Tagged: Peter Humphrey

Despite The Headlines.. Peter Humprey’s Legal Case Against GSK Is Not Over Yet..


https://www.reuters.com/article/us-gsk-china-lawsuit/u-s-judge-dismisses-ex-sleuths-lawsuit-against-glaxosmithkline-idUSKCN1C72OB

U.S. judge dismisses ex-sleuths’ lawsuit against GlaxoSmithKline

 

“….(Reuters) – A U.S. judge has dismissed a lawsuit by two former corporate investigators who accused GlaxoSmithKline Plc (GSK) of misleading them into investigating a whistleblower in China, leading to their arrest amid a bribery scandal involving the drugmaker…..”

If you happened to read this headline (above) by Reuters recently, you could be forgiven for thinking that Peter Humprey’s case against GlaxoSmithKline was finished at the first hurdle- however this is far from the case.  Peter -and Yu’s- legal cases are ongoing, and a number of points should be made about them- for the record.

There is a major inconsistency between the fact that the SEC and the DOJ can punish companies for bribery offences committed abroad under the FCPA, and the fact that this judge feels that a company can no longer be held to account under the RICO law in a US court for issuing criminal orders from its US and UK headquarters to its gang members in China to commit the offences against Humphrey and Yu that led to their imprisonment, orders which constitute racketeering and organised crime.

This first round ruling in Philadelphia only concerns the applicability of the jurisdiction of this particular court on these particular charges outlined in Humphrey & Yu’s writ. It should be pointed out that the order does not say that their allegations are untrue. It is also worthy to note that GSK has not denied the allegations of Humphrey and Yu. That is because it cannot refute the charges – it knows that they are true and can be proven. For that reason, it is trying to block a trial in open court and trying to force Humphrey and Yu to sue or arbitrate in China – knowing that legal action in China is impossible because Humphrey and Yu are banished (thanks to GSK) from that country and cannot pursue a case there, and knowing that Humphrey (thanks to GSK) is frail, having been denied medical treatment in captivity, which led to his cancer. And knowing that China would not allow such a court case anyway because it is too political for China’s communist dictators. As Peter has said in interviews, and as it well known anyhow- there is no rule of law in China. How cynical and callous can GSK get?

They have ruined the lives of Peter and Yu. This does not surprise me however, as I have documented thousands of lives ruined by GSK’s behavior over the past decade. This blog shows a history of GSK’s unethical practice, and it serves a purpose: to highlight the human collateral damage from GSK’s indiscriminate human rights abuses, and their flagrantly unethical and immoral actions in the pursuit of profits before human life. People’s lives have been destroyed, some people have even been killed because of GSK’s greed. Their behavior has harmed many.

Humphrey and Yu can and should appeal against this erroneous court ruling. Humphrey and Yu also clearly have options to use other venues for litigation and to pursue other charges in addition to those cited in their writ. They also have the option – not yet pursued -of suing individuals and not just the company.

Furthermore, there is also a much larger court than a court of law. That is the court of public opinion and reputation. In that greater court, we all know how GSK will be judged and condemned for its callous criminal behaviour. GSK have had decades of negative headlines, do they need more?

Humphrey and Yu obviously have masses of evidence that has not yet been presented to the public. We can only look forward to that coming out, while GSK must be nervous by that prospect and will not wish that evidence to be aired in any court at all. Who knows, they might even prefer to negotiate. Either way, it seems that these cases are far from over.

I wish Peter and Yu well in their fight against GSK (a deplorable company with absolutely no shred of human decency). See Greg Thorpe’s Department of Justice legal complaint against GSK from 2012 and read for yourself just how low GSK’s unethical behavior goes..

https://truthman30.wordpress.com/2015/08/28/whistleblower-greg-thorpes-7th-ammended-complaint/

 

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Another Legal Woe For Glaxo…


http://www.dailymail.co.uk/wires/ap/article-4313086/Couple-sue-pharma-giant-work-led-prison-China.html

Couple sue pharma giant for work that led to prison in China

LONDON (AP) – When investigators Peter Humphrey and Yu Yingzeng were hired by pharmaceutical company GlaxoSmithKline in 2013, their job was to look into a former employee in China who, they were told, was making false allegations about the firm.

The person, it turns out, was a whistleblower who had revealed GSK’s practice of bribes in China. And when Chinese authorities cracked down on GSK, they also swept up the husband-and-wife team of investigators, imprisoning them for two years for “illegally acquiring citizens’ information.”

Humphrey and Yu, back in Britain with health problems and in financial ruin, are now suing GSK for allegedly misleading them on what the job was about and exposing them to legal risks in China they could not have foreseen. GSK says there’s no merit to the claim.

Investigator Peter Humphrey poses for portraits at his home near Redhill, England, Tuesday, March 7, 2017. When investigators Peter Humphrey and Yu Yingzeng were hired by pharmaceutical company GlaxoSmithKline in 2013, their job was to look into a former employee in China who, they were told, was making false allegations about GSK. The employee, it turns out, was a whistleblower who had revealed a GSK practice of bribes in China. (AP Photo/Matt Dunham)

Investigator Peter Humphrey poses for portraits at his home near Redhill, England, Tuesday, March 7, 2017. When investigators Peter Humphrey and Yu Yingzeng were hired by pharmaceutical company GlaxoSmithKline in 2013, their job was to look into a former employee in China who, they were told, was making false allegations about GSK. The employee, it turns out, was a whistleblower who had revealed a GSK practice of bribes in China. (AP Photo/Matt Dunham)

The case sheds a light on how a small business became collateral damage in the fight between one of the world’s biggest pharma companies and Chinese state power.

“Peter was directly misled about what he was being hired to do,” says John Zach, the New York-based lawyer for Humphrey, 60, and Yu, 63. They are seeking unspecified damages from GSK, with Zach filing the latest response in the litigation this month.

The Chinese government’s investigation into GSK ended in 2014 with the company paying $490 million, China’s biggest ever corporate penalty, for bribing doctors and hospitals to promote its products.

The authorities also went after Humphrey and Yu, who were not covered by GSK’s legal defense and ultimately imprisoned for allegedly spying on a Chinese citizen.

The couple was paraded on Chinese television purportedly confessing their crimes. Jailed separately, they endured conditions that allegedly left them with serious health problems, including, in Humphrey’s case, prostate cancer he says went untreated during his incarceration.

“They knew I had a prostate problem but refused to investigate and treat it whenever I asked, telling me I must first sign a confession of crimes I hadn’t committed,” Humphrey said. He also developed a hernia, chronic arthritis and osteoporosis, aggravated by the lack of sunlight, fresh air, exercise and decent nutrition. Yu developed kidney disease.

Chinese authorities have denied accusations that the two were mistreated.

The couple were released in mid-2015 and deported to Britain. Humphrey was banned from China for 10 years; U.S. citizen Yu is unlikely to be granted a visa to return. In China, their company, which had 15 employees, went bankrupt, their property was seized, and bank accounts cancelled.

The lawsuit against GSK was lodged in November in Pennsylvania, where GSK’s U.S. operations are based.

GSK has asked the Pennsylvania court to dismiss Humphrey and Yu’s writ. In documents seen by AP, the company says there is no U.S. jurisdiction, as the couple’s company was hired in Shanghai by GSK’s China operation. They should take their claim back to China for arbitration, it says.

“We do not believe this case has any merit,” GSK said in a statement.

However it ends up, the case illustrates some of the legal risks small businesses can run into when deal with developing economies like China, as well as the difficulty of taking on a multinational with deep pockets. The lawsuit is not a big financial threat for GSK.

“They can ride out the scandals as the cost of doing business, and those who get caught up on the periphery are collateral damage,” said Tim Reed, executive director of Health Action International, a non-profit group representing consumer interests in drug policy.

Investigator Peter Humphrey poses for portraits at his home near Redhill, England, Tuesday, March 7, 2017. When investigators Peter Humphrey and Yu Yingzeng were hired by pharmaceutical company GlaxoSmithKline in 2013, their job was to look into a former employee in China who, they were told, was making false allegations about GSK. The employee, it turns out, was a whistleblower who had revealed a GSK practice of bribes in China. (AP Photo/Matt Dunham)

Investigator Peter Humphrey poses for portraits at his home near Redhill, England, Tuesday, March 7, 2017. When investigators Peter Humphrey and Yu Yingzeng were hired by pharmaceutical company GlaxoSmithKline in 2013, their job was to look into a former employee in China who, they were told, was making false allegations about GSK. The employee, it turns out, was a whistleblower who had revealed a GSK practice of bribes in China. (AP Photo/Matt Dunham)

Glaxo Repudiates Peter Humphrey’s Legal Claim, But Peter Fights Back..


