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World’s richest doctor gave away millions, then steered the cash to his company
- jedberg 10y agoThe move was ethically challenged and morally bankrupt, but you have to admit it was a pretty clever hack.
- r00fus 10y agoOne wonders whether it's particularly clever - it's the same model that is used by the US when aid programs force the aid recipients to hire US contracting/construction companies. [1] https://www.thenation.com/article/usaid-helping-haiti-recover-or-us-contractors-make-millions/ https://www.thenation.com/article/usaid-helping-haiti-recove...
- smnscu 10y agoSorry if I'm being naive, but isn't that like owning a McDonald's and giving homeless people money as long as they spend it at your restaurant? I don't think it's nearly as bad.
- Qwertious 10y agoSure, except in this analogy McDonalds needs to be 100 times more expensive than local restaurants.
- got2surf 10y agoYou're right, very clever, but morally dubious, especially around something as important as cancer screening. Soon-Shiong would probably argue that he was able to get valuable results for the university while also supporting a cancer detection technology that would be a net-win for the future. Definitely shady, but did the donation still make the world a better place?
- mikeyouse 10y agoClever-ish but almost certainly illegal, the University should be very concerned about maintaining their nonprofit status. Self-dealing like that with no variance power is one of the very bright red lines that (c)(3)s should not cross.
- deckar01 10y agoWhat could they have done differently to make the donation unquestionably legal and morally sound (while still maximizing their personal benefit)? Does the company need to donate the services directly?
- smallgovt 10y agoI think this is the most interesting question in the thread. When viewed as a donation of services instead of cash, he's simply giving his product away for free in order to collect data to improve his product. In its own right, I'd argue that certainly should be considered charity and deserving of praise. The questionable part about this transaction seems to pertain to the tax deductions taken. However, it strikes me as unlikely that the loss on the donation withstanding any reasonable tax deduction would be covered by any personal payback on the donation.
- gnicholas 10y agoThe company could have donated the services, but that wouldn't have had the same impact. The donor got a big tax deduction, which then translated into revenue and data collection for his company. If the company had simply donated the services, it wouldn't have looked like they got a big contract. They also wouldn't have gotten the cash infusion, from the founder and funneled through the university.
- ABCLAW 10y agoI'm not sure why people are praising a kickback that was documented in a set of contracts as clever - The fact that you've read about it means that it was done poorly. All that's left is an illegal and unethical transaction designed to mislead investors.
- x0x0 10y agoYeah, I was wondering who got hurt here -- the University at least got $2m plus what seems to be valid omics data -- when I figured out it was the investors. The money was carefully laundered through Univ of Utah so this seemed like an arms-length contract, rather than self-dealing.
- draw_down 10y agoYes. Lord knows we need more ethically-challenged, morally-bankrupt, clever people in this world.
- ska 10y agoDepending on the industry/area involved, "clever" might better be described as "fairly standard practice". This isn't by any measure a new idea.
- kristopolous 10y agoYou're unlikely to be worth $9 billion through charity and benevolence.
- saimiam 10y agoWhat if you start out at say 50B and donate a 41B away to charity to help address huge challenges facing humanity - call it something hokey like "the giving pledge" - and end up at 9B?
- got2surf 10y agoDefinitely possible, but like the parent poster mentioned, unlikely. Far more people have intentionally built their way to $9B than have intentionally reduced their fortune to $9B.
- chc 10y agoThis is true, but I feel like you're trying to draw an inference here that doesn't really work. You're unlikely to be worth $9 billion through a love of hamburgers, but that doesn't mean somebody worth $9 billion is unlikely to enjoy hamburgers either.
- kristopolous 10y agoI was cynically implying lavishly successful business people are often shrewd, calculating, and clever insomuch as any generous gift is likely also a form of investment
- JohnJamesRambo 10y agoGPS Cancer has to be one of the most frustrating combining of two words I've heard trotted out in a while.
- Pigo 10y agoWhile just knowing about jerk moves like this keeps me awake at night with frustration, he will go on to live a fun and comfortable life most of us only dream about. All the Internet vitriol in cyberspace doesn't equal a slap on the wrist, unless he gets the attention of 4chan I guess.
