Impunity: an Introduction
We believe that unaccountable leadership is a major cause of health care dysfunction. Impunity is an extreme form of unaccountable leadership.
We have noted that despite numerous legal settlements made by health care organizations of alllegations like fraud, bribery, and kickbacks, almost never do top leaders who presided over these actions face any negative consequences. Lack of deterrence caused by such impunity appears to be a major cause of the epidemic of continuing unethical behavior, crime and corruption on the part of large health care organizations. How executives got to the point of having such impunity has never been clear.
Timidity and lenience by regulatory agencies and law enforcement seem to be factors. For example, in 2014, we noted that Attorney General Eric Holder had previously been reluctant to go after big organizations because of the economic consequences of their failure:
The attorney general angered many last year when he reiterated those concerns at a congressional hearing, admitting 'that the size of some of these institutions becomes so large that it does become difficult for us to prosecute' because of the potential nasty economic effects of a major company failure.In general we have seen much tougher enforcement directed against relatively small health care players than against bigger ones. For example, we noted in 2014 that settlements by Merck, Eli Lilly, Takeda, and Teva, all large pharmaceutical companies, allowed the companies to pay fines to settle allegations that they pushed dangerous products, while none of the executives who authorized, enabled, or directed these actions faced negative consequences. In contrast, at that time, the CEO of a relatively tiny Sheffield Pharmaceuticals was convicted of a felonious wastewater discharge (see this post).
However, this rationale does not address the failure to pursue enforcement actions against organizational leaders who who enabled, authorized, directed or implemented misbehavior. It is not that there are no good legal tools available to do so. We wrote in 2012,
As we noted here, a Supreme Court case from 1943 empowered the government to seek penalties against responsible corporate officers (the "responsible corporate officer doctrine") who were in a position to stop a fraud that resulted in a guilty plea or conviction, particularly for the selling of misbranded or adulterated drugs into interstate commerce under the US Food and Drug Act. Despite a threat made in 2010 by the chief counsel of the Inspector General's office of the US Department of Health and Human Services to use such legal authority to "get high level executives out of companies," nothing of the sort has happened.
Later, in 2015, under the previous administration, there was a tiny sign of progress against impunity. Then, Attorney General Holder authorized the creation of a Corporate Strike Force to take strong actions in response to health care corporate fraud. However, last year the Trump administration gutted even that small effort (look here).
Why are efforts to reduce the impunity of health care corporate leaders going backward? It may be because the very top leadership of the current administration, that is, the President himself, has long personally enjoyed his own impunity.
Examples of Donald Trump and Family's Apparent Impunity Before He Became President
As a wealthy businessman, Donald Trump and his family were often linked to apparently illegal activities, but seemed to avoid any intensive investigation, much less negative consequences.
A 2016 Politico article cataloged Trump's ties to organized crime, and found "Some of Trump’s unsavory connections have been followed by investigators and substantiated in court; some haven’t." Also,
Trump’s career has benefited from a decades-long and largely successful effort to limit and deflect law enforcement investigations into his dealings with top mobsters, organized crime associates, labor fixers, corrupt union leaders, con artists and even a one-time drug trafficker whom Trump retained as the head of his personal helicopter service.We have found numerous examples, whic are below listed chronologically according to the time of occurrence of relevant events.
Trump Accused of Lying to Federal Investigators about his Mafia Connections in the 1980s
A WNYC piece from October, 2016, was based on an interview with a federal prosecutor who had investigated organized crime in the 1980s,
Attorney Kenneth McCallion was one of the federal prosecutors involved in that investigation. He says there appeared to be a sweetheart deal between the Teamsters Local 282 and Trump, where Trump would get a promise of cooperation from organized labor—including breaking up any strikes by minority workers—in exchange for no-show jobs, a lucrative concrete contract and a luxury apartment for the union president's girlfriend.
'After we indicted them, the Teamster leaders called a citywide strike, but there were two job sites they exempted from that. One was Trump Tower and the other was Trump Plaza,' McCallion said.
Yet despite this, Trump was never prosecuted.
'Even though Donald Trump lied to law enforcement about his relationship and lying to federal agents is a federal crime, he basically got a pass at that point,' he said.
Trump Accused in Legal Papers of Accepting Kickbacks, but the Charges were not Investigated
The 2016 Politico article also noted:
[An associate of a convicted racketeer] in court papers accused Trump of taking kickbacks from contractors, asserting this could 'be the basis of a criminal proceeding requiring an attorney general’s investigation' into Trump. Trump then quickly settled, paying the woman a half-million dollars.
