Business
‘Source Of Profound Regret’: Firm Pays Half Billion Settlement To Avoid Criminal Prosecution For Fueling Opioid Crisis
From the Daily Caller News Foundation
By Adam Pack
A consulting giant that helped fuel the United States’ deadly opioid epidemic agreed to pay a massive settlement to avoid criminal prosecution, according to court papers filed Friday.
McKinsey & Company, an international management consulting firm that advised Purdue Pharma to “turbocharge” sales of Oxycontin during the height of the opioid crisis, entered into a deferred prosecution agreement with the Department of Justice (DOJ) that will require the firm to pay a $650 million settlement over five years.
A former senior McKinsey employee also pleaded guilty to an obstruction of justice charge for destroying records detailing the consulting giant’s work for Purdue.
The McKinsey settlement is the latest in a string of lawsuits seeking accountability from corporations and consulting firms for contributing to the opioid crisis.
The epidemic, created in part from the work of Purdue and McKinsey to market OxyContin to millions of Americans, has taken more than 500,000 lives and left a trail of devastation in its wake, particularly in parts of rural America.
“McKinsey schemed with Purdue Pharma to ‘turbocharge’ OxyContin sales during a raging opioid epidemic — an epidemic that continues to decimate families and communities across the nation,” U.S. Attorney Joshua Levy for the District of Massachusetts, who sued McKinsey alongside an attorney for the Western District of Virginia over the firm’s consulting work for Purdue, wrote following the settlement. “Consulting firms like McKinsey should get the message: if the advice you give to companies in boardrooms and PowerPoint presentations aids and abets criminal activity, we will come after you and we will expose the truth.”
“We are deeply sorry for our past client service to Purdue Pharma and the actions of a former partner who deleted documents related to his work for that client,” the consulting firm wrote in a statement following the settlement. “We should have appreciated the harm opioids were causing in our society and we should not have undertaken sales and marketing work for Purdue Pharma. This terrible public health crisis and our past work for opioid manufacturers will always be a source of profound regret for our firm.”
Business
What an Effective All-of-Government Program Review Might Look Like
More than once in this space I’ve advocated for a comprehensive all-of-government review to find and eliminate waste and corruption. So it’s about time I set finger to keyboard and started mapping out how such a review might unfold.
Why is it just this moment in history that finds me so passionate about reviews?
Canada’s government spends more money than it receives. I know that’s hardly breaking news, but Ottawa’s reckless and frenzied race to max out every credit card in the known universe has driven the federal debt to $1.24 trillion. That’s 42.1 percent of GDP.¹
Among the biggest expenses? Employment growth in the federal civil service. Parliament employed 276,367 people in 2015 but by 2023 that had exploded to 370,368. That 94,001 increase amounts to a jump of 34 percent. For context, Canada’s overall population during that time increased by just 12 percent.
Given that the average weekly earnings for individuals employed in federal government public administration was $1,779 in 2023, just covering salaries for those extra 94,001 workers cost us $8.7 billion through that year.
But workers cost us much more than just their salaries. There are pension and CPP contributions, EI premiums, health and dental benefits, and indirect costs like office accommodations and training. All that could easily add another $50,000 per employee. Multiply that by all the new hires, and the total cost of those extra 94,001 workers has ballooned to $13.4 billion. That would be nearly a quarter of the deficit from the 2024 $61.9 billion fall update.² (Chrystia Freeland may not have been the one to officially announce that number, but she and her boss were the ones who got us there.)
Of course using a lottery to select, say, two out of every five bureaucrats for firing won’t give us the result we’re after. We want to improve government, not cripple it. (Although, to be completely honest, I find the idea of random mass firings way more attractive than I should.)
A successful review will identify programs that aren’t delivering cost-effective value to the people of Canada. Some of those programs will need changes and others should disappear altogether. For some, appropriate next-steps will come to light only through full audits.
But success will also require creating an organizational culture that earns the respect and buy-in of department insiders, stakeholders, and the general public.
The rest of this post will present some foundational principles that can make all that attainable. I should note that this post was greatly enhanced from input using the invaluable experience of a number of The Audit subscribers.
