Violation Tracker

Banking on Stereotypes

There are about half a million people in the United States with Armenian surnames. Managers at Citigroup apparently decided that all of them are criminals and went to great lengths to deny them credit cards.

That accusation is the basis of a $25 million penalty just imposed on Citi by the Consumer Financial Protection Bureau. The agency alleges that supervisors at the bank ordered employees to discriminate against credit applicants deemed to be of Armenian origin based on the spelling of their family name—especially those living in and around Glendale, California, home to the country’s largest concentration of Armenian-Americans. To hide the blacklisting, applicants were given bogus reasons when their applications were denied.

Individual Armenian-Americans have been involved in organized crime. Earlier this year, a reputed Armenian mafia figure in the Los Angeles area was sentenced to 40 years in prison in connection with a scheme to fraudulently claim more than $1 billion in refundable renewable fuel tax credits.

Yet the existence of mobsters who belong to a particular ethnic group is hardly a justifiable basis for discriminating against everyone who shares that national origin. Citi’s alleged practices constituted a textbook violation of the Equal Credit Opportunity Act.

The CFPB enforcement action is a reminder that not all corporate discriminatory practices involve hiring, pay levels, promotion and other conditions of employment. Companies can also discriminate against customers based on race, gender, national origin, etc. In Violation Tracker we document more than 500 such cases dating back to 2000.

Many of these involve financial institutions accused of unfair treatment of African-American and Latino borrowers. Some of these are holdovers of the longstanding practice of redlining, in which credit is denied to those living in communities with demographic characteristics banks regard as undesirable. Earlier this year, Park National Bank paid $9 million to settle Justice Department allegations it redlined parts of Columbus, Ohio.

There have also been some cases involving other minorities. In 2016 Toyota Motor Credit was fined $21.9 million by CFPB for charging higher interest rates to Asian and Pacific Islander borrowers (as well as African-Americans) on automobile loans.

The cases I found that were closest to Citi matter were actions involving discrimination against Arab-Americans in the wake of 9/11. The most relevant was a 2006 settlement reached by the Massachusetts Attorney General and Bank of America to resolve allegations that Fleet Bank, which BofA acquired in 2004, had improperly closed the accounts of customers with Arabic names, supposedly to guard against the channeling of funds to terrorist groups.

It is ironic to see the likes BofA and Citi portraying themselves as so concerned about potential bad actors that they stereotype entire ethnic groups. If any group deserves to be so stereotyped it is the big banks themselves.

BofA is by far the most penalized company in the United States, with over $87 billion in cumulative fines and settlements since 2000. Citi ranks sixth with nearly $27 billion in penalties. They need to clean up their own houses rather than making assumptions about the behavior of others.

The Missing Crackdown

Joe Biden came to office vowing to get tough on corporate abuses, reversing the soft-on-white-collar-crime approach of his predecessor. Biden went on making those promises, and they were echoed by Attorney General Garland and other Justice Department officials.

That crackdown, however, has not materialized. A new report from Public Citizen shows that the Justice Department concluded only 110 corporate criminal prosecutions in 2022—lower than in any year of the Trump Administration. In fact, it was the smallest number since 1994.

In addition to the decline in overall cases, Public Citizen points out a drop in the number of those cases in which the defendant company received a leniency deal. These are arrangements known as non-prosecution and deferred prosecution agreements in which a firm can avoid a guilty plea by paying a penalty and promising to change its behavior.

Those pledges are frequently broken, and the companies are charged again. Instead of throwing the book at these recidivists, DOJ often offers them a new leniency agreement, making the whole process a farce.

As Public Citizen notes, a decline in leniency agreements would be a good thing if it went along with an increase in the overall volume of prosecutions. Instead of replacing leniency agreements with conventional cases, the DOJ statistics suggest that the agency is simply choosing not to prosecute at all in many instances.

