A former senior partner at McKinsey & Company faces 20 years in prison on an obstruction charge related to the consulting firm’s work with opioids manufacturers.
Martin Elling, 60, pleaded guilty on Friday to a one-count Information charging him with knowingly destroying records with the intent to impede, obstruct, and influence the investigation and proper administration of a matter.
The matter in question was the Justice Department investigation of McKinsey that led the company to agree to pay $650 million to resolve criminal and civil investigations into the firm’s consulting work with opioids manufacturers, including Purdue Pharma.
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“Today’s guilty plea moves us forward in holding accountable not only those corporations responsible for the opioid crisis in America, but also the executives that have exasperated the tragedy,” said Zachary T. Lee, the Acting U.S. Attorney for the Western District of Virginia.
“On the heels of a historic $650 million judgment against the world’s largest consulting firm, I am pleased to see that those who knowingly obstructed justice will share in both the culpability and be held accountable for their actions,” Virginia Attorney General Jason Miyares said. “The victims deserve to know the full truth and not a limited and antiseptic version of what happened. Justice deserves transparency and I am thankful to the U.S. Department of Justice and Virginia’s Medicaid Fraud Control Unit for their continued and exemplary work.”
The obstruction
According to court documents, in May 2013, Purdue engaged McKinsey to recover lost OxyContin sales. Purdue retained McKinsey to conduct a rapid assessment of the underlying drivers of OxyContin performance, identify key opportunities to increase near-term OxyContin revenue and develop plans to capture priority opportunities.
This effort was called Evolve to Excellence, or “E2E,” and included McKinsey advising Purdue on how to “turbocharge” the sales pipeline for OxyContin by, among other strategies, intensifying marketing to high value prescribers.
Elling served as the director of the client services team for approximately 30 of McKinsey’s engagements with Purdue. He had a senior, relationship-focused role with respect to the E2E engagement and was involved in securing the engagement for McKinsey.
On July 4, 2018, Elling emailed another senior partner: “Just saw in the FT that [Purdue board member] is being sued by states attorneys general for her role on the [Purdue] Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.”
According to court documents, forensic analysis of Elling’s McKinsey-issued laptop found that Elling in fact deleted materials related to McKinsey’s work for Purdue from the laptop, as well as a Purdue-related folder from his Outlook email account.
On Aug. 22, 2018, Elling emailed himself an apparent to-do list, with the subject line, “When home.” The items listed included: “delete old pur [Purdue Pharma] documents from laptop[.]”
Forensic analysis of Elling’s laptop determined that between approximately April 2018 and September 2018, Elling removed a folder titled “Purdue” (which included a subfolder entitled “Strategy”) that contained more than 100 items for whom the filenames indicate they were from as far back as 2004 and included the name of the Purdue Pharma CEO at the time of the origination of the Purdue Pharma engagements with McKinsey.
The CEO was among the former Purdue Pharma executives who, in 2007, pleaded guilty and was convicted of misbranding in United States District Court in Abingdon.
On Aug. 25, 2018, Elling emailed himself the following: “Remove Pur[due] folder from garbage[.]”
Elling was aware of the investigations into Purdue Pharma’s conduct and knowingly deleted folders, documents, and emails from his McKinsey-issued laptop knowing these documents would be pertinent to those investigations.
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Chris Graham