Use Transparent and Well-Defined Goals
Consensus should always be the ideal, but clarity is non-negotiable. Program advocates must be prepared to convincingly explain what they’re trying to achieve, including setting clear metrics for success and failure. Saving taxpayer funds to avoid economic catastrophe is obviously a primary goal. But more effective governance and more professional service delivery also rank pretty high.
Questions to ask and answer before, during, and after review operations:
- Does the program under review fall within the constitutional and operational scope of the federal government?
- Is there overlap with other programs or other levels of government?
- Are the original policy goals that inspired the program still relevant?
- Is the program in its current form the most effective and economical way of achieving those goals?
- Are the changes you’re proposing sustainable or will they sink back into the swamp and disappear as soon as no one’s looking?
Perhaps the most important goal of them all should be getting the job done in our lifetimes. We’ve all seen commissions, working groups, and subcommittees that drag on through multiple years and millions of dollars. You don’t want to make dumb mistakes, but that doesn’t mean you can’t adopt new tools or methodologies (like Agile) to speed things up.
Transparency is a fundamental requirement for public and institutional buy-in. That means publishing program goals and processes along with regular updates. It also means being responsive to reasonable requests for information. Fortunately, someone (Al Gore?) invented the internet, so it should be possible to throw together an interactive browser-based dashboard that keeps the rest of us in the loop and allows for feedback.
Over the years, I’ve personally built nice(ish) websites in minutes, even sites that use pipelines for dynamically pulling data from third-party sources. This isn’t rocket science – especially when you’re not dealing with sensitive private data.
Be Non-Partisan
Going to war against the complexity, toxic politics, incompetence, institutional inertia, NIMBY-ism, and sheer scope of government waste is not for the faint of heart. But setting yourself up as the Righteous Redeemer of only 40 percent of Canadians will make things infinitely more difficult.
Key project positions have to be filled by the most capable individuals from anywhere on the political spectrum. And proposals for cuts should rise above political gamesmanship. It may be unreasonable to expect friendly cross-the-aisle collaboration, but the value of the eventual results should be so self-evident that they’re impossible to oppose in good faith.
Frankly, if you’d ask me, any government that managed to miraculously rise above partisan silliness and genuinely put the country’s needs first would probably guarantee itself reelection for a generation.
Be Efficient
Don’t reinvent the wheel. If internal or external departmental audits already exist, then incorporate their findings. Similarly, make use of any existing best-practice policies, standards, and guidance from bodies like the Office of the Comptroller General and the Treasury Board of Canada Secretariat.
It’ll be important to know who really controls the levers of power within government. So make sure you’ve got members of key insider organizations like the Privy Council Office and the Committee of Senior Officials on speed dial.
Also, incorporate forward-thinking elements into new programs by including sunset clauses, real-time monitoring, and ongoing mini reviews. To keep things moving fast, implement promising auditing and analysis ideas early as pilot programs. If they work, great. Expand. If they don’t work, bury ‘em. No harm done.
AI-driven insights can probably speed up early steps of the review process. For instance, before you even book your first meeting with the dreaded Assistant Deputy Minister, feed the department’s program spending and outcomes data to an AI model and tell it to look for evidence-based inefficiencies and redundancy. The results can set the agenda for the conversation you eventually do have.
You can similarly build simple software models that search for optimal spending balances across the whole government. Complex multivariate calculations that once required weeks of hard math can now be done in seconds.
A friend who administrates a private high school recently tasked ChatGPT with calculating the optimal teaching calendar for the coming school year. After a few seconds, the perfect schedule showed up on-screen. The woman who, in previous years, had spent countless hours on the task, literally laughed with excitement. “What are you so happy about?” My friend asked. “This thing just took your job.”
Consult the Civil Service (and the public)
I know exactly what you’re thinking: is there a better way to destroy any process than burying it under endless rounds of public consultations (followed by years of report writing)? Trust me, I feel your pain.
But it’s 2025. Things can be different now. In fact, contrary to the way it might look to many good people inside the public sector, things can be a lot better.
This consultation would be 100 percent digital and its main stage need last no longer than 60 days. Here’s how it’ll go:
- Build a website, make a lot of noise to attract attention, and invite all Canadians – with a particular focus on current and former civil servants.