Public Citizen says DOJ may be making greater use of a process called declination, which is essentially a form of super-leniency in which no charges are brought. Some of these deals are made public, but the best corporate defense lawyers can negotiate declinations that are kept secret.

The analysis done by Public Citizen focuses on criminal cases. I decided to check comparable civil cases brought by the Securities and Exchange Commission. According to data collected in Violation Tracker, the SEC collected $1.4 billion in penalties from companies in 2021. This was down from the totals in the final two years of the Trump Administration. In 2022 the SEC’s total jumped to $4.4 billion, thanks in large part to a single case involving a $1 billion settlement with the German insurance company Allianz.

This year the SEC total through mid-October is $1.5 billion. Unless the agency announces some very large cases in the next nine weeks, its 2023 total will also fall behind the final Trump years.

While case and penalty totals do not tell the whole story, what we see in both the criminal and civil areas is something less than a major assault on corporate misconduct. There have been some laudable steps taken by other agencies such as the Federal Trade Commission and the Consumer Financial Protection Bureau, but both of those regulators have faced legal challenges to their enforcement powers. At the same time, the whole system of business regulation is threatened by Republican defunding efforts.

Overall, the Biden Administration has yet to show that it can overcome these obstacles and make good on the promises of a crackdown on rogue corporations.

Whose Advantage?

Progressive Democrats such as Bernie Sanders have long promoted Medicare for All as the solution to the country’s health insurance problems. Given the popularity of Medicare among the seniors it serves, extending the program to other age groups has a great deal of appeal.

The problem, though, is that Medicare is not a single program. It is an assortment of coverage options that can be bewildering to those turning 65 and to participants during the open enrollment period each year when they must decide whether to stick with their current plan or jump to another. The 2024 open enrollment period began on October 15th and ends December 7th.

Seniors are currently being bombarded with coverage offers, not from the federal government, which oversees Medicare, but from the private insurance companies which have gained a significant foothold in a nominally public program.

That involvement may take the form of supplemental coverage for the 20 percent of medical costs Medicare does not cover. Prescription drugs coverage, which was not part of traditional Medicare, was added in 2006 through a system that requires most participants to purchase plans from private insurers.

Most problematic is the coverage designated as Medicare Part C, which is more commonly known as Medicare Advantage (MA). Whereas traditional Medicare operates much like the fee-for-service health insurance many Americans receive through their employer, MA is more akin to a health maintenance organization or HMO. Instead of paying doctors and others for providing service, MA gives plan providers, which are usually commercial insurers, a lump sum for each beneficiary. They are then responsible for managing patient care. Around half of Medicare participants are in MA plans.

MA providers claim that they can offer improved care, including services such as dental and vision which are not included in traditional Medicare. They also depict themselves as the solution to runaway medical costs. To the extent this is true, the MA providers achieve these results through many of the same ruthless practices that gave HMOs and managed care a bad name starting in the 1990s.

That means erecting roadblocks to care by limiting beneficiaries’ choice of providers, requiring prior authorization for many procedures and refusing authorization at a high rate.

It turns out that MA also fails to deliver on the promise of reducing healthcare costs for the Medicare program. A recent report from Physicians for a National Health Program estimates that the way MA’s capitated system is structured causes taxpayers to overpay the plans at least $88 billion per year and perhaps as much as $140 billion.

Along with these technical reasons is old-fashioned fraud. The Justice Department recently announced that Cigna would be paying $172 million to settle allegations that it submitted “inaccurate and untruthful” diagnosis codes to the federal government to inflate risk adjustments and thus boost the MA payments it received.

Cigna is not alone. As shown in Violation Tracker, Sutter Health paid $90 million to resolve allegations of submitting inaccurate information about the health status of its MA beneficiaries in order to get its payments increased. It had previously paid $30 million for similar misconduct.

An analysis last year by the New York Times found that all but one of the top ten MA providers had been accused by the federal government of fraud or overbilling.

