationship, Walmart says.

For its part, Texas has no rules that would prohibit a pharmacy chain like Walmart from instituting a corporate block or blanket refusal policy, said Allison Benz, executive director of the Texas State Board of Pharmacy.

In Texas, pharmacy chains may, indeed, impose corporate-wide blocks on doctors whom they suspect are running pill mills, according to Sherif Zaafran, president of the Texas Medical Board. Zaafran said the board has told Walmart and other pharmacies that if they have concerns about a doctor, they have a legal obligation to file a complaint with the board while providing information supporting their concerns. “We never weigh in on a corporate block,” he said. “The corporation can instruct a licensed pharmacist to do so. It is the licensed pharmacist who has the legal ability to not dispense something.”

For its part, Walmart says it was taking its responsibilities seriously. The company says it flagged over 60,000 concerning prescriptions its pharmacists refused to fill during the period the investigation covered. It maintains Nelson was vigilant in urging his pharmacists to refuse to fill if they saw prescriptions they did not like, and to fill out the forms so that the company could send the information to the DEA. In the case of Diamond, Walmart says one of its pharmacists alerted the Texas Medical Board of its concerns. The board allowed Diamond to continue practicing medicine, finding that his “prescribing was appropriate.” (It did place him on a “remedial plan” to fix his allegedly sloppy record-keeping.) The board did not revoke Diamond’s license until October 2017, after his arrest.

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The company argues that, as the regulatory entity that licensed doctors to dispense opioids, the DEA, not Walmart, was responsible for the failure to shut down pill pushers like Diamond sooner. After the investigation started, Walmart reversed itself and began instituting corporate blocks, which suggested to prosecutors that the company could have been doing so all along. Since Walmart began the policy, multiple states have assailed and even investigated Walmart for improperly interfering with doctors’ decisions.

The prosecutors did not find Walmart’s many explanations convincing. The fact that the company had sent so many refusals to the DEA for a given doctor and yet would turn around and keep filling prescriptions for the very same sketchy physician suggested the problem was widespread. As far as federal prosecutors and the DEA were concerned, the MOA had placed Walmart on parole — and the company had violated its terms.

In the spring of 2018, the Eastern District of Texas informed Walmart that it was preparing criminal charges against the company. In traditional criminal investigations against individuals, indictments often come as a surprise. The government accumulates evidence and makes its arrest. The defense eventually sees the evidence and can respond then, sometimes only at trial.

Criminal investigations of big corporations don’t typically work that way in the United States. They have developed into a ritualized series of give-and-takes between prosecutors and the company. Prosecutors lay out their evidence and theories and the company gets the opportunity to respond in great detail — all out of public view. The Eastern District of Texas skipped this dance.

Stunned and worried, Walmart requested a meeting with the prosecutors. In April 2018, the two sides sat down.

Walmart had a powerful team. Karen Hewitt, the partner-in-charge of Jones Day’s California region, was the company’s lead outside lawyer. She had been the U.S. attorney in the Southern District of California, appointed by George W. Bush and then serving under President Barack Obama, accumulating a record for prosecuting corrupt politicians and drug and border crimes. Walmart’s inside lawyer was Bob Balfe. Walmart’s chief counsel for global investigations, Balfe also had been a U.S. attorney, serving as the head of the Western District of Arkansas, which includes Walmart’s hometown of Bentonville. In the biggest case of his career, he’d successfully prosecuted a Walmart legend, then-vice chairman Tom Coughlin, for a bizarre embezzlement scheme. Since he’d come to Walmart, Balfe had helped steer the company through the seven-year bribery investigation.

Most of the interactions between the government and the Jones Day lawyers were politely choreographed. Hewitt and Balfe were the picture of affability. “When you meet with them, it’s like those two chipmunks,” said one person familiar with the investigation, referring to the Looney Tunes characters Mac and Tosh, gophers that speak with posh British accents. “‘After you.’ ‘No, after you.’ They are so polite.”