Regular readers of this blog would be aware of the current lawsuit taken by Peter Humphrey, against GlaxoSmithKline.

See the gist of the story (and Peter’s original complaint) here

“…A 42 page complaint was filed on November 15, 2016, by Peter Humphrey and his wife, Yu Yingzeng, in relation to GSK’s nefarious activities in China which saw the pair incarcerated for around 2 years in Chinese slum-like conditions prison cells.

The complaint delves deep into the whole sordid affair and alleges bribery on a huge scale, more importantly, the complaint alleges that GSK hired the services of Humphrey and Yu in efforts to smokescreen the corruption in China, corruption, according to the complaint, that they had known about for many years.

Furthermore, the 42 page document alleges that GSK’s CEO, Andrew Witty, lied to the media when he was asked about the corruption in China…”


In my opinion, Peter’s legal complaint is massively undermining, and embarrassing, for Glaxo. They will likely try everything in their power (and they have huge power) to discredit Humphrey and his case against them. Glaxo have a history of playing low and dirty in all their dealings, therefore we should expect nothing but the same from them when dealing with legal cases against them. Ethics, and fair play, are not in the GSK mindset.

However, I also think that GSK would be wise to settle this case well before court, because from scanning through the many pages of the complaint, saying it doesn’t look good for Glaxo would be a massive understatement.

What I find quite astounding also, about this case, is- GSK do not deny most of the (shocking) factual allegations against them, they merely try to discredit them by ignoring Peter and Yu’s suffering, and their own lies and crimes, by saying that Peter and Yu ‘knew the risks’.

However, how could Peter and Yu have known the risks when GSK were feeding them false information?

Furthermore, Glaxo are trying to force Peter and Yu to sue in a country (China) which (because of GSK’s deception/the basis of the lawsuit itself) they cannot enter (thanks to GSK).

GSK’s response, is (unsurprisingly) cynical, callous and uncaring, and surely must add to Peter and Yu’s distress.

Glaxo’s 242 page rebuttal of Peter’s original claim can be read here:

Humphrey — Motion to Compel or Dismiss [AS FILED](1)

And Peter’s defense  can be read here:

2017.03.03. [23] Pltfs.’ MOL in Opp. to Defts.’ Motion to Compel and-or Motion to Dismiss (with proposed order)(1)

The basis of Glaxo’s argument to dismiss Peter’s complaint seems to hinge upon :

…..”Defendants’ motion on the merits rests primarily on the argument that Plaintiffs “sued the wrong entities.”…

In other words, Glaxo is trying to nullify Peter Humphrey’s complaint on the basis that GSK believe that the claimants (Peter and his wife Yu) should go back to China to to arbitrate their claims against Glaxo PLC, and they claim that they can’t be sued in the US for this case.

Ironically (and conveniently for GSK) even if Peter and Yu wanted to go back to China-they can’t- because GSK scapegoated them and set them up by hiring them (and deceiving them) about their China business dealings. It’s because of GSK’s unethical conduct in China that Peter and Yu ended up in prison in China. GSK have a lot to answer here, not just in terms of Peter and Yu’s case, but in the broader context of corruption within the company generally, and not to mention of course the various questions surrounding what exactly GSK knew of Mark Reilly’s bribery network, how was it funded? What did the senior execs know? etc etc.

If Peter’s case gets to court, the whole thing would blow wide open, and this is a gigantic stinking, criminal and unethical, can of worms about the company- that GSK will not be able to keep a lid on this time…

GSK is a global healthcare company with major locations in the US, and the UK, its China business is but a tiny part of its internationally spread-out business. GSK’s legal department is based out of the US too, so for GSK to attempt to nullify Peter’s claims on this basis, seems not only weak, and flimsy, but also pretty desperate.

Glaxo’s CEO Andrew Witty, might have to answer for GSK, and the China bribe scandal in a US court but for now it seems Witty is happy to cash in his chips, and jump ship (he’s retiring next month), so perhaps he’ll leave all these recent scandalous messes to the incoming CEO, Emma Walmsley? (it seems to be a GSK tradition by now doesn’t it?)

And maybe then, Walmsley will claim that GSK’s behavior in China was all part of ‘another era’, or some other such nonsense…

only time will tell..

In the meantime, take a look at Peter Humphrey’s rebuke of GSK 2017.03.03. [23] Pltfs.’ MOL in Opp. to Defts.’ Motion to Compel and-or Motion to Dismiss (with proposed order)(1), and think to yourself, are GSK the most corrupt and unethical corporation on the planet?

Personally, I think they’re up there with the worst of them..

See some of the text from 2017.03.03. [23] Pltfs.’ MOL in Opp. to Defts.’ Motion to Compel and-or Motion to Dismiss (with proposed order)(1) , high-lighted below, and make up your own mind…

And when you’re finished with that read GSK Whistle-Blower Greg Thorpe’s complaint against Glaxo in 2012 (2 years before they got caught swindling in China).

This company is simply abhorrent..

GSKChina1

GSK China 2.png

GSK3china.pngGSK4.png

GSK6

What’s Glaxo’s Andrew Witty’s Definition Of ‘Normal Behavior’?


AW.png


“It’s difficult to get a man to understand something, when his salary depends on his not understanding it”

Upton Sinclair


A few days ago, I posted a link online to a publicly available document. This document is basically a legal writ (lawsuit/complaint), taken by Peter Humphrey, against the drug company GlaxoSmithKline.(see here)

The gist of Peter’s story with Glaxo has already been discussed in some previous posts, by Bob Fiddaman, on his Seroxat Sufferers Blog. Myself and Bob have been writing about the Seroxat scandal (and GSK’s nefarious conduct) for many years and we know each other quite well, so I am sure he won’t mind me using a summary from his posts, in order to explain some context for my own post on this.

Peter’s story of his experiences with Glaxo (documented in his legal complaint) is both intriguing and harrowing. It reads like something from John Le Carre’s ‘Constant Gardener’. The writ is fascinating, even just in terms of the depth of Glaxo’s dodgy conduct described, and the allegations alone are also shocking (but probably unsurprising for many  Glaxo- observers) however, the most interesting part of his legal complaint (in regards to Glaxo’s conduct)- for me -is contained the following section:

Under the heading (on page 25) :

GSK Lies About Knowledge of Corruption and Refuses to Admit Why It Hired Plaintiffs

The Complaint states-

“…Witty argued, nonsensically, that the previous whistle-blower allegations were “quite different” from the more recent charges, saying, “they are two completely different sets of issues, we fully investigated the first and, of course, this has now surfaced in the last couple of weeks.”

This was a lie,

since “what surfaced” in the PSB investigation and raids of GSK offices in July was precisely the illegal activity that the whistleblower had documented and threatened to reveal in January…”

gsk-lies-1gsk-lies-2


What I find fascinating about all of this is, whenever GSK get embroiled in a scandal- the company’s PR machine seems to think that the public will swallow any crap that they spew out in regards to their conduct. They don’t seem to realize that they have absolutely no credibility with the general pubic. They are proven liars, deceivers, felons, and fraudsters. The company has been proven time and time again to be nothing but utterly corrupt to the core.

So why should we believe anything they say?

In short, we shouldn’t.

If GSK was a living human individual, we would likely consider them to be a compulsive liar, a sociopath, and an utterly reprehensible person. For the amount of damage (and death) that they have caused over the past few decades, we’d lock them up for life and throw away the key. However GSK isn’t a human individual, it’s a corporate entity made up from a hundred thousand individuals with one man at the helm- the CEO- Andrew Witty.

Witty is the boss at GSK, therefore surely he is responsible for the GSK China  bribery crisis because it happened under his watch? The document above seems to suggest that Witty (and indeed GSK) knew much more about the corruption in China, than has been admitted publicly, when it was first exposed.

It’s classic GSK behavior to deny and deflect the truth whenever a scandal occurs about the company. They have proven time and time again to be utterly untrustworthy so why would GSK’s China Bribe scandal be any different? or more to the point-why would GSK’s behavior be any different?..

In an interview with Evan Davis of the BBC, some months ago, Andrew Witty avoided Evan’s questions about GSK’s bribery network in China. Evan asked Mr Witty, in the China case, “was that normal behavior”?

(see clip here)

Evan Davis:

-“But you’re saying there are bad apples, and it goes wrong. Is that right, or is it – for example, in the China case. Was it that there was a bad apple and it went wrong, or was it that that was normal behaviour in certain markets, and it just got called out in that particular case?”

Andrew Witty:

-“For obvious reasons, I’m not going to get into all the details of that.”


It’s interesting that Witty chose not to discuss if GSK’s massive bribery scandal in China was normal behavior?