When we talk of Medicare for All, we need to be clear that means an extension and ideally an enhancement of traditional Medicare–not the false promise of Medicare Advantage.

Watching the ESG Watchmen

Investment advisors that adopt the label ESG present themselves as arbiters of corporate behavior. They claim to identify which companies are serious about environmental, social and governance goals and thus deserve to be included in high-minded portfolios.

But who watches the watchmen? Who determines when the ESG gatekeepers have gone astray? The answer turns out not to be Ron DeSantis and Republican Attorneys General who have been attacking what they see as wokeness in the business world. Instead, it is the traditional cop on the financial beat—the Securities and Exchange Commission.

The SEC recently brought charges against a subsidiary of Deutsche Bank for misleading investors by exaggerating the extent to which it actually applied ESG principles in its stock recommendations. DWS Investment Management Americas Inc. (DWS), according to the SEC, “failed to adequately implement certain provisions of its global ESG integration policy” and “failed to adopt and implement policies and procedures reasonably designed to ensure that its public statements about the ESG integrated products were accurate.”

DWS, which agreed to settle the charges by paying $25 million in penalties, was also accused of failing to develop an adequate program to make sure its mutual funds were not being used for money laundering. The accusations against DWS essentially came down to deception and negligence.

It is, of course, ironic that a firm whose mission is to monitor the behavior of other companies was found to have serious deficiencies in its own conduct. Yet the real lesson of the DWS case is that the E in ESG does not stand for “ethical.”

This becomes abundantly clear when we look at the track record of many ESG investment advisors as well as the companies that score well in ESG ratings. DWS stands out in this regard. Its parent Deutsche Bank is the ninth most heavily penalized parent company in Violation Tracker with nearly $20 billion in fines and settlements in the United States since 2000.

The bank has, for example, paid out enormous sums in multiple cases involving offenses such as manipulation of interest rate benchmarks, facilitation of fraudulent tax shelters, deception of investors in the sale of what turned out to be toxic securities, and violation of anti-money-laundering laws. The latter included a $425 million settlement with the New York Department of Financial Services of allegations its Moscow, London and New York offices participated in a mirror trading scheme that laundered $10 billion out of Russia.

Despite this record, Deutsche Bank scores pretty high in some ESG rankings. The same combination of heavy regulatory penalties and high ratings can be seen with other investment firms such as Goldman Sachs and Morgan Stanley as well as companies in many other industries. Even fossil fuel culprits such as Chevron and Occidental Petroleum get relatively high ESG scores.

All this is further evidence that the real problem with much of the ESG movement is not that it goes too far, but rather that it is often used as a smokescreen to hide all manner of corporate misconduct by those claiming to promote virtue.

Corporations Are Not Saving the Planet After All

It used to be that you had to go to the websites of groups such as Greenpeace to learn how large corporations are failing to live up to their promises to help solve the climate crisis. Now that fact can be found on the front page of the Wall Street Journal.

The business-friendly newspaper just published an article detailing the ways in which the decarbonization efforts of the world’s largest companies are fizzling out. A big part of the problem is that most companies never developed meaningful climate transition plans and instead relied on dubious carbon offsets instead. The Journal quotes the environmental non-profit CDP as saying that of the nearly 19,000 companies using its disclosure platform, fewer than 100 have credible plans.

Some companies don’t bother to develop any plans—or they keep them to themselves. The Journal cites data showing the percentages of larger publicly traded companies that do not disclose specific plans to meet long-term climate targets. Among those in the coal, oilfield services, and midstream oil sectors the portion is 100 percent. Among integrated oil companies, 93 percent fail to do so.

Big Oil’s detrimental role in dealing with the climate was highlighted in another recent Journal article. It’s well known that Exxon Mobil worked for years to downplay the harmful effects of greenhouse gas emissions. In 2006 the company finally acknowledged those dangers, but the Journal found that within the company the policy did not really change. The newspaper was given access to internal company documents that had been collected by the New York Attorney General but never made public.