The two sides largely agreed on the facts, but differed completely on whether they justified a criminal charge. And a dispute over the use of a single word would poison relations between the two sides, with Walmart using the word as a cudgel to attack the prosecutors.

The word in question was “embarrass.” According to two people familiar with the prosecution, Rattan told the Walmart side that the company should feel embarrassed by its conduct. Walmart would portray it differently, claiming that Rattan said her goal was “to embarrass Walmart” with a criminal indictment. (Walmart’s account is captured in a letter of complaint Hewitt sent the next month to Deputy Attorney General Rod Rosenstein.)

For the moment, though, the two sides maintained decorum. Walmart asked for 30 days to respond. Prosecutors agreed. On May 3 and 4, the two sides met again, this time in Plano, Texas, where the U.S. attorney’s offices are located.

By this time, Josh Russ had ramped up his office’s civil investigation. He did not plan to attend the May meeting, because it was a meeting led by the criminal side.

Walmart’s lawyers said they hoped to resolve any criminal or civil investigations in one shot and insisted on Russ’ presence. The prosecutors, leery of being accused of improperly coordinating the criminal and civil cases, demanded that Walmart make the request in writing. Walmart did, and Russ agreed to attend. Soon, however, Walmart would accuse the prosecutors of precisely the behavior they were attempting to avoid.

During the first six hours of the meeting, Hewitt and the Walmart lawyers described the results of their own internal investigation, saying the company’s outside lawyers had found no evidence of criminal wrongdoing by the company or its employees. They’d found no evidence of collusion or any improper financial relationships between doctors or customers and Walmart pharmacists. They also admitted that “Walmart could have and should have done more to voluntarily combat the opioid crisis,” according to the letter Hewitt sent to Rosenstein.

The Walmart lawyers outlined the risks to shareholders, employees and the public that could result from a criminal prosecution. But the prosecutors were unmoved. Rattan said that Walmart was no different from an individual criminal defendant who pleaded with the government for leniency by stating that her children would be harmed by her incarceration. Civil Chief Randi Russell took her remarks a step further, saying that Walmart’s size didn’t make it above prosecution. Balfe, becoming animated, touted Walmart’s opioid reforms and the company’s extensive cooperation with law enforcement.

“All of our defendants find Jesus in jail,” one person present recalled thinking. “But that doesn’t mean they don’t go to prison.”

The country was in a crisis, with hundreds of thousands of people dead and major companies poisoning people like drug dealers, as the prosecution team saw it. To the prosecutors, Walmart’s attitude was not only that it hadn’t done anything wrong, but that Walmart didn’t even need to take the prosecutors seriously. That point was reinforced the next day when Walmart made its first settlement offer: $34 million. Calling the offer “insulting,” Russ said Walmart could do better. The parties, he said, were “in different solar systems.”

The discussions reached a crescendo after one of Walmart’s outside lawyers accused the prosecutors of unethically trying to use the threat of a criminal prosecution to leverage higher civil penalties. Russell, angry, demanded that the Walmart lawyer retract his statement. Russ left the room, saying he would not tolerate an attack on his ethics.

The Eastern District thought Walmart should pay an amount that was several times larger than the then-record $150 million civil penalty that McKesson, the giant pharmaceutical distribution company, had paid for its alleged violations of the Controlled Substances Act. Russell suggested a payment of $1.2 billion.

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Pharmacists told ProPublica that they are seeing unusual and fraudulent prescribing activity as doctors stockpile unproven coronavirus drugs endorsed by President Donald Trump.

Later, Rattan pulled out her phone, announcing she’d received a “confidential text message” from her boss, U.S. Attorney Joe Brown, who was attending an NRA rally that day with President Donald Trump. According to Hewitt’s written account, Rattan read the text aloud to the slack-jawed Walmart lawyers: “Walk away, indict them, and then be willing to settle with them after the indictment.”