No further investigation ensued.
After a Judge Found that he Conspired to Violate Fiduciary Duty and Committed Fraud, Trump was able to Settle with Details Sealed
Again in Politico,
In 1991, a federal judge, Charles E. Stewart Jr., ruled that Trump had engaged in a conspiracy to violate a fiduciary duty, or duty of loyalty, to the workers and their union and that the 'breach involved fraud and the Trump defendants knowingly participated in his breach.' The judge did not find Trump’s testimony to be sufficiently credible and set damages at $325,000. The case was later settled by negotiation, and the agreement was sealed.
It is not clear that Trump was personally responsible for paying whatever the settlement entailed. No criminal charges apparently followed.
Applying for a Casino License, Trump Failed to Disclose he was Under Grand Jury Investigation, but Later Kept his License
As also reported by Politico, when Trump was trying to obtain a license for a New Jersey gambling casino,
Trump was required to disclose any investigations in which he might have been involved in the past, even if they never resulted in charges. Trump didn’t disclose a federal grand jury inquiry into how he obtained an option to buy the Penn Central railroad yards on the West Side of Manhattan. The failure to disclose either that inquiry or the Cody inquiry probably should have disqualified Trump from receiving a license under the standards set by the gaming authorities.
But it didn,'t. And despite the fact that
Once Trump was licensed in 1982, critical facts that should have resulted in license denial began emerging in Trump’s own books and in reports by Barrett—an embarrassment for the licensing commission and state investigators, who were supposed to have turned these stones over. Forced after the fact to look into Trump’s connections, the two federal investigations he failed to reveal and other matters, the New Jersey Division of Gaming Enforcement investigators circled the wagons to defend their work. First they dismissed as unreliable what mobsters, corrupt union bosses and Trump’s biggest customer, among others, had said to Barrett, to me and other journalists and filmmakers about their dealings with Trump. The investigators’ reports showed that they then put Trump under oath. Trump denied any misconduct or testified that he could not remember. They took him at his word. That meant his casino license was secure even though others in the gambling industry, including low-level licensees like card dealers, had been thrown out for far less.
Trump's Casino Company Paid Multiple Fines for Violating Regulations, but Trump was not Personally Sanctioned
An Atlantic article from January, 2017, stated,
Trump has been repeatedly fined for breaking rules related to his operation of casinos. In 1990, with Trump Taj Mahal in trouble, Trump’s father Fred strolled in and bought 700 chips worth a total of $3.5 million. The purchase helped the casino pay debt that was due, but because Fred Trump had no plans to gamble, the New Jersey gaming commission ruled that it was a loan that violated operating rules. Trump paid a $30,000 fine; in the end, the loan didn’t prevent a bankruptcy the following year. As noted above, New Jersey also fined Trump $200,000 for arranging to keep black employees away from mafioso Robert LiButti’s gambling table. In 1991, the Casino Control Commission fined Trump’s company another $450,000 for buying LiButti nine luxury cars. And in 2000, Trump was fined $250,000 for breaking New York state law in lobbying to prevent an Indian casino from opening in the Catskills, for fear it would compete against his Atlantic City casinos.
Also, while Trump was attempting a hostile take-over of a rival casino,
the Federal Trade Commission fined him $750,000 for failing to disclose his purchases of stock in the two companies, which exceeded minimum disclosure levels.
Trump and Family were Accused of Self-Dealing and Accepting Illegal Donations while Operating the Trump Foundation, but were not Individually Penalized
Also reported by the Atlantic,
The [Trump] foundation appears to have broken IRS rules on 'self-dealing” by paying to resolve the legal disputes as well as buying a portrait of Trump and a Tim Tebow helmet that went back to the Trump family. In November, in tax filings posted online, the Trump Foundation said it had violated self-dealing rules in 2015 and in previous, indeterminate, years. On the donation, Trump and Bondi both say there was no quid-pro-quo, but the donation was an illegal one for a charitable nonprofit, and the foundation had to pay a $2,500 fine. Liberal watchdog group Citizens for Responsibility and Ethics in Washington charges other laws may have been broken as well. New York Attorney General Eric Schneiderman has reportedly launched an investigation into the foundation. Schneiderman has also informed the foundation that it is in violation of rules on fundraising and ordered it to quit. Trump has announced plans to shutter his foundation, but reportedly cannot do so while it is under investigation.