These documents, the Journal says, show that Rex Tillerson, who had just taken over as CEO at the time, continued to work behind the scenes to play down the severity of climate change. Exxon executives and scientists were apparently encouraged to go on questioning the mainstream consensus on climate harm.

In other words, it appeared that Exxon, rather than fully abandoning its overt climate denialism, replaced it with a more low-key version while simultaneously reaping the benefits of greenwashing.

Apart from its malignant impact on the climate problem, the fossil fuel industry also continues to be a major source of conventional pollution. We are reminded of this fact by a new report from the Center for American Progress which looks at the long-standing boondoggle surrounding the system by which the industry is allowed to drill on public lands and offshore.

Making extensive use of data from Violation Tracker, the report shows that the top 20 leasing companies are responsible for more than 2,000 environmental violations in their overall operations over the past two decades. Exxon Mobil leads the list with 442 such penalties, while BP has paid out the most—over $30 billion—largely due to its role in the 2010 Deepwater Horizon disaster in the Gulf of Mexico.

CAP’s report recommends that proposed new standards issued by the federal Bureau of Land Management for companies seeking leases be strengthened to include language specifying what defines a bad actor, adding: “Such bad actors should not be eligible for new leases or permits until they have resolved all outstanding issues and demonstrated that they are capable of changing their practices. Further, leases of companies found not to be a qualified or responsible lessee should be subject to cancellation.”

Tougher standards such as these will help to get the message through to the fossil fuel giants that they need to change their ways once and for all.

Corporations and National Security

Most of the cases handled by the Justice Department’s National Security Division involve individuals accused of providing support to foreign terrorist organizations, or more recently, domestic far-right extremists linked to groups such as the Proud Boys.

Yet the division has another mission: prosecuting corporations which violate international economic sanctions or which fail to prevent sensitive technology from being transferred to unfriendly foreign countries. It is beefing up this work, especially the latter part.

The division just appointed its first Chief Counsel for Corporate Enforcement and Deputy Counsel for Corporate Enforcement. In making the announcement, Assistant Attorney General Matthew Olsen suggested that a tougher stance is being taken: “We have watched with concern as investigations of corporate misconduct increasingly reveal violations of laws that protect the United States. Enforcing the laws that deny our adversaries the benefits of America’s innovation economy and protect technologies that will define the future is core to the National Security Division’s mission.” Olsen is in effect saying that some corporations are national security risks—or perhaps more accurately, national economic security risks.

These appointments are consistent with the announcement earlier this year that the National Security Division was joining with the Commerce Department’s Bureau of Industry and Security (BIS) and other agencies to form the Disruptive Technology Task Force. Its mission is “to target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries.”

Until now, the division’s corporate prosecutions have been limited. In Violation Tracker we document 17 cases that have been brought against companies over the past decade. Most of these are foreign-based companies. For example, in in 2017 a penalty of $430 million was imposed on the Chinese telecommunications company ZTE for illegally shipping U.S.-origin technology items to Iran.

BIS, which brings civil rather than criminal actions, has a much bigger caseload. Violation Tracker documents over 600 export control cases brought by the agency since 2000. It has also gone after foreign companies such as ZTE but its case list includes numerous domestic companies, including Boeing, General Electric and Northrop Grumman. Earlier this year, it penalized Seagate Technology LLC $300 million for illegal sales of computer disk drives to China’s Huawei Technologies. (Seagate’s parent is technically incorporated in Ireland for tax reasons, but its operational headquarters are in California and it is effectively an American company.)

A focus on domestic companies is also seen in the caseload of another federal export control agency: the State Department Directorate of Defense Trade Controls. Violation Tracker shows there have been around four dozen cases brought against companies by DDTC since 2000, nearly all of them U.S.-based. RTX Corporation (formerly Raytheon Technologies) and its subsidiaries account for the largest share of the penalties.