After another counteroffer, Rattan read Brown’s reply aloud: “That doesn’t hurt Walmart in the least.” Walmart, which had earlier boasted to the group of giving $1 billion a year away to charities, could do much better, the government prosecutors said. Civil Chief Russell quoted the New Testament: “To whom much is given, much is required.”

Some of the prosecutors were willing to trade off a large fine, however, if they could add greater detail to the statement of facts that would eventually go public. Russell said Walmart had to admit it had “killed people.” Jones Day appeared to be eager to avoid such an admission, which would have brought bad publicity and made the company vulnerable in private and state lawsuits. (Walmart is a defendant in the massive opioid lawsuit brought by the states.)

On the way home, Walmart’s lawyers processed what had just happened. Balfe told his colleagues it felt like a hostage situation. A week later, Hewitt wrote to Rosenstein, reiterating the complaint about the office’s purported ethical violations. In a subsequent letter to the DOJ, she appeared ready to make a civil deal: “Walmart is a responsible corporate citizen and stands ready to engage in a principled and reasoned dialogue concerning any potential conduct of its employees that merits a civil penalty under the CSA.”

Rattan and her fellow criminal prosecutors insisted they were sincere. “The threat of indictment is real,” she said, as she concluded the May meeting. “I am not bluffing.” Rattan had amassed a highly successful record in her dozens of trials. “I’m telling you right now,” she would say around the office of the case against Walmart. “Swear in 12 people and present the evidence and they are in trouble.”

Josh Russ began preparing to file the Eastern District’s civil complaint. He sent it to the DEA, which signed off on it. In August 2018, the U.S. attorney’s office commenced planning to bring its civil charges; it began preparations for a press conference to make the announcement.

Meanwhile, Walmart continued appealing up the chain to top officials in Washington. On Aug. 10, Jones Day’s Hewitt sent a letter to Benczkowski, assistant attorney general and head of the DOJ’s Criminal Division, complaining about the investigation. The letter argued that a conviction could harm “millions of low-income and elderly citizens” who rely on federal programs for food and medicine. A convicted corporation might not be permitted to participate in those programs any longer. She outlined what she said were Walmart’s “remedial” measures to become “an industry leader in the Nation’s fight against the opioid crisis.”

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“It first struck me how different it was when I saw my first coronavirus patient go bad. I was like, Holy s**t, this is not the flu. Watching this relatively young guy, gasping for air, pink frothy secretions coming out of his tube.”

Soon after, an official in the deputy attorney general’s office called Brown and told him to halt the Texas office’s criminal investigation, according to five people familiar with the investigation.

Officials at DOJ in Washington then turned their attention to the civil probe. In a video conference call in late August, Stephen Cox, the deputy associate attorney general and a top official in the civil division, and Mary Daly, a daughter of Bill Barr and then the director of opioid enforcement, asked Russ’ team about its tactics and evidence. Cox, who had never been a federal prosecutor and joined the agency from Texas energy company Apache, appeared upset that the Texas prosecutors had sought emails between compliance officials and their bosses, senior executives at Walmart. He seemed to view that tactic as overly aggressive, according to a person familiar with the investigation. The Texas prosecutors said they did so to find out what top Walmart executives knew.

Russ and others contended the civil suit was ready to be filed. Cox said it wasn’t. To spur Cox and his colleagues to action, Russ began to send daily examples of what the prosecutorial team viewed as particularly egregious prescriptions Walmart pharmacists had filled. His message: People had died because of opioids Walmart had dispensed, and every day that passed meant another lost opportunity because of the ticking clock on the statute of limitations.

Meanwhile, Walmart exercised its PR and political muscle. Just days after the contentious May meeting with Eastern District officials, Walmart launched what it billed as a sweeping effort “aimed at curbing opioid misuse and abuse.” The cornerstone was that it would restrict initial opioid prescriptions to no more than a seven-day supply. In September 2018, Ivanka Trump visited a Walmart in Mesquite, Texas, very close to the Eastern District’s offices. She was there, the White House said, to learn how Walmart trains and retains workers. The trip seemed to indicate just how close the company was to the White House.