- Require login that includes a physical address and (perhaps) a government-issued ID. This will prevent interest groups from gaming the system.
- Use AI tools to identify boilerplate cut-and-paste submissions and flag them for reduced relevance.
- Encourage (but don’t require) participants to identify themselves by their background and employment to permit useful data segmentation. This will make it easier to identify expert submissions.
- Provide ongoing full public access to all submissions. Private information would be redacted, of course. And whistle blowers could have specialized, extra-secure access.
- Use traditional software analytics to flag especially interesting submissions and analyze all submissions using AI models to produce deeper summaries and analyses.
- Publish ongoing overviews of the results.
- [Other stuff…]
- Pick out a nice suit/dress for your Order of Canada investiture ceremony.
There’s absolutely nothing revolutionary about any of this (except the Order of Canada bit). The City of Toronto has been doing most of it for years.
Business
Essential goods shouldn’t be taxed
From the Canadian Taxpayers Federation
By Jay Goldberg
The Trudeau government’s two-month GST holiday on certain items has been called many things.
Former finance minister Chrystia Freeland resignation letter suggests she thinks it’s a “gimmick.”
Conservative Leader Pierre Poilievre has called it a “tax trick.”
But here’s a more fundamental question: If the government thinks Canadians needs a sales tax holiday on certain items, why are those basics taxed in the first place?
Items like car seats, diapers, and pre-prepared foods are all taxed by the feds. They’re all also subject to the federal government’s sales tax holiday, which Prime Minister Justin Trudeau says was triggered because Canadians are having a hard time making ends meet.
“Our government can’t set prices, but we can give Canadians, and especially working Canadians, more money back in their pocket,” said Trudeau at his GST holiday announcement.
At least Trudeau seems to know it’s bad for governments to set prices. But the government does raise prices by adding sales tax on top of goods Canadians have to buy.
And you don’t need to be a parent to know that car seats and diapers are among the most essential goods on a parent’s shopping list.
Take a car seat. A mid-tier car seat costs around $250. The federal sales tax, which is currently at five per cent, adds $12.50 to the final cost of that car seat.
Parents across the country are no doubt asking why things like car seats and diapers were taxed by the feds in November, will be taxed again by the feds in March, but aren’t being taxed right now.
What justification can the government possibly give to parents on Feb. 16, 2025 – the day this sales tax holiday ends – for once again taxing things like car seats and diapers?
The same goes for pre-prepared meals. Many Canadians buy pre-prepared food at grocery stores to bring to work for lunch or to eat on the go. Why are the ingredients for that pre-prepared meal not taxed but the final meal is? And why take the tax off a grocery store deli sandwich now but not a few months from now?
There’s even more of an argument to be made on this front because many provinces don’t tax a lot of the items that are part of the feds’ sales tax holiday.
Take Ontario as an example.
Canada’s most populous province doesn’t tax things like books, children’s clothing, car seats, and diapers. Some pre-prepared foods aren’t taxed either.
If provinces don’t tax these items, why do the feds?
The Trudeau government took inspiration from the NDP when it comes to the GST break. It ought to also take inspiration from the party’s call to make relief permanent.
Trudeau’s GST announcement came just days after NDP Leader Jagmeet Singh called for the permanent removal of the federal sales tax on items like pre-prepared meals, diapers, and car seats. Singh’s proposal actually went much further, and included ending the GST on home heating, as well as internet and phone bills.
In touting his proposal, Singh argued that “those taxes never should have been there in the first place.”
Singh is right. Essential goods shouldn’t be subject to the GST. Period.
Just days after Singh’s announcement, Trudeau played copycat with one of his own.
But a two-month reprieve pales in comparison to permanent relief.
If the Trudeau government wants to deliver real relief to struggling Canadian families, essential items that most provinces already don’t tax, such as diapers, car seats, and pre-prepared meals, should be permanently exempt from the GST.
Permanent sales tax relief is more than doable. The feds could deliver on it without hiking the deficit by taking a sledgehammer to the more than $40 billion a year they hand out in corporate welfare.
Anything less than a permanent sales tax break simply won’t cut it when it comes to cutting costs for Canadians.
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