Given the willingness of U.S.-based transnationals to share technology with customers in countries such as China over the past few decades, the DOJ’s new focus on economic security may be too late to undo much of the damage. Yet if prosecutors are going to address the problem nonetheless, they should follow the lead of other agencies and go after domestic as well as foreign culprits.

The Other Wage Theft

When we hear references to wage theft, there is a tendency to think of low-paid workers being cheated by fly-by-night employers. That is only part of the story.

Wage and hour violations affecting better-paid white-collar workers are also common, and the employers involved are often household names. Their abuses typically consist of practices such as denying overtime pay to low-level supervisors by erroneously classifying them as managers.

The federal law governing workplace pay practices, the Fair Labor Standards Act, provides exemptions for bona fide executive, administrative and professional employees, who are typically paid a salary. Yet in order for the exemption to apply, the person must be paid above a certain level.

Unfortunately, that threshold has not been adequately updated and is today only $35,000 annually. As a result, many first-line supervisors and similar employees with quite modest salaries end up working many extra hours without additional compensation.

A new proposal from the U.S. Labor Department would alleviate the situation by raising the threshold to about $55,000 a year. Yet this would not completely solve the problem.

Some employers will flout the new standard the way they did with the old one. In fact, the higher threshold will probably tempt even more companies to cheat. Along with the new threshold, the Labor Department needs to put more emphasis on enforcement, especially at larger corporations.

In 2018 I wrote a report called Grand Theft Paycheck that analyzed the prevalence of wage theft in big business by looking both at DOL enforcement actions and private collective action lawsuits brought on behalf of groups of workers. The latter accounted for most of the penalties collected from large corporations.

During the past five years I have continued to document wage theft cases for Violation Tracker, and the trend continues. Here are some of the significant settlements since 2018 involving white-collar and professional workers:

Humana agreed to pay $11 million to settle allegations that it improperly treated nurses as exempt from overtime.

Wells Fargo agreed to pay over $10 million to settle allegations that it failed to pay home mortgage consultants proper commissions and incentive payments.

CVS Health agreed to pay over $10 million to resolve a lawsuit alleging it did not properly compensate pharmacists for time spent on company-mandated training.

Computer Sciences Corporation agreed to pay over $9 million for failing to pay overtime to system administrators.

Pharmaceutical company Baxalta agreed to pay over $4 million for failing to pay overtime to technicians.

Santander Bank agreed to pay over $4 million to settle litigation alleging it did not pay proper overtime compensation to branch operations managers.

Facebook agreed to pay $1.65 million to resolve a lawsuit claiming it improperly classified its client solutions managers as exempt from overtime pay.

All these cases were brought by plaintiffs’ lawyers, who provide an important service (while collecting a portion of the proceeds). It would be preferable, however, to see the Labor Department pursue more of these cases as well as the ones involving small businesses.

Wage theft comes in multiple forms. Regulators should be investigating them all.

Negotiating with Crooks

The pharmaceutical industry is indignant that the Biden Administration is actually moving ahead with plans to implement the provision of the Inflation Reduction Act that allows Medicare to negotiate drug prices. Responding to an announcement of the first ten medications that will be targeted, the trade association PhRMA complained about a “rushed process,” even though the law was passed a year ago and the negotiated prices will not become effective until 2026.

The industry is not just complaining—it is fighting the law in court and doing everything possible to retain its longstanding power to set prices at astronomical levels. The price-gouging is just part of the problem. Drugmakers also have an abysmal compliance record in their dealings with government healthcare programs.

Take the eleven companies which produce the medications included in the first round of negotiations: AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, Johnson & Johnson, Merck, Novartis, Novo Nordisk and Pfizer.

Over the past two decades, these companies and their subsidiaries have been penalized in more than 100 cases brought under the False Claims Act (FCA) or related laws relating to government contracting. As shown in Violation Tracker, they have paid a total of more than $5 billion in fines and settlements for overcharging federal agencies and others forms of fraud.