© Provided by ProPublicaIvanka Trump attends a White House signing ceremony in January 2018 to provide Customs and Border Protection agents with screening technology to fight the opioid crisis. (Carlos Barria/Reuters)

Then came the meeting with Rosenstein in October 2018. Asked about his comments that day, Rosenstein responded by email that he did not recall his comment about everyone being “capitalists” but said: “If you lack the courage to decline a proposed criminal prosecution when you conclude that it is a mistake, you do not belong in a leadership job. We reached every decision after considering the non-partisan factors set forth in the Justice Department’s principles of federal prosecution.”

Trump officials ordered a six-month cooling off period, directing the U.S. attorney’s office to try to reach a settlement with Walmart.

Meanwhile the DOJ formed a national Walmart Working Group, with four other U.S. attorney’s offices in New York, North Carolina, Florida and Colorado. State attorneys general were brought in. On the one hand, the creation of the group underscored the national character of Walmart’s opioid problems. On the other, it dispersed responsibility among different offices and Russ, who was appointed co-head of the group, told colleagues he thought his investigation was being taken away from him.

In January 2019, the DEA presented Walmart with a new, broad subpoena. Walmart had been furnishing what it contended were huge volumes of materials. But it had not handed over everything the government requested. Walmart complained to the prosecutors that the requests were too onerous and overreaching, and that the company needed more time.

Prosecutors felt Walmart wasn’t sufficiently cooperative. Walmart never furnished a full list of doctors its pharmacists were concerned about. Walmart did not give the government full information on its internal databases to analyze prescribing information and patterns. Perhaps most crucially, Walmart had not turned over the emails the Eastern District had subpoenaed between compliance officials and their bosses (the ones Cox had been so shocked about).

Russ begged Washington officials to take it to a judge to enforce the government’s subpoena. The Trump appointees refused, telling the Working Group to keep negotiating.

The Texas prosecutors worried Walmart had an even better inside track than it had already displayed. In June 2019, they learned that Hewitt and Balfe had met with Barr.

The company says the three met as part of a national conference of U.S. attorneys and that it amounted to a grip-and-grin photo op in the presence of several other U.S. attorneys. No one raised the investigation, according to Walmart: “Bob Balfe and Karen Hewitt did not have any discussions with Attorney General Barr or his staff about Walmart.”

In response to an extensive list of questions for this story, DOJ spokeswoman Kerri Kupec responded with a statement that read in whole: “While the Department does not generally confirm, deny, or acknowledge the existence of investigations, it is worth noting that Pro Publica’s reporting in this piece is misleading and contains numerous inaccuracies and erroneous conclusions. As just one example, the meeting with Attorney General Barr that is cited was with eight former US Attorneys from the National Association of Former US Attorneys (NAFUSA) all acting in their capacities as NAFUSA officers, where no particular matters were discussed.”

Still, the prosecutors felt like the Walmart side attempted multiple end runs. For example, Cox’s predecessor, Rachel Brand, had left the DOJ in February 2018 to take a top job in Walmart’s legal department. About a year later, Brand’s attorney inquired as to whether she could appear before the DOJ. The Eastern District team got wind of the request and raised concerns. Walmart says Brand had no interactions with top DOJ or White House officials about the investigation.

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On the criminal side, now that the corporate indictment was dead, the Texas prosecutors pursued the directive to focus on individuals. Rattan prepared an indictment of Brad Nelson, the former compliance manager who had told an executive that the company should focus on “driving sales.”