GSK’s China bribe scandal is a can of worms that Witty could never publicly delve into. There’s too much at stake for him, and for Glaxo to ever discuss their abhorrent behavior in China, however that might all change soon…

Glaxo’s conduct in China is shocking, and utterly disgraceful, and it’s a can of worms that’s just about to spill open with the release of details in Peter Humphrey’s recent writ against them.

In Peter Humphrey’s complaint it is alleged:

 – Between 2010-2013 GSK spent nearly $225 million on planning and travel services. Approx 44% of the sampled invoices were inflated and approximately 12% were for events that did not occur.

 – GSK set up a special “crisis management” team in order to bribe Chinese regulators with money and gifts. A GSK executive attempted to bribe a Chinese investigator with an IPad and a lavish dinner. All bribes were approved by the head of Chinese operations, Mark Reilly.


 – GSK planned to suppress evidence of its illegal bribery activities.


 – As far back as 2008, GSK China deliberately falsified its books and records in order to conceal its illegal practices in China. These included, bribery and promotion of drugs for purposes that have not been approved by the Chinese authorities.


 – GSK paid a patient RMB 50,000, who nearly died after being given Lamictal off-label. Despite having knowledge of Lamictal causing near death in this patient, GSK still told its reps to promote the use of Lamictal for off-label purposes.


 – GSK targeted ‘persuasive doctors’ in attempts to influence purchasing decisions at their hospitals. GSK are to said to have forged a connection with these doctors by taking them to expensive lunches and dinners and also giving them gifts and cash.


 – GSK paid between 500 and 1,000 doctors to go on an all-expenses paid holiday to locations such as Brazil, India, Israel, Greece, Japan and Hungary. GSK covered all costs, including cash to cover meals and sight-seeing excursions. These were disguised by GSK as “Conference trips.”


 – Head of Chinese operations, Mark Reilly, received a bribe in the form of ‘sexual relations’ in return for passing business on to China Comfort Travel, a travel agency who organised ‘conference sevices’ for GSK.


 – GSK paid doctors based on their prescription numbers.


 – GSK’s senior legal counsel, Jennifer Huang, asked private investigator, Peter Humphrey, to investigate the Public Security Bureau and to prepare an analysis of the Chinese political regime. Huang told Humphrey that she wanted to find out who’s who regarding the team who were investigating GSK.


 – Humphrey became concerned that GSK were trying to obstruct the investigation and declined to investigate state secrets.


 – Humphrey was also asked, by GSK, to look into the Ministry of Public Security, the Economic Crimes Investigation Department regarding the relationship between them and  the Public Security Bureau. Humphrey, once again, declined.


 – Head of Chinese operations, Mark Reilly, told Humphrey that the alleged whistleblower, Vivian Shi was “coming after him.” (Humphrey).  Reilly then fled China the following day.


 – GSK China told its employees to “destroy all non-compliant promotional materials and gifts.” They also implemented a new email system and deleted emails that were more than a year old. They claimed this was to “reduce unnecessarily legal costs.”…


Humphrey’s complaint against Glaxo is not just important in terms of how it further exposes Glaxo as a truly despicable, unethical, corrupt organization, but it must also be personally important for Peter too. Glaxo’s treatment of Peter and his wife throughout this whole debacle is extremely disturbing and sinister. (read the complaint here and see just how chilling Glaxo’s behavior is towards those who they consider utterly dispensable).

It’s obvious to me that Peter and his wife Yu Yingzeng were scapegoated by Glaxo. GSK’s top man in China Mark Reilly ran the bribery network, he was found guilty by the Chinese, but he got off, and he was sent back to the UK. Peter and Yu were imprisoned instead of Reilly. Their treatment in prison is deplorable, and their treatment by Glaxo, previous to their incarnation, during, and after has been equally bad.

I can relate to mistreatment from Glaxo, unfortunately I was prescribed one of their dangerous shoddy drugs (Seroxat), and if that horrific scandal is anything to go by, we should not be surprised at the depths that this horrible company will stoop in its pursuit of profits at the expense of human life…

From the New York Times:

“…The complaint, filed at the United States District Court in Philadelphia and made public on Wednesday, was brought by Peter Humphrey, who is British, and Yu Yingzeng, his wife, who is American.

The couple were detained in 2013 and found guilty by a Chinese court in 2014 after being asked by Glaxo to investigate a whistle-blower within the pharmaceuticals group.

They were convicted of illegally obtaining private records of Chinese citizens.

The couple said that Glaxo misled them by stating that the whistle-blower’s accusations of widespread corruption within the company were false. The company was fined a record 3 billion renminbi (nearly $500 million) in 2014 for paying bribes to doctors to use its drugs.”


It will be interesting to see how Peter Humphrey’s complaint against Glaxo progresses, and it will be even more interesting to see if Andrew Witty will be called forth as a witness if a trial occurs.

Perhaps the judge will ask Witty, what his definition of normal behavior is…

I guess we will have to wait and see.

However, in the meantime, I would like to ask Andrew Witty does he consider the following things ‘normal behavior’?

Was the off-label promotion of Seroxat/Paxil to teens (based on a bogus study-329) ‘normal behavior’ for Glaxo? (see here)

Is the production of contaminated products at Glaxo’s facilities considered ‘normal behavior’? (see here,  and here)

(For more examples of ‘normal’ Glaxo behavior see the hundreds upon hundreds of posts that I have posted about Glaxo on this blog for the past ten years- see the archives here)

Part 2 Of Bob Fiddaman’s Posts On Peter Humphrey’s Recently Filed Lawsuit Against GlaxoSmithKline…


http://fiddaman.blogspot.ie/2016/11/chinawhys-vs-gsk-claims-part-2.html

Sunday, November 20, 2016

ChinaWhys Vs GSK – The Claims – Part 2

Following on from the first parter, Lawsuit Alleges GSK’s Witty Lied to the Media – Part I, today sees part 2 (The claims of ChinaWhys against GSK) – Part 3 (Coming later this week) will focus on the incarceration of Peter Humphrey and his wife, Yu Yinzeng and also the rehiring of accused whistleblower, Vivian Shi)

Here is what Peter Humphrey and his wife, Yu Yinzeng, of ChinaWhys, are alleging…

 – Between 2010-2013 GSK spent nearly $225 million on planning and travel services. Approx 44% of the sampled invoices were inflated and approximately 12% were for events that did not occur.

 – GSK set up a special “crisis management” team in order to bribe a Chinese regulators with money and gifts. A GSK executive attempted to bribe a Chinese investigator with an IPad and a lavish dinner. All bribes were approved by the head of Chinese operations, Mark Reilly.

 – GSK planned to suppress evidence of its illegal bribery activities.

 – As far back as 2008, GSK China deliberately falsified its books and records in order to conceal its illegal practices in China. These included, bribery and promotion of drugs for purposes that have not been approved by the Chinese authorities.

 – GSK paid a patient RMB 50,000, who nearly died after being given Lamictal off-label. Despite having knowledge of Lamictal caussing near death in this patient, GSK still told its reps to promote the use of Lamictal for off-label purposes.

 – GSK targeted ‘persuasive doctors’ in attempts to influence purchasing descions at their hospitals. GSK are to said to have forged a connection with these doctors by taking them to expensive lunches and dinners and also giving them gifts and cash.

 – GSK paid between 500 and 1,000 doctors to go on an all-expenses paid holiday to locations such as Brazil, India, Israel, Greece, Japan and Hungary. GSK covered all costs, including cash to cover meals and sight-seeing excursions. These were disgusied by GSK as “Conference trips.”

 – Head of Chinese operations, Mark Reilly, reeived a bribe in the form of ‘sexual relations’ in return for passing business on to China Comfort Travel, a travel agency who organised ‘conference sevices’ for GSK.

 – GSK paid doctors based on their prescription numbers.

 – GSK’s senior legal counsel, Jennifer Huang, asked private investigator, Peter Humphrey, to investigate the Public Security Bureau and to prepare an analysis of the Chinese political regime. Huang told Humphrey that she wanted to find out who’s who regarding the team who were investigating GSK.

 – Humphrey became concerned that GSK were trying to obstruct the investigation and declined to investigate state secrets.

 – Humphrey was also asked, by GSK, to look into the Ministry of Public Security, the Economic Crimes Investigation Department regarding the relationship between them and  the Public Security Bureau. Humphrey, once again, declined.

 – Head of Chinese operations, Mark Reilly, told Humphrey that the alleged whistleblower, Vivian Shi was “coming after him.” (Humphrey).  Reilly then fled China the following day.

 – GSK China told its employees to “destroy all non-compliant promtional maeterials and gifts.” They also implemented a new email system and deleted emails that were more than a year old. They claimed this was to “reduce unnecessarily legal costs.”