Six of the companies—AbbVie, AstraZeneca, Johnson & Johnson, Merck, Novartis and Pfizer–have each been involved in ten or more FCA cases, paying out enormous sums in penalties.

Pfizer, for example, has paid $1.15 billion in fines and settlements linked to 16 different FCA cases. The biggest of these was a $784 million payment by Pfizer and its subsidiary Wyeth to resolve allegations that Wyeth knowingly reported to the government false and fraudulent prices on two of its proton pump inhibitor drugs.

Novartis has paid $926 million to resolve a dozen different FCA cases. Among these is a $642 million settlement of allegations that included the payment of illegal kickbacks to doctors to get them to prescribe its products.

Merck has also been involved in a dozen FCA cases, paying total penalties of $796 million. The bulk of the total came from a $650 million settlement of allegations that included both illegal kickbacks and failure to offer Medicaid the same rebates it was offering hospital systems.

Johnson & Johnson’s $556 million FCA penalty total comes from four kickback cases as well as several involving the submission of inflated wholesale prices used in setting the rates for Medicaid reimbursements.

Among AstraZeneca’s FCA cases is a $354 million settlement of civil and criminal charges that the company provided large quantities of free samples of a prostate cancer drug to urologists, knowing that many of them were giving the medication to patients as free samples and then billing Medicare and Medicaid.

Seventeen of the 21 FCA cases involving AbbVie and its subsidiaries concerned allegations of falsified drug price reporting to federal and state agencies.

What all this shows is that when federal negotiators sit down at the bargaining table, they will be facing a group of companies that for years have not only been charging high prices but have allegedly also used a variety of illegal means to extract even more revenue from taxpayer-financed healthcare programs.

Rather than expressing indignation, Big Pharma should be displaying penitence for its fleecing of the public for so long.

Targeting the Price Fixers

The Justice Department and the Federal Trade Commission have been promoting the adoption of new guidelines that would give them a greater ability to block anti-competitive mergers. Now DOJ may also be taking a tougher stance with regard to the other main branch of antitrust enforcement: prosecuting price-fixing conspiracies that harm consumers.

DOJ’s Antitrust Division has just announced the resolution of a case brought against generic drug giant Teva Pharmaceuticals and a smaller Indian producer called Glenmark Pharmaceuticals for conspiring to fix the price of pravastatin, a cholesterol medication. Teva was also charged with anti-competitive behavior with regard to two other drugs. Teva was compelled to pay a criminal penalty of $225 million and to donate drugs worth $50 million to humanitarian organizations. Glenmark was penalized $30 million.

Along with the fines, which in Teva’s case is well above the norm in DOJ Antitrust Division actions, the agency imposed a novel penalty: requiring the two companies to divest their pravastatin business line. And although the criminal charges were softened by allowing Teva and Glenmark to enter into deferred prosecution agreements, the DOJ included a blunt warning that “both companies will face prosecution if they violate the terms of the agreements, and if convicted, would likely face mandatory debarment from federal health care programs.”

Forcing a company to leave a business in which it has engaged in misconduct can be a more effective punishment than monetary penalties, which large corporations can usually absorb with little difficulty. This is an especially appropriate approach in prosecuting companies that have shown themselves to be repeat offenders.

Among the more than 240 companies shown in Violation Tracker to have faced criminal charges brought by the Antitrust Division since 2000, there are about half a dozen which have been penalized more than once. One of those is the Swiss bank UBS, which in 2011 paid $160 million to resolve allegations of engaging in anti-competitive practices in the municipal bond market but was offered a non-prosecution agreement. The following year, UBS was accused of manipulating the LIBOR interest rate benchmark and paid penalties totaling $500 million. While a subsidiary had to plead guilty, the parent company was offered another non-prosecution agreement.