- TeMPOraL 10y agoMakes me realize that 4chan has been eerily silent over the last years. Wouldn't mind if they rediscovered their social responsibility, for teh lulz.
- alrs 10y ago501(c)3 organizations exist for two reasons: 1. Funnel money to cronies or to support your useless relatives by buying them directorships. 2. Destroy social movements by tangling up the leaders in grant-writing and administrivia. https://www.amazon.com/Revolution-Will-Not-Funded-Non-Profit/dp/0822369001 https://www.amazon.com/Revolution-Will-Not-Funded-Non-Profit...
- mikeyouse 10y agoSo which category does the Bill and Melinda Gates Foundation fall under?
- alrs 10y agoSterilize the poor.
- gaius 10y agoOr the Zuckerbergs?
- vkou 10y agoIt's not yet clear if the Zuckerberg foundation will accomplish meaningful humanitarian goals, or serve as an ingenious device to funnel wealth to his relatives. Melinda and Bill have done pretty well on the humanitarian bit.
- mikeyouse 10y agoTo date the Zuckerberg foundation has given $75 million to SF General Hospital as well as committed to giving $3 billion to establish the Biohub in San Francisco. They've committed to giving 99% of their shares to the Chan-Zuckerberg Initiative which is currently valued at something like $50 billion. Paying the smartest doctors and scientists in the world to cure diseases is a pretty good way to have a humanitarian impact.
- 10y ago
- sand500 10y agoTo save you the click and since it's at the bottom: >The contract with the University of Utah earmarked $2 million from Soon-Shiong’s donation for scientific and administrative work. It says the remaining $10 million of the gift was required to be spent on “Omics Analysis.”
- OliverJones 10y agoI once was on the board of a charity; on my watch we established a policy giving future boards the right to decline contributions for any reason or none, and the duty to decline them if they had too many strings attached. It was a good move; a few years later somebody tried to force human resources policy with a gift, and the board was able to say "no" and point to us, their predecessors.
- hamandcheese 10y agoWouldn't they have been able to say no anyways?
- pc86 10y agoYes but they wouldn't have any political cover other than "we don't want to do that." This allowed them to point backwards in time to say "that prior board won't allow us to accept gifts with ________ condition(s)." Parsing hairs of course, and it's likely 90% of the board or more was the same, but it's enough.
- throwaway729 10y ago> Parsing hairs of course It's always much easier to say: "we already have a policy precedent that doesn't allow this." than to say "we can do anything we want, and we choose not to do this." And there's a substantive difference beyond just perception. With the former, you're ruling in favor of a principled stand regardless of the person/policy behind the particular request at hand. With the latter, you're ruling against a particular person/request.
- mysterypie 10y agoBe careful, because a written policy can cut both ways. It can be used to attack the slightest inconsistency in your decisions. Real life example: A young lady suffered a slip and fall on the freshly waxed floor of a shop. The shop had a written policy against waxing the floors during business hours, but the janitor had done so anyway. The shop's written policy was used as evidence of negligence in court. They would have had a better outcome if they had no policy at all. Once you have the policy, even though you wrote it, you can't declare that you're ignoring the policy or that you're changing it retroactively. Well, you could, but you'd look foolish and lose all credibility.
- mikekij 10y agoBack in early 2016, I was in awe of many of the "Unicorn" startups that were defying all odds to raise money and huge valuations, and earning the praise of the press world-wide. Zenefits, Theranos, Nant Health, Uber... clearly the founders of these companies were made of some entirely different material than I was. Their success was so awe inspiring. Now, it seems as though ~100% of these sorts of companies are up to some shenanigans. It makes me seriously question the validity of any tech company that is lauded by the press.
- dxhdr 10y agohttp://paulgraham.com/founders.html http://paulgraham.com/founders.html "What We Look for in Founders 4. Naughtiness Though the most successful founders are usually good people, they tend to have a piratical gleam in their eye. They're not Goody Two-Shoes type good. Morally, they care about getting the big questions right, but not about observing proprieties. That's why I'd use the word naughty rather than evil. They delight in breaking rules, but not rules that matter."