Bob Fiddaman.

Back Stories from the Fiddaman Blog

Glaxo – The Sex Tape Scandal

GSK’s Mark Reilly Accused of Running a “massive bribery network”

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

GSK Hiked Product Prices to Fund Bribery Scam

GSK’s Sales Reps Want Their Money Back

GSK’s Private Investigator [The Video]

Peter Humphrey’s 2012 Presentation – Pharma Bribery

GSK’s Chinese Whispers and David Cameron

“GSK were really cagey”, Claims Whitehall Official.

Glaxo Hire Ropes & Gray to Delve Into its Chinese Operations.

GSK CHINA – Bribery was Rife 13 Years Ago

Witty Plays Down China Scandal

Witty Witty Bang Wang. The Glaxo Gangbang…Allegedly

Book Your Holidays With GSK Travel

Andrew Witty… I know narrrrrrrrthing

The Penny Drops for GSK’s Private Investigator.

GSK China Bought Patient’s Silence for $9,000

Lawsuit Alleges GSK’s Witty Lied to the Media – Part I

Bob Fiddaman’s New Post : ” Lawsuit Alleges GSK’s Witty Lied to the Media – Part I “…


http://fiddaman.blogspot.ie/2016/11/lawsuit-alleges-gsks-witty-lied-to.html

Thursday, November 17, 2016

Lawsuit Alleges GSK’s Witty Lied to the Media – Part I

Lawsuit Alleges GSK’s Witty Lied to the Media – Part I  
~ Bob Fiddaman
 

A 42 page complaint was filed on November 15, 2016, by Peter Humphrey and his wife, Yu Yingzeng, in relation to GSK’s nefarious activities in China which saw the pair incarcerated for around 2 years in Chinese slum-like conditions prison cells.

The complaint delves deep into the whole sordid affair and alleges bribery on a huge scale, more importantly, the complaint alleges that GSK hired the services of Humphrey and Yu in efforts to smokescreen the corruption in China, corruption, according to the complaint, that they had known about for many years. Furthermore, the 42 page document alleges that GSK’s CEO, Andrew Witty, lied to the media when he was asked about the corruption in China.

Humphrey and Yingzeng were the founders of ChinaWhys, a professional-services consultancy that specializes in discreet risk mitigation solutions, consulting and investigation services to corporate clients in matters of high sensitivity across Greater China and the Asia Pacific.

On April 15, 2013, Humphrey met with GSK’s Head of Chinese operations, Mark Reilly, April Zhao, GSK China legal counsel and Brian Cahill, also GSK legal counsel. It was at this meeting that Humphrey was told that GSK had been sent a series of emails from a whistleblower alleging widespread corruption – GSK told Humphrey that they believed they knew who the whistleblower was.

Vivian Shi had previously worked for GSK as a government affairs director, GSK had terminated her services with them in December 2012. According to the complaint GSK claimed that Shi had orchestrated a “smear campaign” against GSK involving a total of 23 emails that had been sent to Chinese officials throughout the country, a letter had also been sent to GSK’s ‘top management’ alleging widespread corruption in GSK’s pharmaceutical and vaccine business that had been approved by GSK China’s senior management.

These were allegations brought to Humphreys attention just months after GSK had been fined a record breaking $3 billion by the Department of Justice in America – the fine was handed down after a guilty plea by GSK who, after the settlement, entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement requires enhanced accountability, increased transparency and wide- ranging monitoring activities conducted by both internal and independent external reviewers.

One month after meeting with GSK officials Humphrey was told that GSK’s global CEO, Andrew Witty, had been made aware that GSK had been using a travel agent to channel kickback to customers and doctors throughout China. Days after Witty had been made aware, the whistleblower also sent a video to him and other senior management that showed GSK China’s Mark Reilly engaged in sexual activity – Reilly later claimed that the woman in the video was his “regular girlfriend”.

GSK officials told Humphrey that they had launched their own internal inquiry regarding the whistleblower allegation and that they were false. They told Humphrey, “There is nothing there”. This, according to the complaint, was a lie.

Humphrey and his wife offered to investigate the whistleblower allegations but GSK declined the offer, opting instead for Humphrey to investigate Vivian Shi, the woman they believed was the whistleblower.

Two months after Humphrey and Yu started their background search of Vivian Shi, GSK received another letter from the whistleblower alleging that GSK China continues to engage in systematic bribery of doctors, this email focused on GSK China’s botox business whereby the whistleblower claimed that…

GSK had a ‘pay to prescribe’ scheme that funneled money through a central source at Beijing Medical College whereby ‘lecture fee payments’ were made to doctors who could “…incentivize and reward doctors for prescribing Botox.”

At no point did GSK show either Humphrey or Yu this letter.

On June 12, 2013, the Wall Street Journal (WSJ) ran an article highlighting GSK China’s massive bribery network. In July of that year 4 senior GSK China executives were arrested and, according to Humphrey’s filed complaint, GSK CEO, Andrew Witty told the worlds media that “…it appears that certain senior executives in the Chinese business have acted outside of our processes and our controls to both defraud the company and Chinese healthcare system.” Witty also claimed that GSK’s Head office in London lacked knowledge of the whistleblower allegations and “had no sense of this issue.”

According to the complaint, this made no sense as since the previous month GSK did, indeed, “have a sense” of the issue since it announced its 4 month internal investigation into allegations of bribery and corruption in China and found “No evidence of corruption or bribery.”

The complaint states…

Witty argued, nonsensically, that the previous whistleblower allegations were “quite different” from the more recent charges, saying, “they are two completely different sets of issues, we fully investigated the first and, of course, this has now surfaced in the last couple of weeks.”

This was a lie, since “what surfaced” in the PSB investigation and raids of GSK offices in July was precisely the illegal activity that the whistleblower had documented and threatened to reveal in January.

The complaint was filed in The United States District Court for the Eastern District of Pennsylvania.

Humphrey and Yu are represented by Boies, Schiller & Flexner LLP

**Coming in Part 2**
– A full and comprehensive list of the allegations made by Peter Humphrey and Yu.
– GSK ask Humphrey to ‘overtly’ obstruct the Chinese government investigation.
– Evidence, including emails, to be destroyed as not to implicate any wrong-doing by the company.



Bob Fiddaman


Back stories.

Glaxo – The Sex Tape Scandal

GSK’s Mark Reilly Accused of Running a “massive bribery network”

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

GSK Hiked Product Prices to Fund Bribery Scam

GSK’s Sales Reps Want Their Money Back

GSK’s Private Investigator [The Video]

Peter Humphrey’s 2012 Presentation – Pharma Bribery

GSK’s Chinese Whispers and David Cameron

“GSK were really cagey”, Claims Whitehall Official.

Glaxo Hire Ropes & Gray to Delve Into its Chinese Operations.

GSK CHINA – Bribery was Rife 13 Years Ago

Witty Plays Down China Scandal

Witty Witty Bang Wang. The Glaxo Gangbang…Allegedly

Book Your Holidays With GSK Travel

Andrew Witty… I know narrrrrrrrthing

The Penny Drops for GSK’s Private Investigator.

GSK China Bought Patient’s Silence for $9,000

Brilliant New Post From Bob Fiddaman: “GSK China Bought Patient’s Silence for $9,000″…


As usual, Mr. Fiddaman hits the nail on the head…


 

http://fiddaman.blogspot.ie/2016/11/gsk-china-bought-patients-silence-for.html

Wednesday, November 09, 2016

GSK China Bought Patient’s Silence for $9,000

A truly fascinating read regarding the corruption in China, all committed by the hand of British based pharmaceutical giant, GlaxoSmithKline.

The New York Times (NYT) recently ran a superb article regarding GSK’s nefarious activities in China, activities that saw them plead guilty, a result of which saw them being handed down a $500 million dollar fine.

The article by David Barboza, although brilliant, is tantalizing, in as much that The Times claims to have in its possession emails and documents, none of which they have provided, at least in their entirety.

The China scandal is a story of greed, corruption, cover-ups, bribery and pay-offs, all combined with a sex scandal video and a company burying it’s head in the sand over its China practices – preferring instead to go after the person who blew the whistle on the whole sordid affair.

It’s a subject I covered many times on this blog (Links at the foot of this post) and one that seems to be rehashed with additions on a regular basis.

The Times article throws out some very interesting facts about the case that were previously kept under wraps – one such fact being that they (The Times) have evidence that “Glaxo “almost killed one patient by illegally marketing its drug Lamictal,” said the email, which was obtained by The Times. “GSK China bought the patient’s silence for $9,000.””

Glaxo buying a patient’s silence? Surely not?

