The controversial family at the heart of the U.S. opioid epidemic is leaving the scandal behind after a billion-dollar settlement. The family’s «financial maneuvering» offshore drew criticism from the judge who vetted the deal.
The Sackler family and their company, Purdue Pharma, clinched a $4.5 billion settlement in a U.S. bankruptcy court overnight, according to «NPR». The deal protects the Sacklers, collectively worth an estimated $11 billion, from any further lawsuits or a grab of their considerable assets.
The pact marks a milestone in the years-long attempt to get the ultra-wealthy Sacklers to make amends for their role in a drug epidemic that has cost more than 500,000 lives in the U.S. The family has gone from a welcome, wealthy benefactor to being shunned in philanthropy, including in Switzerland, and society.
Offshore Money
The saga illustrates too the balancing act for offshore wealth managers, who are meant to be trusted advisers to the wealthy but also clearly want to do business with sprawling ultra-rich «multishore» families like the Sacklers. With the family's name now tainted, companies that helped manage their money might worry about being associated with helping hide opioid profits.
The Purdue bankruptcy plan means the firm is dissolved, the Sacklers fork over the $4.5 billion and a new company is formed without them. The profits from this firm go mostly toward treating and preventing addiction in cities, counties, and states in the U.S. ravaged by opioids.
Judge Frustrated
The Sacklers hold money offshore – a prosecutor in New York alleged they transferred as much as $1 billion to Swiss accounts. The family has maintained the money flows were «perfectly legal and appropriate in every respect».
Those funds are effectively shielded by the settlement – an outcome that was slammed as «bitter» by the bankruptcy judge. «It is incredibly frustrating that people can send their money offshore…,» Judge Robert Drain said according to a NPR court reporter.
The Sacklers have deep ties to Switzerland: Mortimer Sackler Sr. died in Gstaad in 2010. His son, Mortimer Sackler Jr., and his wife last winter retreated to the resort town as the scandal raged in the U.S.
Corporate Responsibility
The Sacklers are emblematic of how families need to increasingly take corporate responsibility into account. The theme is a huge part of advice-giving by private bankers, particularly in the context of so-called generational wealth transfers.
A prominent example of this is the foundation of the Gulbenkian family, started in 1955 by oil tycoon Calouste Gulbenkian. The foundation sold Partex, the oil firm started by its benefactor, to a Thai petroleum company in 2019.
The foundation is a prominent supporter of the arts and has made art collected by Gulbenkian – one of the most important private collections in the world – accessible to the public at a museum in Lisbon.
Limited Settlement
The Sacklers are also huge art backers but have seen their name stripped off prominent institutions they have donated money to including the Louvre and London’s Serpentine Galleries. London's V&A Museum, where Theresa Sackler was a trustee until 2019, still carries the Sackler name on a courtyard, which features a cafe and an oculus into the Sainsbury gallery below.
In vetting the Purdue bankruptcy, Judge Drain acknowledged the limitations of the settlement – and hit at the heart of the social issue. «I wish the plan had provided more. I will not jeopardize what the plan does provide.»