Antitrust enforcers should leave the use of financial penalties to private litigation. As I showed in a report called Conspiring Against Competition published earlier this year, class action lawsuits brought by the victims of price fixing have yielded $55 billion since 2000, more than twice as much as the penalties collected by federal regulators.

Among the most frequently sued companies were Teva and its subsidiaries, which paid out a total of $1.4 billion in 19 different class actions. Most of these involved an indirect form of price fixing in which companies collude to delay the introduction of lower-cost generic alternatives to expensive brand-name drugs.

Government regulators should use their power not just to put a dent in an egregious price-fixer’s bottom line but to force the company out of a market in which it failed to follow the rules.

The Donald Trumps of the Corporate World

There is a word, recidivists, for those who repeatedly commit crimes. But there is no term, as far as I know, for those who commit the greatest variety of offenses.

If we are talking about public figures, the term should probably be Trumpist—given that the former president has racked up an unprecedented assortment of legal entanglements that continue to grow. But what about corporations? Which companies have engaged in the widest range of misconduct?

To answer this question, I drilled down into the data collected in Violation Tracker. The database tags each of its more than 500,000 entries with one of eight broad offense groups: competition-related offenses; consumer-protection-related offenses; employment-related offenses; environment-related offenses; financial offenses; government-contracting-related offenses; healthcare-related offenses; and safety-related offenses. These, in turn, are divided into a total of nearly 100 more specific offense types.

I set out to discover whether any of the more than 3,000 parent companies for which we aggregate data are linked to cases in every one of the eight offense groups. It turns out that 13 parents meet that criterion, but if we look only at those with substantial penalties—over $1 million—in each category, the list narrows down to five corporations. These include one freight giant (United Parcel Service), two major pharmacy chains (CVS Health and Walgreens Boots Alliance) and two large drugmakers (Bristol-Myers Squibb and Merck).

Among the wide-ranging rap sheets of these five companies, the one that stands out is that linked to Merck. It has the largest cumulative penalty total dating back to 2000: more than $10 billion. That includes ten-figure totals in three offense groups: financial, healthcare-related and safety-related.

Merck has achieved its position as the Donald Trump of the business world as a result of 86 entries in Violation Tracker. Chief among its safety-related cases is the $4.9 billion it paid to settle multi-district litigation brought by thousands of plaintiffs claiming the company’s heavily promoted anti-inflammatory drug Vioxx caused injury or death. The Vioxx scandal was also at the center of the company’s biggest penalty in the healthcare-related category, a $950 million settlement of civil and criminal charges brought by the U.S. Justice Department, as well as several consumer protection cases.

As for financial offenses, Merck had to pay over $2 billion to settle tax issues brought by the Internal Revenue Service. Merck’s government-contracting-related cases include a $650 million False Claims Act case involving improper kickbacks to healthcare providers to get them to prescribe its medications.

Merck’s competition-related penalties include a $60 million settlement by its subsidiary Schering-Plough of allegations it improperly blocked the introduction of a lower-cost alternative to one of its products. In the environmental area, Merck has paid over $33 million in penalties in nearly three dozen federal and state enforcement actions.

Finally, Merck’s record of employment-related offenses includes eleven cases dealing with retirement plan administration, gender discrimination and violation of the Family and Medical Leave Act.

One thing that can be said in Merck’s defense is that few of its penalties are from the past few years, indicating that it may be trying to improve its compliance. It’s a different story with CVS and Walgreens. Since the beginning of 2020, Walgreens has paid penalties more than two dozen times, while CVS has done so in 69 cases. Both are involved in pending multistate lawsuits relating to their role in the opioid crisis, so their penalty totals are likely to go on growing.

Companies that have paid multiple penalties in multiple categories exemplify misconduct that is not compartmentalized but instead can be found throughout a firm’s operations. Regulators and prosecutors need to do more to get these corporations to clean up their act across the board.