There was me thinking they only did that in litigation, Paxil withdrawal (Over 3,000 patients ‘paid off’) – Paxil Birth defects (Over 800 patients ‘paid off’)

So, who was the patient in receipt of Glaxo’s $9,000, moreover, what did this patient have that GSK didn’t want others to see?

According to the NYT…

The email was one of nearly two dozen that the whistle-blower sent over the course of 17 months to Chinese regulators, Glaxo executives and the company’s auditor, PricewaterhouseCoopers.

In 2012 Glaxo plead guilty to a whole host of violations throughout America, the guilty plea resulted in a record breaking fine of $3 billion. At the time, Glaxo Chief, Andrew Witty, pledged, “We’re determined this is never going to happen again.”

Witty, who had been made aware of the unfolding stench in China shortly after the 2012 guilty plea in the US, is stepping down from his CEO position in April next year – It’s quite a legacy he has left behind, one which he took over from former Chief, JP Garnier who, in essence, oversaw the corruption in America and left Witty to suck up the fallout.

What an abhorrent company this is. Corruption, bribery (of officials and patients) and the manufacturer of prescription meds that have either killed people or disfigured them in such a way that they need to continue having surgery for the rest of their lives. Let’s not forget those that have suffered as a result of becoming addicted to GSK’s medications either.

The Times article also digs deeper into the involvement of Mark Reilly, who, at the time, was Head of GSK’s China operations. They claim…

An email alleged that Mr. Reilly, a British national who had helped manage the company’s China operation for four years, was complicit in a bribery scheme tied to a travel agency called China Comfort Travel, or C.C.T. According to the email, Glaxo funneled money through the travel agency to pay off doctors. The travel agency also supplied Mr. Reilly with women, as a way to secure that business.

“In order to acquire more business, C.C.T. bribed Mark Reilly, the general manager of GSK (China) with sex,” the email said. “Mark Reilly accepted this bribery and made C.C.T. get the maximized benefits in return.”

That’s some perk to have!  China Comfort Travel bring a whole new meaning to the word ‘comfort’.

Any jobs going whereby the employer offers a bonus of playing hide the salami?

I’m sure red-blooded males would have been first in-line for such a job working for a company complicit in fraudulent activities. Sadly, for those red-blooded males at least, Reilly was offered (and took) the perk – I wonder if he claimed for the 15 minutes of overtime too? (Assuming that Reilly could last that long in the sack)

When faced with over 17 months of emails from the whistleblower Glaxo decided to seek help, they did so by hiring a private investigator, Peter Humphrey and his wife, Yu Yingzeng.

Humphrey did some digging and, at the time, provided information to Glaxo that pointed to the possible whistleblower. Vivian Shi, was a 47-year-old executive handling government affairs in Glaxo’s Shanghai office, I say former because she was previously fired by GSK for their belief (Before Humphrey was hired) that she was behind the whistleblowing allegations. The ‘official’ line of her dismissal was that she had been falsifying travel expenses.

Humphrey, it appears, was merely suggesting that Shi may have been involved – he, at no time, ever provided GSK with any evidence that their former executive was the one who was whistleblowing. Shi, who remember had already left GSK, denied any part in the whole Chinagate scandal.

During his investigations Humphrey obtained information that was deemed to be by false means according to Chinese officials. Both he and his wife were later arrested, charged then sent to prison. Meantime, Reilly, who was the mastermind of the whole scam, was sent back home to the UK – No jail time. It’s unknown what Reilly is doing today, presumably he doesn’t work for GSK in any capacity, although I wouldn’t put it past them to re-hire him, just as they did with Vivian Shi, the very person they had fired because they thought she was the one blowing the whistle on its Chinese operations.

Remarkably, GSK re-hired Shi last year, although it is unclear in what capacity. (See Glaxo and Former Whistleblower Suspect Reunite)

GSK must be a truly great company to work for, not only do they offer, by proxy, free blowjobs to heads of operations but they re-hire you after previously sacking you for, ahem, “falsifying travel expenses.”

The Times article is a must read and once again highlights how GSK prefer to target people who bring the company’s misdemeanors to their attention rather than target the person carrying out the misdemeanors.

GSK Corporate motto claims, “We are dedicated to improving the quality of human life by enabling people to do more, feel better, live longer.” – I just never knew this included blowjobs via complicit bribery deals – the re-hiring after breaking rules – and buying patients silence.

Nice job (blow) Glaxo!

Bob Fiddaman

Back Stories

Glaxo – The Sex Tape Scandal

GSK’s Mark Reilly Accused of Running a “massive bribery network”

I’m Just a Blogger – Here’s GSK Served on Prawn Crackers

GSK Hiked Product Prices to Fund Bribery Scam

GSK’s Sales Reps Want Their Money Back

GSK’s Private Investigator [The Video]

Peter Humphrey’s 2012 Presentation – Pharma Bribery

GSK’s Chinese Whispers and David Cameron

“GSK were really cagey”, Claims Whitehall Official.

Glaxo Hire Ropes & Gray to Delve Into its Chinese Operations.

GSK CHINA – Bribery was Rife 13 Years Ago

Witty Plays Down China Scandal

Witty Witty Bang Wang. The Glaxo Gangbang…Allegedly

Book Your Holidays With GSK Travel

Andrew Witty… I know narrrrrrrrthing

The Penny Drops for GSK’s Private Investigator.

Peter Humphrey : UK banks blacklist Briton jailed by China..


https://www.ft.com/content/89208d9a-979a-11e6-a80e-bcd69f323a8b

UK banks blacklist Briton jailed by China

HSBC and RBS pull services from private investigator Peter Humphrey

Peter Humphrey © CCTV News

 

A British private investigator jailed in China after GlaxoSmithKline’s bribery scandal has been blacklisted by banks, including HSBC and Royal Bank of Scotland, after authorities helped bring him back to the UK.

Peter Humphrey, who was convicted after a closed-door trial in 2014 of illegally obtaining information on Chinese citizens, told the Financial Times that HSBC had withdrawn his personal and business accounts without explanation on his repatriation last year after a decades-long relationship. RBS’s offshore arm, with whom he had banked since 2012, also pulled services.

While the banks declined to comment to the FT on specific cases, Mr Humphrey believes that the reason they closed his accounts was because of a confidential database used by 49 of the world’s 50 biggest banks, including HSBC and RBS.

World-Check, owned by Thomson Reuters, is used by banks, law firms and government agencies to research individuals and go through sanctions lists. Banks use it as part of their “know your client” checks, or KYC for short, that they must carry out as part of anti-money-laundering rules.

But detractors allege that the database serves as an unaccountable blacklist, aggregating unverified blogs and newspaper articles, including some from state-sponsored sources, as well as court judgments from around the world.

The database’s own fine print states that it provides merely a snapshot that “should be read by users in the context of the fuller details available in the external sources provided” and cautions their customers to verify the information. Individuals can request changes to inaccurate information.

World-Check said in a statement that it aggregated information from government watch lists and sanctions databases, as well as “publicly available information from reputable sources in order to help clients comply with anti-money laundering and counter-terrorist financing regulations. Customers can then use this data to follow their own regulatory compliance policies and procedures.”

HSBC said in a statement: “HSBC has a moral and regulatory obligation to have systems and controls in place to manage financial crime risk. As part of managing this risk, we periodically review our customer relationships and in doing so we gather information from a wide range of sources and take a number of factors into consideration.”

RBS declined to comment.

An insider at one high-street bank said that while cross-checking might occur for potentially lucrative new customers, a red flag for anyone else would be enough to terminate any relationship.

World-Check’s results for Mr Humphrey, seen by the FT, group him with GSK and its former employees charged with bribery, even though he was not part of that investigation. The records go on to state that he was arrested then subsequently jailed “for alleged illegal trafficking of personal information”.

“That is erroneous and injurious; there was no ‘trafficking’ or buying and selling of information. We produced in-depth reports,” said Mr Humphrey. “The database also equates the validity of convictions in a country like China with those of countries with a long rule of law.”

Mr Humphrey and his wife were detained by Chinese authorities in 2013 after helping GSK, which was not mentioned during their trial, identify the source of a secretly filmed sex tape of its then top executive in China in bed with his girlfriend.

GSK was fined £300m in 2014 by a Chinese court for funnelling billions of renminbi to hospitals, doctors and officials in an attempt to boost sales in one of the world’s biggest and fastest-growing drug markets. The company remains under investigation by the UK’s Serious Fraud Office.

Mr Humphrey is not the only person to take issue with the database. Maajid Nawaz, a former Liberal Democrat candidate and co-founder of an anti-extremist think-tank, was incorrectly labelled by World-Check as having terrorist links. He has now instructed Mark Lewis at Seddons, the solicitor used by celebrities and other victims of the phone-hacking scandal, to pursue a claim against the company.