Yet so far no person has been charged with any related violations. Note that it appears that Trump may have had leverage on Mr Schneiderman, who has now resigned (see below). Although there were reports in 2017 that the Foundation was going to shut down, as of March, 2018, according to an article in The Hill, the ranking Democratic member of the House Oversight and Government Reform Committee was still trying to get records related to the self-dealing described above from the leadership of the apparently still existing foundation (look here).
Trump's Taj Mahal Casino Was Fined for Breaking Rules about Money Laundering, but Trump Paid no Penalties
A May, 2017, CNN story stated,
The Trump Taj Mahal casino broke anti-money laundering rules 106 times in its first year and a half of operation in the early 1990s, according to the IRS in a 1998 settlement agreement.
It's a bit of forgotten history that's buried in federal records held by an investigative unit of the Treasury Department, records that congressional committees investigating Trump's ties to Russia have obtained access to, CNN has learned.
The casino repeatedly failed to properly report gamblers who cashed out $10,000 or more in a single day, the government said.
Trump's casino ended up paying the Treasury Department a $477,000 fine in 1998 without admitting any liability under the Bank Secrecy Act.
There is no record suggesting anyone looked into Trump's involvement with these violations. Note that
The 1998 settlement was publicly reported at the time, and the Associated Press noted it was the largest fine the federal government ever slapped on a casino for violating the Bank Secrecy Act.
But key details of the casino's cash reporting violations are missing from the publicly released documents, including the identities of the gamblers and casino employees involved in the transactions.
Then, in 2015, FINCEN publicly announced:
The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.
Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.
'Trump Taj Mahal received many warnings about its deficiencies,' said FinCEN Director Jennifer Shasky Calvery. 'Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed.'
Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.
Again, there is no record of any negative consequences for Mr Trump
Trump Made False Statements Under Oath, but was not Charged with Perjury
A Mother Jones article published February, 2016, recounted that in connection with a libel suit Mr Trump filed against journalist Timothy O'Brien alleging O'Brien under-reported Mr Trump's wealth,
In 2007—two years before a New Jersey judge tossed out the case—Trump was questioned during a deposition. Over the course of the two-day-long interrogation, Trump was forced repeatedly to acknowledge having made false statements. And at one point, a lawyer for O’Brien and his publisher asked Trump a straightforward question: Have you ever before associated with individuals you knew were associated with organized crime?'
Trump, who was testifying under oath, answered, 'Not that I know of.'
That was a clear and unequivocal response. But it was not true. Two years earlier, O’Brien had interviewed Trump and specifically asked him about Sullivan and Shapiro. O’Brien, now an editor and writer at Bloomberg, has provided Mother Jones with a transcript of the interview, and it conclusively shows that Trump believed that these two men were associated with organized crime....
Trump: They were tough guys. In fact, they say that Dan Sullivan was the guy that killed Jimmy Hoffa. I don’t know if you ever heard that.
O’Brien: I have heard that. And that he was, you know…
Trump: I just was able to handle them. And I, really, I was able to handle them. I found Sullivan to be the tougher of the two. I started hearing reports about Sullivan, that he killed Jimmy Hoffa….
O’Brien: What was Shapiro like?
Trump: He was like a third-rate, local, real estate mob guy. Nothing spectacular. And I, you know, I got lucky. I heard a rumor that Sullivan, because Sullivan was a great con man, I heard a rumor that Sullivan killed Jimmy Hoffa. And because I heard that rumor I kept my guard up. You know, I said, 'Hey, I don’t want to be friends with this guy.'
So here was Trump connecting Sullivan to the Hoffa murder and calling Shapiro a 'mob guy.'
The same article also asserted that Trump lied in a deposition about knowing and working with Felix Sater, who who "had once been involved in a Mafia-linked stock swindle," and who "had worked with the Trump Organization."
Ivanka Trump and Donald Trump Jr Escaped Indictment for Fraud
As reported by the New Yorker in October, 2017, despite considerable evidence that the two children of Donald Trump had misled potential buyers of Trump SoHo condominiums, Cyrus Vance, the Manhattan District Attorney overruled his staff by halting an investigation of them in 2010. Later, the Trumps' attorney, Marc Kasowitz, made a large donation to Mr Vance's campaign.
Trump University Settled Fraud Allegations, Trump Not Charged
As reported by the New York Times in 2017, "the final settlement of allegations that 'Trump University students had been cheated out of thousands of dollars in tuition through high-pressure sales techniques and false claims about what they would learn" was approved by a judge. Litigation about these allegations had gone on for years, but after his election in November, Mr. Trump reversed course and agreed to pay $25 million to resolve the litigation. He did not admit fault, and he maintained in posts on Twitter after the settlement announcement that he "did not have the time to go through a long but winning trial on Trump U."
