Sackler family’s protected billions

Oliver Bullough


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I had a pretty exciting week last week, by the standards of the new normal, in that I made four separate train journeys, spoke at two conferences, and held a series of meetings in person, rather than via zoom. Once upon a time I would have thought that was mundane, but not anymore. I’m still feeling buzzy about it, and I’ve been home for three days.

I also got to read lots of books, thanks to the hours it took those trains to rattle through the green and pleasant suburbs of England. Among them was Empire of Pain, Patrick Radden Keefe’s history of the Sackler dynasty. I’m late to it, but it was interesting to read it in the light of this month’s bankruptcy court ruling on the settlement between the Sacklers and their legal opponents in 3,000 different lawsuits, over their production and marketing of Oxycontin.

Several state attorneys general and one federal government office are planning to appeal the ruling, which they say unfairly benefits the Sacklers, so this saga isn’t over.

  • “They get to retain literally billions of dollars they took out of Purdue Pharma while it was causing addiction and death all across our country and all across the world,” said Maryland Attorney General Brian Frosh, who is one of the legal officials unhappy about the settlement crafted by Judge Robert Drain.

Judge Drain doesn’t come out of Empire of Pain very well, and since his ruling there have been more suggestions that he was too generous to the Purdue Pharma’s owners – the Sackler family – but it’s clear from the comments he made while handing down his ruling that he felt very constrained in how much money he could provide for efforts to help Oxycontin’s victims. 

  • “Judge Drain says this Purdue Pharma bankruptcy plan wasn’t defined by the Sacklers. But he is also acknowledging at length that members of the family placed their wealth (which Drain estimates at $11 billion) offshore where there is ‘a substantial issue of collectability’. So negotiations toward this bankruptcy deal were shaped by financial maneuvers by the Sacklers that made it difficult to sue Purdue Pharma’s owners and collect any damages. Drain says even “fraudulent transfer” claims would be hard to enforce,” live-tweeted NPR’s Brian Mann, who was listening to Drain’s ruling as it was made.

The issue therefore was whether plaintiffs that have been hard hit by the opiate epidemic should reject what Drain is offering and hang on for a better deal or would that be making the perfect the enemy of good. Thanks to a 2019 investigation by the Associated Press, we do have a sense of how the Sacklers have structured their assets. Family members have had business and leisure interests all over the world, including in the U.K. where Mortimer Sackler owned an estate called Rooksnest, and structured their assets via trusts and companies in Bermuda and Jersey, both of which are part of the U.K.’s archipelago of offshore jurisdictions.

But offshore isn’t what it used to be. Once upon a time, buying property in the U.K., and structuring it via some of Britain’s tax havens would keep your secret for you indefinitely, unless you were unlucky enough to employ a lawyer whose records got leaked. These days, you can download a spreadsheet with a list of every single property in England and Wales owned by an overseas company and then, if that company is in Jersey, you can pay two pounds and download its records. Thanks to a law passed in the U.K. parliament three years ago (despite opposition from the then-government), Bermuda, the Cayman Islands and the British Virgin Islands will soon open up their corporate registries too, although the deadline for final implementation keeps getting extended.

As such, despite Judge Drain’s comments about “offshore,” it is notable that the AP’s investigation was much better at tracking down the Sacklers’ assets outside the U.S. than it was at finding what they owned domestically. While European countries have made cautious but steady progress towards revealing the true owners of companies, trusts and foundations, the U.S. has lagged behind.

In fact, not only has the U.S. not opened up, the very opposite has happened: States have competed enthusiastically to offer the assets of the wealthy ever-more generous tax treatment, and ever better protection, something I wrote about a couple of years ago after a trip to South Dakota. In that article, I mentioned a prediction from the South Dakotan administration that assets held in its impenetrable trust structures – probably the most potent forcefield for wealth available anywhere on earth – would hit $355.2 billion by the end of last year, but that was an under-statement. According to the annual report from the Department of Labor and Regulation, the total was in fact even higher – at $367.2 billion, which is more than $420,000 for every South Dakotan. That’s an increase of a fifth on the year before, which means the State had, financially speaking, a VERY good pandemic. 

