The explosive truth behind US wave of corporate crime

Greg Palast

By Greg Palast for The Observer

There aren’t a million lawyers in America. There are only 925,671. But that’s not nearly enough, according to Elaine Levenson. Levenson, a Cincinnati housewife, is waiting for her heart to explode. In 1981, surgeons implanted a mechanical valve in her heart, the Bjork-Shiley, the ‘Rolls-Royce of valves’, her doctor told her. What neither she nor her doctor knew was that several Bjork-Shiley valves had fractured during testing, years before her implant was done. The company that made the valve, an offshoot of pharmaceuticals giant Pfizer, never told the government.

At Pfizer’s factory in the Caribbean, company inspectors found inferior equipment which made poor welds. Rather than toss out bad valves, Pfizer management ordered the defects to be ground down, which weakened the valves further, but made them look smooth and perfect. Pfizer then sold them worldwide.

When the valve’s struts break, the heart contracts – and explodes. Two-thirds of the victims die, usually in minutes. In 1980, Dr Viking Bjork, whose respected name helped sell the products, wrote to Pfizer demanding corrective action. He threatened to publish cases of valve-strut failures.

A panicked Pfizer executive telexed: ‘ATTN PROF BJORK. WE WOULD PREFER THAT YOU DID NOT PUBLISH THE DATA RELATIVE TO STRUT FRACTURE.’ He then gave his reason for holding off public exposure of the deadly valve failures: ‘WE EXPECT A FEW MORE.’ His expectations were realised. The fracture count has now reached 800, with 500 dead – so far. Bjork called it murder, but kept public silence.

Eight months after the panic telex, a valve was implanted in Mrs Levenson. In 1994, the US Justice Department nabbed Pfizer. To avoid criminal charges, the company paid civil penalties – and about $200 million in restitution to victims. Without the damning evidence prised from Pfizer by a squadron of lawyers, the Justice Department would never have brought its case.

Pfizer moans that lawyers are still hounding the company. But that is partly because Pfizer recalled only the unused valves. Even today, the company refuses to pay to replace the valves of those fearful souls who already have them implanted. As you will have learnt from watching episodes of LA Law, in America’s courtrooms, the rich get away with murder. Yet, no matter the odds, for the Average Joe easy access to the courts is a right far more valuable than the quadrennial privilege of voting for Philanderer-in-Chief. This wee bit of justice, when victim David can demand to face corporate Goliath, makes America feel like a democracy. Several British heart-valve victims sued Pfizer in the US courts.

In Britain itself, Pfizer has little to fear. As a London solicitor for the pharmaceuticals industry told me: ‘US legal excesses are not visited upon defendants here.’ And the drug companies want to keep it that way. If you happen to be in Blackpool today, you can drop by Pfizer’s booth at the Labour Party Conference.

(For more discreet approaches to Downing Street, Pfizer retains GPC Access, Derek Draper’s former lobby firm.) Pfizer has two reasons to cuddle up to New Labour: it wants the National Health Service to pay a stiff price for its love potion, Viagra; and it wants to prevent a toughening of UK products liability law recently demanded by the European Union.

Back in the US, victims’ rights are under attack. Waving the banner of ‘Tort Reform’, corporate America is funding an ad campaign portraying entrepreneurs held hostage by frivolous lawsuits.

But proposed remedies stink of special exemptions from justice. Eight weeks ago, the Republican senate leader slipped into patients’ rights legislation a ban on all lawsuits against makers of parts for body implants, even those with deadly defects. The clause, killed by exposure, was lobbied by the Health Industries Manufacturers Association, supported by – you guessed it – Pfizer.

At their best, tort lawyers are cops who police civil crime. Just as a wave of burglaries leads to demand for more constables, the massive increase in litigation has a single cause: a corporate civil crime wave. Three years ago, after 18 buildings blew up in Chicago and killed four people, I searched through the records of the local, private gas company. Engineers’ reports, from years earlier, contained maps marking where explosions would likely take place.

They might as well have bought the coffins in advance. Management had rejected repairs as ‘not in the strategic plan’. It’s not evil at work, but corporate structures in which the human consequences of financial acts are distant and unimaginable.

I admit that of the nearly one million lawyers in the US, you could probably drown 90 per cent and only their mothers would grieve. But as Mrs Levenson told me, without her lawyer, who worked for a percentage of her settlement, Pfizer would not have paid her a dime of compensation. The tort reformers’ line is that fee-hungry lawyers are hawking bogus fears, poisoning American’s faith in the basic decency of the business community, turning us into a people who no longer trust each other. But whose fault is that? The lawyers? Mrs Levenson put her trust in Pfizer Pharmaceutical. Then they broke her heart.

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Gregory Palast’s other investigative reports can be found at www.GregPalast.com where you can also subscribe to Palast’s column.

Gregory Palast’s column “Inside Corporate America” appears fortnightly in the
Observer’s Business section. Nominated Business Writer of the Year (UK Press
Association – 2000), Investigative Story of the Year (Industrial. Society – 1999), Financial Times David Thomas Prize (1998).