Iqbal Asaria, an academic and former Bank of England adviser on Islamic finance who was made a CBE in 2005, was also erroneously labelled as having links to terrorism on the database after it picked up unsubstantiated allegations on a blog.

Thomson Reuters declined to comment on any specific case, citing data privacy laws. The FT competes with the company in providing news.

Banks have taken a conservative approach to KYC since US authorities in particular started cracking down on money-laundering. HSBC is especially sensitive since it was landed with a $1.9bn fine in 2012 from the US Department of Justice. It has taken a cautious approach and has closed entire business lines if they are deemed too risky.

But regulators are concerned that banks have taken “de-risking” too far, shutting out charities, innocent individuals, or indeed whole countries, deemed by banks to be too dicey.

According to a report published this year for the Financial Conduct Authority, banks have severed ties with clients they deem risky at an accelerated rate over the past three years in response to stretched compliance teams and a reduced appetite for risk in the wake of fines.

Copyright The Financial Times Limited 2016. All rights reserved. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web.

These Recent Articles (From November 2016) On GSK’s Bribery Operation In China From The New York Times Make For Interesting Reading…


SHANGHAI — Peter Humphrey was in the bathroom of his Shanghai apartment when the police kicked the door off its hinges and knocked him to the ground. Nearly two dozen officers stormed his home. They confiscated files, laptops and hard drives related to his work as a corporate investigator.

Mr. Humphrey and his wife, Yu Yingzeng, were taken to Building 803, a notoriously bleak criminal investigation center normally reserved for human smugglers, drug traffickers and political activists. Sleep-deprived and hungry, he was transferred later that day to a detention house, placed in a cage and strapped to an iron chair. Outside, three officers sat on a podium and demanded answers.

Mr. Humphrey knew the reason for the harsh interrogation. He and Ms. Yu had been working for GlaxoSmithKline, the British pharmaceutical maker under investigation in China for fraud and bribery.

The Glaxo case, which resulted in record penalties of nearly $500 million and a string of guilty pleas by executives, upended the power dynamic in China, unveiling an increasingly assertive government determined to tighten its grip over multinationals. In the three years since the arrests, the Chinese government, under President Xi Jinping, has unleashed the full force of the country’s authoritarian system, as part of a broader agenda of economic nationalism.

China Rules

Articles in this series examine how multinational corporations doing business in China must adjust to an increasingly assertive state.

  • How China Won the Keys to Disney’s Magic KingdomJune 14, 2016

Driven by the quest for profits, many multinationals pushed the limits in China, lulled into a sense of complacency by lax officials who eagerly welcomed overseas money. Glaxo took it to the extreme, allowing corruption to fester.

Continue reading the main story

When bribery accusations surfaced, the company followed the old playbook, missing the seismic changes reshaping the Chinese market. Rather than fess up, Glaxo tried to play down the issues and discredit its accusers — figuring officials wouldn’t pay attention.

Along the way, there were bribes of iPads, a mysterious sex tape and the corporate investigator, who gave his operations secret code names. The company’s missteps are laid bare in emails, confidential corporate documents and other evidence obtained by The New York Times, as well as in interviews with dozens of executives, regulators and lawyers involved in the case.

The aftershocks of the Glaxo case are still rippling through China. The authorities have unleashed a wave of investigations, putting global companies on the defensive. The government has intensified its scrutiny of Microsoft on antitrust matters this year, demanding more details about its business in China. And just two weeks ago, the authorities detained a group of China-based employees, including several Australian citizens, working for the Australian casino operator Crown Resorts, on suspicion of gambling-related crimes.

Companies are racing to find new strategies and avoid getting locked out of China, the world’s second-largest economy after the United States. Disney and Qualcomm are currying favor with Chinese leaders. Apple redid its taxes in China after getting fined. Some multinationals are training employees in how to deal with raids.

The crackdown has prompted a complete rethinking for Glaxo — and for much of the pharmaceutical industry. To appease the government, drug makers have promised to lower prices and overhaul sales practices.

“For a long time, there’d been this policy of going easy on foreign enterprises,” said Jerome A. Cohen, a longtime legal adviser to Western companies. “The government didn’t want to cause embarrassment or give outsiders the impression that China is plagued with corruption. But they’re not thinking like that anymore.”

The Glaxo case was fueled by missed clues, poor communication and a willful avoidance of the facts. For more than a year, the drug maker brushed aside repeated warnings from a whistle-blower about systemic fraud and corruption in its China operations.

The company’s internal controls were not robust enough to prevent the fraud, or even to find it. Internally, the whistle-blower allegations were dismissed as a “smear campaign,” according to a confidential company report obtained by The Times.

Glaxo just wanted to make its problems go away. It offered bribes to regulators. It retaliated against the suspected whistle-blower. It hired Mr. Humphrey and Ms. Yu to dig into the woman’s background, family and government ties, as a way to discredit her. And Glaxo may even have gone after the wrong person, documents and emails obtained by The Times suggest.

Photo

Yu Yingzeng inside a police vehicle in Shanghai in August 2014. She and her husband, Mr. Humphrey, worked together and were arrested together. Credit Aly Song/Reuters

None of it mattered. The allegations were true.

Prosecutors charged the global drug giant with giving kickbacks to doctors and hospital workers who prescribed its medicines. In 2014 Glaxo paid a nearly $500 million fine, at the time the largest ever in China for a multinational. Five senior executives in China pleaded guilty, including the head of Glaxo’s Chinese operations, a British national, in a rare prosecution of a Western executive. With Glaxo embroiled in scandal, sales plummeted in China, the company’s fastest-growing market.

Glaxo has declined multiple requests for comment, referring instead to earlier statements. Glaxo “fully accepts the facts and evidence of the investigation, and the verdict of the Chinese judicial authorities,” one statement read. “GSK P.L.C. sincerely apologizes to the Chinese patients, doctors and hospitals, and to the Chinese government and the Chinese people.”

Mr. Humphrey and Ms. Yu, both in their late 50s at the time of their arrests, were punished too. The couple spent two years in prison for illegally obtaining government records on individuals.

Mr. Humphrey was crowded into a cell with a dozen other inmates. There were no beds or other furniture, just an open toilet and a neon light overhead. During his incarceration, Mr. Humphrey said, he suffered back pain, a hernia and a prostate problem that was later diagnosed as cancer.

“I was in a state of complete shock and breakdown,” said Mr. Humphrey, who was released along with his wife in July 2015. “I was physically broken down and mentally blown away. I didn’t sleep for 45 days.”

Photo

About seven weeks after Peter Humphrey was arrested in China, he and his wife, Yu Yingzeng, appeared on China Central Television. They spent about two years in prison.

A Whistle-Blower Emerges

An anonymous 5,200-word email in January 2013 to the Glaxo board laid out a detailed map to a fraud in the Chinese operations.

Written in perfect English, the email was organized like a corporate memo. Under the header “Conference Trip Vacations for Doctors,” the whistle-blower wrote that medical professionals received all-expenses-paid trips under the guise of attending international conferences. The company covered the costs of airline tickets and hotel rooms, and handed out cash for meals and sightseeing excursions.

In a section labeled “GSK Falsified Its Books and Records to Conceal Its Illegal Marketing Practices in China,” the email explained how Glaxo was pitching drugs for unapproved uses. As an example, the whistle-blower said the drug Lamictal had been aggressively promoted as a treatment for bipolar disorder, even though it had been approved in China only for epilepsy.

Glaxo “almost killed one patient by illegally marketing its drug Lamictal,” said the email, which was obtained by The Times. “GSK China bought the patient’s silence for $9,000.”

The email was one of nearly two dozen that the whistle-blower sent over the course of 17 months to Chinese regulators, Glaxo executives and the company’s auditor, PricewaterhouseCoopers.

How the Case Unfolded

JANUARY 2013 The whistle-blower sends a 5,200-word email to the Glaxo chairman, senior executives and the company’s outside auditor. The email, like the previous ones to authorities, describes a systemic fraud and bribery scheme. The allegations are dismissed by the company as a “smear campaign.”

See how the fallout unfolded »

When the authorities pressed Glaxo, the company was dismissive. It failed to properly investigate the allegations. It didn’t beef up its internal controls. And it didn’t change its marketing practices.

The decision was calculated. In the decades since China began opening its economy, most multinationals had avoided scrutiny over bribery. China needed overseas companies to help develop its economy, by setting up manufacturing operations and creating jobs. The authorities were reluctant to jeopardize investment, so they took a softer approach to enforcement.