- IanDrake 10y agoIt's unclear to me what was gained by this? 1- He got a tax deduction: ok, but it's not like that money came back to him tax free somehow. 2- His company got inflated numbers: ok, but not revenue. They only inflated order numbers. 3- Presumably a very small percentage of his donation came back to him in the form of dividends: ok, doesn't seem worth it to me. 4- His reputation may have been enhance: but if the deal was structured as a gift of $10mil worth of free testing wouldn't it having been just as appreciated? I fail to see how he made out like a villain in this. In fact, we used to do this type of thing when I worked at Ben & Jerry's back in the day. Just structured more as donated product, not donated money that must be used to buy product.
- deleted 10y ago[deleted]
- jedberg 10y agoBy inflating his numbers he was able to get funding from investors at better terms. So basically he scammed his investors. The difference between direct donation of services vs money to buy those services is that the direct donation would have actually lowered his order numbers and profitability, while the monetary donation raises those same numbers. Also, by donating the money he gets to invest in his company tax free because the donation is a write off, gets filtered into the company which raises it's value, but he doesn't have to declare any capital gain, which he would have to do if he just put the money into the company (not to mention the tax on the money in the first place). It's all an accounting trick, but it's all about the optics.
- smallgovt 10y agoIs there any proof for this claim: "By inflating his numbers he was able to get funding from investors at better terms" The article does state the inflated numbers were reported to investors, but what makes you think this was material in any way?
- vkou 10y agoWhat makes you think that any numbers reported to investors are material in any way? Why do we even report numbers? This is, after-all, the future, where profitability doesn't matter.
- redsummer 10y agoThis guy Sackler (and his family) have helped kill 100,000 people a year, by pushing Oxycontin onto vulnerable communities. You will never see anything about it in the news. https://en.wikipedia.org/wiki/Raymond_Sackler https://en.wikipedia.org/wiki/Raymond_Sackler http://www.castlemedical.com/blog/full/On-Average-How-Many-People-Die-From-Oxycontin-Abuse.html http://www.castlemedical.com/blog/full/On-Average-How-Many-P... They've managed to worm themselves into the establishment by using their vast murderous wealth to buy into various museums and galleries: http://www.asia.si.edu http://www.asia.si.edu https://www.royalacademy.org.uk/articles/tag/serpentine-sackler-gallery https://www.royalacademy.org.uk/articles/tag/serpentine-sack... https://designmuseum.org/learning-and-research/design-museum-rd/sackler-library-and-archive https://designmuseum.org/learning-and-research/design-museum... http://www.sackler.org/arts http://www.sackler.org/arts (and many others) No surprises that they were heavy Clinton donors.
- Cuuugi 10y agoFind on this page: "Sackler" Phrase not found ? Lay off the drugs.
- seethroughit 10y ago> Purdue Pharma, which is 100% privately owned and operated by the Sackler family (a family worth over $14 billion,including Raymond Sackler) is well known for the very successful research and development and very aggressive marketing of the opiate and extremely addictive drug and narcotic Oxycontin. And that's in an article which also contains fawning phrases such as > Sackler was privileged to enjoy the friendship, advice and guidance of a host of scientific and academic experts Anyway, neither "Sackler" nor "Purdue" show up as words in that article. So? I mean, imagine it did contain that phrase, but didn't outright state "this is a bad thing to do". Then it still would be totally up in the air whether it's a bad thing to do. I'll just note that out of three replies the two purely abusive ones that aren't even intelligent or funny, are the top ones. Herp derp, are you Republican or on drugs, oll? Meanwhile, we at least learned something about ctrl+f, context, priorities, and the Sackler family, and the nature of people who look away. Oh my, someone saw the comment twice, everybody should downvote it. Copy & paste spamming: turn on showdead, look at their comment history, and see just how needy it is to make that connection. I'd say they went through the trouble of digging up some links on a subject they read about in the past, and after posting it here, remembered another discussion about opioids in America, where that comment is also on topic. And that's "copy paste spamming"? That's just being efficient and straightforward, to make this into anything else is where it gets twisted and sickly. All of this is interesting, but not in ways any of you are aware of.
