Also: SVB panic, JPMorgan and Epstein, ex-Goldman banker jail.
Good morning.
Brian Tyler is probably the least well-known CEO running a Fortune 10 company. And I suspect that is partly by design. Given the drubbing McKesson and the other big drug distribution companies — AmerisourceBergen and Cardinal — took for their role in shipping obscene quantities of opioids to the most addicted corners of America, they have reason to lie low.
But Tyler came out yesterday, at the Lake Nona Impact Forum, to speak to Fortune editor-in-chief Alyson Shontell and talk about some of the hallmarks of his four-year tenure. First on the list was moving the company’s headquarters from California to Texas:
“It was a big decision for the company. And the reality is, there is no good time to do it… Standing on stage in front of 400 people I knew were personally thinking about the impact on their families, that was a hard, emotional moment. But you know, you lead through that… We lost about 80% of our California-based workers, but we expected that, so we were prepared.”
Soon after announcing the move, the company was thrown into the COVID crisis. McKesson was chosen by the CDC to play a key role in distributing the COVID vaccine…a role it performed admirably, and which Tyler said gave the company a new sense of mission.
“In a matter of 90 days, we had put up 3.3 million square feet of dedicated facilities, with the wiring, the racking, the training. Some of this was handled at sub-freezing temperatures, and our workers were literally bundled with layers of clothes… Kudos to them. The heroes in Memphis and Louisville that showed up and pulled this off… We had one singular priority. We knew how essential it was. If there was a request or something related to COVID, it went to the top of everybody’s work pile.”
Alyson asked him about the opioid charges, which McKesson paid $7.4 billion to settle. His response:
“We structured that to make sure that the maximum amount of dollars possible — over 85% — went to treatments and programs that will help this country get through this crisis… We wanted to make sure any settlement dollars didn’t get reallocated to fix potholes or build infrastructure.”
But I still thought he stopped short of accepting full responsibility:
“We’re not a bad company. We made mistakes. We were a small part of a system that failed… But make no mistake, it wasn’t a failure of any one party. It was a system failure, in my view.”
Not sure I buy that. As the largest distributor, McKesson was much more than a small player. It had the most comprehensive data, and should have known better than anyone where excess supplies were going. The best way to assure this doesn’t happen again is to be clear about how it could have been stopped before. There’s more than a “system” at fault.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
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SVB panics
Silicon Valley Bank, a major lender in the private market ecosystem, has sparked panic among venture capitalists and entrepreneurs by revealing plans to sell securities and raise billions in a public share sale to offset significant losses on its balance sheet. Following this announcement, the bank's shares plummeted by approximately 60%, raising concerns of a bank run. Venture capitalists are advising their tech clients on where to move their money, with some recommending withdrawing deposits and relocating 6-12 months of cash burn to a more secure location. Despite the bank's claims of being well-capitalized and possessing a high-quality, liquid balance sheet, signs of trouble are emerging, such as clients struggling to log into the bank's website and wire transfers potentially being delayed. Fortune
JPMorgan and Epstein
A U.S. judge has ordered JPMorgan to provide more documents concerning CEO Jamie Dimon to the U.S. Virgin Islands in connection with the territory's lawsuit against the bank for its alleged involvement in Jeffrey Epstein's sex trafficking. Judge Jed Rakoff in Manhattan stated that JPMorgan must provide the requested documents between 2015 and 2019, a period after the bank dropped Epstein as a client. The U.S. Virgin Islands is seeking damages from the bank for allegedly ignoring Epstein's wrongdoing on his private island, Little St. James, while retaining him as a client. Epstein was a client of JPMorgan from 2000 to 2013 before he died in jail while awaiting trial on sex trafficking charges. Reuters
Prison for ex-Goldman banker
Roger Ng, a former Goldman Sachs banker, has been sentenced to 10 years in prison by a U.S. District Court for his role in siphoning $6.5 billion from the Malaysian development fund, 1MDB. The money was used to pay bribes, kickbacks, and for personal enrichment. Although Ng was convicted of money laundering conspiracy and violating anti-bribery laws last April, he continues to deny the charges. Ng's lawyers argued that he should be allowed to return to Malaysia, where he faces a separate prosecution, and that prison time would worsen his mental health. Federal prosecutors had requested a 15-year sentence for Ng. The Associated Press
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