When companies did run into trouble, fines were tiny. The rare cases tended to be colored by politics. Seven years ago, the Chinese authorities detained executives from the global mining giant Rio Tinto on suspicion of stealing state secrets. The charges were eventually downgraded to bribery, and the company avoided punishment.

By the time Glaxo’s fraud bubbled to the surface, China had changed.

Over the last decade, China has emerged as an economic powerhouse, but it took off even more as the rest of the world slowed after the financial crisis. That gave China the upper hand with overseas companies, which were increasingly dependent on profits from the country’s growing consumer base.

The economic might coincided with the Communist Party’s increasingly nationalistic stance. The authorities in China, already undertaking a severe crackdown on Chinese companies, wanted to show that, like American regulators, they could also penalize and sanction global companies.

And it was no secret that big drug makers were violating the law in China.

Years earlier, the consulting firm Deloitte warned about rampant corruption in China’s pharmaceutical market. As Deloitte found, doctors and health care workers were poorly compensated, so they could easily be induced to write more prescriptions with offers of cash, gifts, vacations and other benefits. Big drug makers, eager for growth, willingly obliged.

“The remarkable thing is that China is a more hospitable environment to this type of corruption, because it’s a market where doctors and hospitals are heavily reliant on drug sales,” said Dali Yang, who teaches at the University of Chicago and has studied the industry. “They were like fish swimming in water.”

American investigators had punished several major drug companies for such behavior abroad. In 2012, Eli Lilly agreed to pay $29 million, and Pfizer $45 million, to settle allegations that included employees’ bribing doctors in China. In settling the cases, neither company admitted or denied the allegations.

That summer, Glaxo agreed to pay $3 billion in fines and pleaded guilty to criminal charges in the United States for marketing antidepressants for unapproved uses, failing to report safety data on a diabetes drug and paying kickbacks. The case was built off tips from several whistle-blowers.

After that, Glaxo’s chief executive, Andrew Witty, pledged, “We’re determined this is never going to happen again.”

But it did — in China.

Photo

Prime Minister David Cameron of Britain, right, speaking to Andrew Witty, chief executive of GlaxoSmithKline, during a visit in March 2012 to one of the company’s plants in Ulverston, northern England. Credit James Glossop/Reuters

Redirecting Bribes

In early 2013, Glaxo realized it couldn’t ignore the problems. The authorities were asking questions. The whistle-blower continued to send emails.

So the company tried another common gambit in China: bribing officials.

The company set up a special “crisis management” team in China and began offering money and gifts to regulators.

That strategy had worked in the past. A company, often using a middleman, would try to soothe officials and regulators, offering gifts and favors.

One government agency had received multiple emails from the whistle-blower, and Glaxo targeted multiple branches of the agency, according to state media reports. One executive tried to cozy up to a Shanghai investigator with an iPad and a dinner totaling $1,200, another Glaxo employee said in a statement to the police. When that executive asked for money to bribe the Beijing branch, Mark Reilly, the head of the company’s Chinese operations, gave the “go ahead.”

Another executive with Glaxo’s Chinese operations bribed regulators to focus on “unequal competition,” rather than a more punitive investigation into “commercial bribery.” The goal, that executive admitted in a statement, was to limit any potential fine to about $50,000. It didn’t work.

As pressure mounted, the case took a bizarre turn, setting Glaxo on a collision course with the government.

In March 2013, Glaxo’s chief executive and five other senior executives in the company’s London headquarters received an anonymous email with a media file. In it, a grainy video showed Mr. Reilly, the executive in China, engaged in a sexual act with a young Chinese woman.

The attached email alleged that Mr. Reilly, a British national who had helped manage the company’s China operation for four years, was complicit in a bribery scheme tied to a travel agency called China Comfort Travel, or C.C.T. According to the email, Glaxo funneled money through the travel agency to pay off doctors. The travel agency also supplied Mr. Reilly with women, as a way to secure that business.

“In order to acquire more business, C.C.T. bribed Mark Reilly, the general manager of GSK (China) with sex,” the email said. “Mark Reilly accepted this bribery and made C.C.T. get the maximized benefits in return.”

Glaxo later discovered that the video had been shot clandestinely, in the bedroom of Mr. Reilly’s apartment in Shanghai. Analysts working for the company said it had been edited to disguise the location.

Glaxo executives in London were shocked. They deemed the video a serious breach of privacy, involving a possible break-in at the home of a senior executive in China. Mr. Reilly moved to a more secure residence.

Project Scorpion

Like many global companies, Glaxo has a code of conduct that encourages employees to report fraud or wrongdoing without fear of retaliation by the company. In many countries, including China, the rights of whistle-blowers are protected by law.

Glaxo didn’t seem to care.

By the time the video surfaced, Glaxo already had its suspicions about the identity of the whistle-blower. Months earlier, the company had fired Vivian Shi, a 47-year-old executive handling government affairs in Glaxo’s Shanghai office. The official reason for Ms. Shi’s firing was falsifying travel expenses. In fact, she was dismissed because the company believed she was the whistle-blower, according to confidential corporate documents obtained by The Times.

Ms. Shi did not return multiple calls for comment.

After receiving the video, Glaxo took more aggressive action, seeking to discredit Ms. Shi, who had already left the company.

How the Case Unfolded

MARCH 2013 Top Glaxo executives in London receive another whistle-blower email, this time showing Mark Reilly, the head of the company’s operations in China, engaged in a sexual act in his apartment.

See how the fallout unfolded »

At that point, in the spring of 2013, the company turned to Mr. Humphrey, the investigator. He ran ChinaWhys, a small risk consultancy firm that advised global companies like Dell and Dow Chemical.

His firm was engaged in what he called “discreet investigations,” helping multinationals cope with difficult situations like counterfeiting and embezzlement. Short in stature, with a shock of white hair, Mr. Humphrey portrayed himself as a kind of modern-day Sherlock Holmes.

“He likes a good adventure and likes solving cases,” said his friend Stuart Lindley, who runs a financial services company in China. “But he was definitely aware that some of that stuff was risky.”

In April 2013, Mr. Reilly met with Mr. Humphrey at Glaxo’s glass office tower near People’s Square in central Shanghai. According to meeting notes obtained by The Times, they discussed the emails, the sex video and Ms. Shi, the suspected whistle-blower. Mr. Reilly told the investigator that she held a grudge against Glaxo.

At the meeting, Mr. Reilly asked the investigator to look into the break-in at his apartment. But he made clear that he also wanted to assess what power and influence Ms. Shi might have with the government.

Legal experts say Mr. Reilly should not have been put in charge.

“The executive so accused has an obvious conflict of interest in overseeing such an investigation,” said John Coates, a Harvard Law School professor. “Even if the executive were entirely innocent of the whistle-blower’s charge, giving that same executive the role of investigating the whistle-blower smacks of retaliation.”

Efforts to reach Mr. Reilly, who has since left the company, were unsuccessful.

Using the code name Project Scorpion, Mr. Humphrey and his staff spent the next six weeks working undercover, gathering evidence. They visited Lanson Place, the upscale apartment complex where Mr. Reilly lived when the sex tape was made. They created a dossier on the suspected whistle-blower, searching for motives and ties to high-ranking officials or regulators. They interviewed former co-workers, scrutinized her résumé and scoured the web for information about her father, a former health official.

Glaxo may have crossed a line in this regard, putting the company more sharply in the government’s sights.

As part of the investigation, Mr. Humphrey turned to a Chinese detective to acquire a copy of Ms. Shi’s household registration record, or hukou. The official document contained information about her husband and daughter. The authorities had warned private detectives about acquiring confidential government documents.

“This type of household information is supposed to be private,” said John Huang, a former government official who is now managing partner at McDermott, Will & Emery in Shanghai. “But people were buying and selling it.”

Glaxo got little payoff from the investigation.

On June 6, 2013, Mr. Humphrey delivered a 39-page report to Glaxo that said Ms. Shi was probably the whistle-blower and even had a “track record of staging similar attacks” at a previous job. But the report included no evidence linking her to the emails or the sex video, according to a draft obtained by The Times.

Glaxo’s strategy of bribery and discrediting ultimately failed.

With the Chinese government in the midst of a crackdown on corruption, the police carried out a series of raids on June 27, 2013. They seized files and laptops from multiple Glaxo offices and interrogated dozens of employees. In Shanghai, four senior executives were detained. Investigators also raided the offices of several travel agencies that had worked closely with Glaxo, including China Comfort Travel.

A week later, the police stormed Mr. Humphrey’s apartment in Shanghai. He and his wife were charged with violating privacy laws.

Mr. Humphrey declined to comment on the specifics of the Glaxo case. His son defended his work, saying Glaxo engaged him “under false pretenses.” “My father is an honorable and law-abiding man,” said the son, Harvard Humphrey.