The settlement resolved lawsuits brought by the Attorney General of New York, Eric Schneiderman, among others. However, Mr Trump was never charged with a crime by Mr Schneiderman among others. There is some reason to think Mr Trump took actions to ensure his impunity.
According to Bloomberg on May 11, 2018,
Back in 2013, Donald Trump was exploring a presidential run. His Trump University was in the crosshairs of New York’s crusading attorney general. Around the same time, Trump and his personal lawyer got an interesting piece of information: Eric Schneiderman, the AG, was accused of sexually abusing two women.
The details of the accusations were not made public at that time, but later,
Trump took aim at Schneiderman in a tweet on Sept. 11, 2013, that also referred to New York politicians who’d resigned over allegations of sexual misconduct, Anthony Weiner and Eliot Spitzer.
'Weiner is gone, Spitzer is gone -- next will be lightweight A.G. Eric Schneiderman. Is he a crook? Wait and see, worse than Spitzer or Weiner,' Trump tweeted.
Mr Schneiderman never brought criminal charges against Mr Trump. Could it be that he was made aware that Trump had information about Schneiderman's sexual behavior that he could use against him? This month, the allegations of his sexual misconduct were finally made public and he then resigned. The settlement, again absent any charges against Mr Trump, was approved in March, 2017.
Summary of Trump's Pre-Presidency Impunity
While Trump's firms have had to pay multiple fines for breaking rules and laws, and Trump and the immediate family members who work with him in the Trump Organization were credibly accused of multiple types of wrong-doing, including various apparent crimes, neither Trump nor his family members were ever indicted, or apparently investigated for crimes.
President Trump's Arguments That He Has De Jure Impunity
Since he was elected, President Trump and his proxies have asserted he now has de jure impunity that seems to go well beyond the sort of de facto impunity he enjoyed as a wealthy and powerful businessman and celebrity. Note that none of these statements attempted to deny that he had or would violate laws. They were all assertions that President Trump is not subject to the rule of law.
Examples appear again in order of apparent occurrence.
Trump Said He is Not Subject to Laws on Conflicts of Interest.
As reported by CNN in November, 2016:
Donald Trump said on Tuesday that he faces no legal obligation to cut ties with his businesses, even as he described how winning the presidency has made his brand 'hotter' and acknowledged advancing his business interests during a conversation with a British politician.
'The law's totally on my side, the president can't have a conflict of interest,' Trump said in an interview with New York Times editors and writers.
Trump said he was surprised by how little was legally required of him. 'In theory I could run my business perfectly and then run the country perfectly. There's never been a case like this,' he said. 'I'd assumed that you'd have to set up some type of trust or whatever and you don’t.'
It’s true that federal conflict-of-interest laws exempt the president, and he’ll have the power to change White House ethics rules. But there remains a constitutional ban on accepting payments from foreign governments, as well as anti-corruption laws against bribery and fraud.
Trump Stated His Personal or Family Finances Cannot be Subjects of Investigation
In an interview with the New York Times in July, 2017, he responded to a question:
SCHMIDT: Last thing, if Mueller was looking at your finances and your family finances, unrelated to Russia — is that a red line?
HABERMAN: Would that be a breach of what his actual charge is?
TRUMP: I would say yeah. I would say yes. By the way, I would say, I don’t — I don’t — I mean, it’s possible there’s a condo or something, so, you know, I sell a lot of condo units, and somebody from Russia buys a condo, who knows? I don’t make money from Russia. In fact, I put out a letter saying that I don’t make — from one of the most highly respected law firms, accounting firms. I don’t have buildings in Russia. They said I own buildings in Russia. I don’t. They said I made money from Russia. I don’t. It’s not my thing. I don’t, I don’t do that. Over the years, I’ve looked at maybe doing a deal in Russia, but I never did one. Other than I held the Miss Universe pageant there eight, nine years [crosstalk].
SCHMIDT: But if he was outside that lane, would that mean he’d have to go?
HABERMAN: Would you consider——
TRUMP: No, I think that’s a violation.
A typical interpretation of this rather incoherent response was in The Hill,
President Trump warned special counsel Robert Mueller from investigating his family’s finances beyond the scope of the probe into ties between his administration and Russia in an interview with The New York Times on Wednesday.
'I think that’s a violation. Look, this is about Russia,' Trump told the Times.