Walmart lawyers objected. Nelson was no criminal, they contended. Jones Day kept up its pressure. In another letter to Trump officials on Sept. 27, 2019, this time addressed to Gus Eyler, who was now the co-head of the national Walmart Working Group with Russ, Hewitt objected to the threat of a Nelson indictment and once again accused the prosecutors of trying to embarrass the company. Hewitt wrote: “We are concerned that either of the following may be true: the threat of an indictment of Mr. Nelson is being made to pressure Walmart in a civil proceeding in violation of DOJ procedures and the rules of legal ethics, or, just as concerning, EDTX actually intends to prosecute an individual not because the facts support it but in an effort to embarrass Walmart in retaliation for the previous declination of a criminal case against the Company.”

She added, “We also intend to suspend further production of documents under the Omnibus Subpoena until these issues relating to the status of this investigation are resolved.”

The government had issued a lawful subpoena. Walmart was treating it as optional.

Under other circumstances, the DOJ might have raced into a court to force a defiant company to comply with the subpoena. Instead, soon after receiving Hewitt’s letter, Washington informed the Texas prosecutors that they could not indict Nelson.

The civil investigation was still muddling on, however. In midsummer, as the six-month deadline approached, Russ told DOJ officials that Walmart was still not cooperating fully. Trump officials decided to give Walmart three more months. When the next deadline came up on Oct. 25, Washington wanted to extend the negotiations again.

Russ resigned that day. Walmart, he said in his resignation letter, “abused the Department’s fairness, largely ignored our subpoena, and scoffed at our larger work on behalf of all Americans.”

He added, “When I took my oath of office, I invoked God’s judgment and swore that I would support and defend the Constitution.”

The news reverberated throughout the office. “Josh was Captain America, well-respected, well thought of. It came as a big blow,” said a person familiar with the investigation, adding, “It seemed that maybe the country’s best interests were not at heart.”

On Nov. 7, the new deputy attorney general, Jeffrey Rosen, summoned the Texas prosecutorial team again to Washington for another meeting, gauging the progress of the Working Group’s negotiations with Walmart. The team reprised its presentation of the evidence that it had delivered to Rosenstein about a year earlier. Joe Brown, the U.S. attorney, asked Rosen: “Can you point out what’s wrong with our evidence?” Rosen did not respond.

In recent weeks, the DOJ’s inaction has begun to raise concerns on Capitol Hill. Jerrold Nadler, the chairman of the House Judiciary Committee, sent a letter to Dhillon and Barr expressing “concern regarding the Department’s inability to hold prescription opioid distributors and chain pharmacies accountable.” A hearing may follow.

Meanwhile, four years after the investigation first began, negotiations on a civil settlement between the government and Walmart continue.

Do you have information about the Trump Department of Justice or corporate malfeasance? Jesse Eisinger can be reached at jesse.eisinger@propublica.org or on Signal: 718-496-5233.

Doris Burke contributed reporting.

Wikileaks founder Julian Assange denied bail by London court

LONDON, March 25 (Reuters) - WikiLeaks founder Julian Assange, who is fighting extradition from Britain to the United States, was denied bail on Wednesday after his lawyers said he should be released because he was at high risk of contracting the coronavirus in prison.

© Reuters/SIMON DAWSON WikiLeaks' founder Julian Assange leaves Westminster Magistrates Court in London

The 48-year-old is wanted by the United States on 18 criminal counts of conspiring to hack government computers and violating an espionage law and says he could spend decades in prison if convicted.

“As matters stand today, this global pandemic does not as of itself provide grounds for Mr Assange’s release," said Judge Vanessa Baraitser at Westminster Magistrates' Court.

She said Assange's past conduct showed how far he was prepared to go to avoid extradition proceedings, and there were substantial grounds to believe that if released he would abscond again.

She was referring to the fact that Assange skipped bail and fled to the Ecuadorean embassy in London in 2012 to avoid extradition to Sweden, where he was wanted at the time to answer questions on alleged sex crimes. The allegations have since been dropped.

Assange remained holed up in the embassy for seven years. He was eventually dragged out after Ecuador revoked his asylum.

He is being held at Belmarsh Prison in London.