When prosecutors announced the case against Glaxo in July 2013, several weeks after arrests began, their allegations closely mirrored those of the whistle-blower. They described an elaborate scheme to bribe doctors and workers at government-owned hospitals using cash that had been funneled through a network of 700 travel agencies and consulting firms.

“It’s like a criminal organization: There’s always a boss, and in this case GSK is the boss,” said Gao Feng, one of the lead investigators.

Glaxo said little about the developments until July 15, when several high-ranking executives confessed from prison on state-run television. After that, the company capitulated, issuing a blanket statement for its misdeeds: “These allegations are shameful and we regret this has occurred.”

Cleaning Up Corruption

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In this screenshot, Mark Reilly, center, the head of Glaxo’s operations in China, was escorted by the police to the courtroom to hear his sentence in September 2014 at the Changsha Intermediate People’s Court in the Hunan Province in central China. Credit Imaginechina

Dressed in a dark suit and a blue tie, Mr. Reilly, the Glaxo executive, was led in handcuffs into a small courtroom in the city of Changsha, in central China, in September 2014. With security guards behind him, he stood alongside four other senior Glaxo executives as a judge read the charges.

“The defendant company GSKCI is guilty of bribing nongovernment personnel and will be fined 3 billion yuan,” the judge, Wu Jixiang, said sternly, referring to Glaxo’s Chinese name. The company and the executives, having confessed, were given relatively light sentences, the court said.

Mark Reilly was sentenced to three years in prison and ordered to be expelled from China.

After handing down that sentence, the judge turned to Mr. Reilly.

“Do you obey the court’s verdict? Do you appeal?” he asked.

Mr. Reilly said that he would not challenge the verdict. Because he was swiftly deported, he will not serve prison time in China.

Glaxo is still trying to clean up the mess.

In China, Glaxo has promised to overhaul its operations and has put in place stricter compliance procedures. The company has changed the way its sales force is compensated and has eliminated the use of outside travel agencies.

Glaxo has also tightened oversight of expenses and cash advances, areas central to the case. Employees must now send in photographs of the guests and food, to verify that the meetings took place.

And in August 2015, Glaxo tried to make amends by rehiring Ms. Shi, an acknowledgment that the company had erred in firing an employee suspected of being a whistle-blower.

But the decision also hinted at a more troubling admission — that Glaxo had targeted the wrong person. There are indications that Ms. Shi was not the whistle-blower, and that there may have been more than one person.

The emails sent to regulators were written in fluent English and came mostly from a Gmail account. The email with the sex video came from a local Chinese account and was written in poor English. The only similarity was the anonymity.

The Times sent emails to both accounts and got a response from just one, the person who had written the detailed emails to the Chinese authorities and Glaxo. “You have reached who you are looking for,” the person replied.

In a series of exchanges, the author denied being Ms. Shi, acting in concert with her or sending the video. The person said Glaxo had erroneously blamed Ms. Shi for the emails and never found the actual whistle-blower.

The Times was unable to verify the identity of the person, who described working in Shanghai but declined to come forward for fear of retribution.

“I didn’t reveal to GSK personnel that I was the whistle-blower because doing so would have placed me in potential physical jeopardy,” the whistle-blower wrote in an email to The Times. “You understand that criminals — you know that they were convicted later in Chinese courts — were in charge of GSK China at that time, and I truly believe that they would have harmed me in some fashion had they discovered my identity. ”


http://www.nytimes.com/2016/11/02/business/international/timeline-glaxo-fallout-china.html

After a whistle-blower working for one of the world’s biggest pharmaceutical companies began sending anonymous tips about fraud and corruption inside its operation in China, authorities there moved in. They arrested top executives and corporate detectives the company had hired to track down the whistle-blower. Here is how the events transpired.

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Credit Aly Song/Reuters

China Rules

Articles in this series examine how multinational corporations doing business in China must adjust to an increasingly assertive state.

    December 2011 A self-described whistle-blower working inside Glaxo sends an email to Chinese regulators, detailing fraud and corruption in the pharmaceutical maker’s Chinese operations. It is the first of about two dozen emails sent over a 17-month period.

    April 2012 Glaxo executives in China begin hearing that a whistle-blower has been sending documents to Chinese regulators claiming widespread corruption at the company.

    July 2012 The company pleads guilty in the United States to criminal charges for improper drug marketing and kickbacks to doctors. The company’s chief executive, Sir Andrew Witty, pledges that it “is never going to happen again.”

    December 2012 Vivian Shi, the head of government affairs for Glaxo in China, is fired, supposedly for falsifying travel expenses. But the real reason, according to internal documents, is that Ms. Shi is suspected of being the whistle-blower.

    January 2013 The whistle-blower sends a 5,200-word email to the Glaxo chairman, senior executives and the company’s outside auditor. The email, like the previous ones to authorities, describes a systemic fraud and bribery scheme. The allegations are dismissed by the company as a “smear campaign.”

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    “This illegality almost killed a person,” a whistle-blower wrote to Chinese regulators in January 2013.

    March 2013 Top Glaxo executives in London receive another whistle-blower email, this time showing Mark Reilly, the head of the company’s operations in China, engaged in a sexual act in his apartment.

    April 2013 Glaxo hires ChinaWhys, a private consulting firm run by Peter Humphrey and his wife, Yu Yingzeng, to investigate the suspected whistle-blower and a break-in at Mr. Reilly’s home. The investigation is code-named “Project Scorpion.”

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    A whistle-blower alleged that a Glaxo executive in was being bribed with sex. Notes from a Glaxo meeting in April 2013 describe a graphic video attached the the whistleblower’s email.

    June 2013 Mr. Humphrey presents the findings of his investigation to Glaxo. Although his report offers no evidence connecting Ms. Shi to the emails, he notes the suspected whistle-blower has a “track record of staging similar attacks.”

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    “She has a past track record of staging similar attacks,” stated a private investigator’s report in June 2013.

    June 2013 The police carry out a series of coordinated raids on Glaxo offices throughout China, detaining four executives, including the country’s chief legal officer. Several travel agencies working closely with Glaxo are also raided.

    July 10, 2013 Mr. Humphrey and Ms. Yu, the private investigators hired by Glaxo, are detained by the police.

    July 15, 2013 At a news conference in Beijing, prosecutors accuse senior executives at Glaxo’s Chinese operations of running an elaborate scheme to bribe doctors and hospital workers, describing it as an “organized crime operation.”

    July 16, 2013 Four Chinese executives at Glaxo confess on state television to the bribery and fraud scheme.

    July 18, 2013 Glaxo’s finance chief is barred from leaving China.

    August 2013 Mr. Humphrey and Ms. Yu are formally arrested in Shanghai.

    August 2014Mr. Humphrey and Ms. Yu are convicted of illegally obtaining government records about individuals during their corporate investigations, a charge they denied. They each served two years in prison.

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    In December 2013, a U.S. government consular detailed the jail conditions of Mr. Humphrey’s wife Yu Yingzeng.

    Sept. 19, 2014 At a one-day trial held in secret, Mr. Reilly, the head of Glaxo’s Chinese operations, and other company executives plead guilty to fraud and bribery. Glaxo agrees to pay a $500 million fine. Mr. Reilly is deported from China.

    A Game Called Big Pharma… (Peter Humphrey On BBC Radio)


    Interesting discussion on BBC’s ‘Business Daily’ yesterday- with an interview with Peter Humphrey (who was unjustly jailed in GSK’s china-bribe scandal a few years ago). { LISTEN HERE } -Also as part of the discussion, the panel highlights Tim Wicksteed’s ‘A Game Called Big Pharma‘ which is a real game that echoes the real-life shenanigans of Big Pharma (such as GSK’s bribery and corruption etc).

    The most interesting part of the interview (second link down) is with Peter Humphrey in the second half of the recording, it’s well worth a listen.

    Peter worked for most of the well known pharmaceutical companies for 15 years and in this interview he says- he thinks that the ‘quality of leadership’ by pharmaceutical companies on a China level and a Global level,has a lot to do with the corporate strategies of  the pharmaceutical companies themselves.

    Perhaps, it is these corporate strategies which have an affect upon how these corporations behave? (or in the case of GSK- misbehave).

    Andrew Witty was leading GSK for many years up until the China-Bribe scandal. How much he knew about what was going in with GSK’s operations in China leading up to the scandal, is anyone’s guess…

    One thing is for sure though, these corporations (like GSK) act like mafioso. They often hover far above the law, and until the top executives are held accountable for crimes that the corporate entity commits, nothing will change.

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    http://www.bigpharmagame.com/

    http://www.bbc.co.uk/programmes/p002vsxs/episodes/downloads

     

    Big Pharma