Trump during the interview said he wasn’t ruling out firing Mueller as special counsel on the probe into Russian meddling in the presidential election.
He did not say that he would order the Justice Department to fire Mueller or under what circumstances he would fire him, but he indicated Mueller investigating his family's finances would cross a line.
Trump's Attorney Argued that a President Cannot be Charged with Obstructing Justice
An article in Axios from December, 2017, strated
John Dowd, President Trump's outside lawyer, outlined to me a new and highly controversial defense/theory in the Russia probe: A president cannot be guilty of obstruction of justice.
The 'President cannot obstruct justice because he is the chief law enforcement officer under [the Constitution's Article II] and has every right to express his view of any case,' Dowd claims.
However, a Washington Post article published on May 18, 2018, stated that Mr Trump's current attorney is not so sure about that,
But apparently [current Trump laywer Rudy] Giuliani disagrees. Trump's own lawyer said Friday that his client is not immune from charges of obstructing justice — which is clearly the most troubling part of special counsel Robert S. Mueller III's investigation for Trump personally. While Trump hasn't been directly linked to potential collusion with Russia, he has taken many actions as president that have caught Mueller's attention and could feasibly be seen as trying to influence the course of the investigation. So whether Trump can technically obstruct justice at all is a key point, and it's one Giuliani just conceded.
Trump's Attorneys Argued He Is Immune from Civil Court Proceedings while President
They had argued that he has immunity from lawsuits as President, but as Reuters reported this month,
A New York state judge on Tuesday said U.S. President Donald Trump must face a defamation lawsuit by a woman who accused him of sexually harassing her after she appeared on his former reality TV show.
The decision by Justice Jennifer Schecter of the New York state court in Manhattan in favor of California restaurateur Summer Zervos, a former contestant on NBC’s 'The Apprentice,' raises the prospect that Trump might have to answer embarrassing questions in court about his behavior toward women.
She rejected Trump’s claim that he was immune from being sued, finding 'absolutely no authority' to dismiss litigation related 'purely to unofficial conduct' solely because he occupied the White House.
'No one is above the law,' the judge wrote.
Trump's Attorney Asserted He Cannot be Forced to Testify in Court
As reported by Reuters two days ago, on May 17, 2018, President Trump's current lawyer Rudolf Giuliani:
told Fox News Thursday morning not just that the special counsel cannot indict President Trump but that Mueller’s team cannot even subpoena the president to appear before a grand jury. Giuliani’s theory is that if the president cannot be prosecuted, he cannot be called to testify in an investigation of his conduct.
'We’re pretty comfortable, in the circumstances of this case, they wouldn’t be able to subpoena him personally,' Giuliani said. 'They could probably require documents to be produced. That’s what was required of Nixon. We’ve provided 1.4 million documents. They probably could require you to testify in a civil case, possibly even as a witness in a criminal case, but they can’t require you to testify in what would be your own case.'
I talked Thursday to eight lawyers who’ve been involved in previous probes of U.S. presidents. Every one of them said Giuliani’s theory is incorrect.
Some of them had quite strong words.
George Conway wrote the Supreme Court briefs for Bill Clinton accuser Paula Jones in the case that led to a unanimous ruling from the justices that the Constitution does not shield presidents from testifying in certain civil suits. He said Giuliani’s assertion that President Trump cannot be subpoenaed is 'drivel.'
Lawrence Robbins, who represented White House officials in the Whitewater investigation, said Giuliani’s theory is 'facially preposterous.'
Solomon Wisenberg, who worked on the Whitewater probe of Clinton, called the theory 'delusional.'
Unaccountable leadership, particularly leadership with impunity, has been a major feature of modern US health care, and probably explains the continuing bad behavior, including criminally bad behavior and outright corrupt behavior ongoing in US health care organizations. While the US government began to address impunity in the last few years, those efforts have apparently halted during the current Trump regime. Given President Trump's long record of personal impunity during his career as a wealthy and prominent businessman, and his assertions that as President he is above the law, that should be no surprise.
Yet, true health care reform requires well-informed leaders who uphold health care professionals' values, put patient's and the public's health ahead of all other considerations, avoid self-interest and conflicts of interest, are honest and ethical, and surely are not corrupt. They need to work in the context of a government that is of, by and for the people, not of, by and for a demagogic leader.
In these times, true health reform is not possible under the current president. We will watch health care dysfunction continue to grow, and patients' and the public's health continue to decline until someone new takes the oath of office.
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