- no_wizard 10y agoI am not defending this doctor. its down right despicable. Unfortunately, the sponsor of STAT news is no better (not questioning their editorial bias per se, but i think its worth point out) Lest not forget, that STAT news is sponsored in part by Janssen, which gave us this lovely piece in highline last year: http://highline.huffingtonpost.com/miracleindustry/americas-most-admired-lawbreaker/ http://highline.huffingtonpost.com/miracleindustry/americas-... Janssen's parent company, Johnson and Johnson, was sued on these accounts and paid out an excess combined over 3 billion to settle lawsuits related to the marketing, selling, distribution, and deception employed to sell risperdal to as many people as possible. http://articles.latimes.com/2012/apr/11/nation/la-na-nn-risperdal-arkansas-20120411 http://articles.latimes.com/2012/apr/11/nation/la-na-nn-risp... http://www.seattletimes.com/seattle-news/ny-ag-janssen-pays-181m-over-drug-marketing/ http://www.seattletimes.com/seattle-news/ny-ag-janssen-pays-...
- deleted 10y ago[deleted]
- taurath 10y agoI was put on that awful drug when I was all of 11 years old. In most countries it's a crime to directly market pharmaceuticals to the public and for damn good reason. Too bad the pharma lobby has both Dems and republicans by the balls.
- praneshp 10y agoSorry for insulting your country, but I think many industries have both Dems and Republicans by the balls.
- taurath 10y agoI'm not going to argue with you there. Most people in the US know who has the power to make policy, and who policies are made for. The only options for fighting it involve rat mazes set up by those with power, and there are only false goals.
- sjg007 10y agoThe winner in the cancer diagnostic space is going to be who can sequence the most cancers vs germlines. At least where cell free DNA is concerned.
- rgejman 10y agoWe already know the major drivers in most tumor types. These are the early mutations that you are going to look for in cell free DNA. Additional cancer-normal pairs are not going to elucidate many new driver mutations. Only careful prospective trials will identify sensitive and specific diagnostics. Those will be the winners (and they will probably be academics).
- shawnee_ 10y agoThe University of Utah deal — laid out in contracts obtained by STAT through a public records request ... Four tax experts who reviewed the contracts at STAT’s request all agreed that the Utah deal was suspicious. Two said it appeared to violate federal tax rules governing certain charitable donations, amounting to indirect self-dealing by Soon-Shiong and his foundations. This story highlights the imperative need for public-benefit institutions (especially those that use taxpayer dollars) to have their tax records be public. The clampdown on FOIA requests (https://news.ycombinator.com/item?id=13586952 https://news.ycombinator.com/item?id=13586952) and the refusal of a certain whitehouse-dweller to make his own dealings public make me think this scheme might be more pervasive that just this instance. Yeah, it's a high-profile doctor who got busted; however, the people who craft these kinds of schemes tend to replicate their successes across many high-profile clients.
- inetknght 10y agoYes, this exactly.
- jgome 10y agoReminds me of Microsoft, USAID and other similar companies/organizations.
- sauronlord 10y agoSo they all benefited. Win-Win. Even the "journalist" writing about it benefited for they had something to write up. Charitable donations are first and foremost tax planning schemes. He used it as intended and all parties agreed to it. (And the government) Is the only issue here that the author is jealous of their business acumen?
- jstewartmobile 10y agoThe n-gate summary of this one is richer than Soon-Shiong: "A reporter catches some rich guy laundering money through a university, but not in time to stop him, or have any other effect. Hackernews spends some time being nonprofit fiduciary experts, until someone reminds us that Beatus Graham publicly espoused the holy virtue of Naughtiness, at which point the wagons are circled and the Doublethink Cavalry defends the pioneers. Meanwhile, the money launderer is being considered for Federal office." http://n-gate.com/ http://n-gate.com/
- GFischer 10y agoHadn't heard of n-gate, pretty funny :)