And if South Dakota did well then so did its clients, because South Dakotan trusts last forever. They keep assets safe from creditors, the IRS, journalistic prurience, and court proceedings like that of Judge Drain.

The U.S. Corporate Transparency Act passed in January this year is certainly a welcome step away from the opacity that has bedeviled ownership of corporate structures in the U.S., which has allowed the rich and powerful to shield their assets from democratic oversight, but it would do nothing to rein in Domestic Asset Protection Trusts like those offered in Sioux Falls. 

Did the Sacklers structure their wealth via U.S.-registered trusts? I have no idea, but it’s telling that I can discover the name of their trustee in Jersey – the Chelsea Trust Company Ltd – within minutes, with just a couple of web searches, but have no idea where I’d start looking for equivalent information in the United States. In short, a U.S. judge blaming “offshore” is a bit lazy, when the problem is every bit as serious at home.

Incidentally, I have remarked before about the ingenuity of U.S. legislators in crafting catchy acronyms for their proposals (2001’s USA PATRIOT act, for example, stood for “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism”), but I don’t think I’ve ever seen anything to match the proposed “Stop shielding Assets from Corporate Known Liability by Eliminating non-debt or Releases Act”, which – by virtue of only counting capitalized words in the acronym – would be the SACKLER Act. Had it been passed in time, then Judge Drain would have been able to cut through the defenses around the family fortune, but it wasn’t, so he couldn’t.

Have you seen a more elaborate acronym? If so, get in touch.


Happy Birthday to Ukraine’s High Anti-Corruption Court, which began its operations two years ago last week. Everyone who knows children knows that two is a great age. They start sleeping better, they have great chat, they can go to the toilet on their own, and they generally start becoming their own people. It appears that, according to this assessment from the Anti-Corruption Action Center in Kyiv, the court is coming into its own as well.

  • “We can confidently say that the launch of the Anti-corruption Court has been quite successful. During this time, judges passed 45 sentences – 39 convictions and 6 acquittals. As of the end of August 2021, 11 decisions were transferred for execution, according to which 14 people were sentenced to imprisonment,” AntAC concluded.

It also provided a list of some of the people that have been tried and convicted, which includes judges, prosecutors, businesspeople and more, and which shows the court is not afraid to tackle influential and powerful Ukrainians, even though its most high-profile cases – those against former members of parliament and the like – have not yet reached their conclusions.

Ukraine’s judicial system has long been noted for serving the interests of the wealthy, rather than the interests of justice, and all is still not perfect, but on balance, this is a pretty good anniversary to mark.

One interesting insight into how the courts are tackling cases that touch on the interests of Ukraine’s wealthiest citizens will be when the Northern Appellate Court finally rules on the contest between Canadian investor TIU and oligarch Igor Kolomoisky. The decision was due for September 6, but has now been delayed to October 4. 

  • “TIU Canada’s story is not unique, but, perhaps, the most vivid of those currently before the courts. A significant international investor feels uncertain about the ability to protect their funds. It appears that tens of millions of dollars in investments, the president’s good intentions, and even his personal word mean very little when foreign business bumps up against the interests of Ukrainian oligarchs—who continue shaping state policy more than any laws and agreements,” noted former prime minister Oleksiy Honcharuk, and Canada’s former ambassador in Kyiv, in a joint column published earlier this year.


Apart from Empire of Pain, I also used some of my train time to read Simon Kuper’s Barca, a fascinating history/exploration of Barcelona Football Club. I’m not much of a football fan, but this is about philosophy and economics and identity, as well as about globalization and localism, all of which combine with Kuper’s excellent prose into a great book. I would highly recommend it. 

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