The Biggest Problem with the Pfizer Allergan Merger for Taxpayers is Eric Holder & Covington LLP
November 23, 2015
UPDATED: November 25, 2015, below original story: Bloomberg: The 6 Law Firms Behind the Pfizer Allergan Merger
Is former US Attorney General Eric Holder, whose salary was once paid by our tax dollars, now at Covington LLP helping Pfizer to avoid paying taxes in the US?
Pfizer paid one of the largest U.S.Department of Justice penalties, $2.2 billion, in U.S. history under the direction of then U.S. Attorney General Eric Holder. This site has often written about the conflict of interest of Eric Holder, who once prosecuted companies like Pfizer, now working for white-collar crime defense attorneys Covington, LLP who defends companies like Pfizer.
This site also correctly predicted in June 2014 that the all but done deal between Allergan and Valeant wasn’t going to happen because it violated antitrust laws. Which brings us to the recent headlines of Allergan (most known for Botox) & Pfizer (most known for Viagra) merging; and, while these products take wrinkles of out skin the SEC better take a closer look and put a wrinkle in this merger.
But Pfizer’s CEO doesn’t want you to see it that way.
“First of all, I would like to say this is a great deal for America,” Pfizer chief executive Ian Read said in an interview with Allergan CEO Brent Saunders and CNBC’s Meg Tirrell, following the announcement on Monday.
“It allows us to continue to sustain an investment of, you know, approximately $9 billion mainly spent in the United States. We have 40,000 combined employees in the United States. So I think it’s a great deal,” he continued.
That may not be how US lawmakers see the deal.
The $155 billion agreement for Pfizer to merge with Allergan outside of avoiding taxes is a double insult to taxpayers, who paid Eric Holder’s salary as Attorney General when he prosecuted Pfizer and now he and his firm are helping Pfizer avoid taxes where Covington LLP will profit at taxpayer expense?
Demand that Eric Holder and his firm Covington LLP are removed and barred from making any money on the Pfizer & Allergan merger.
UPDATED: November 25, 2015
This is the first mainstream article to mention the law firm involved in the merger, and you’ll notice something inconsistent & contradictory, according to Bloomberg:
President Obama has called such mergers “unpatriotic” because they have deprived the United States from billions in tax revenue.
Not surprisingly, Skadden, Arps, Slate Meagher & Flom, the law firm known for pioneering the so-called tax inversion mergers, advised on the Pfizer, Allergan transaction, along with a handful of other law firms.
Skadden, Arps, Slate Meagher & Flom are frequent visitors to this site.
• Wachtell, Lipton, Rosen & Katz
Rank: 2, Market Share: 13.4 percent, Total Deal Value: $685 billion, Average Deal Value: $3.2 billion, Deal Count: 274
• Skadden, Arps, Slate, Meagher & Flom
Rank: 1, Market Share: 17.6 percent, Total Deal Value: $901 billion, Average Deal Value: $5.4 billion, Deal Count: 126
• A&L Goodbody
Rank: 21, Market Share: 3.8 percent, Total Deal Value: $194 billion, Average Deal: $7 billion, Deal Count: 26
• Cleary Gottlieb Steen & Hamilton
Rank: 6, Market Share: 10 percent, Total Deal Value: $512 billion, Average Deal Value: $7.2 billion, Deal Count: 71
• Latham & Watkins
Rank: 4, Market Share: 12.3 percent, Total Deal Value: $632 billion, Average Deal Value: $2.2 billion, Deal Count: 284
• Arthur Cox
Rank: 20, Market Share, 3.9 percent, Total Deal Value: $198 billion, Average Deal Value: $66 billion, Deal Count: 3
Pfizer and Covington clearly worked together in the past and according to Covington’s website and even worked on acquisitions for Pfizer earlier this year. So, either Covington was dropped by Pfizer earlier this year (what no press release?) which would explain Obama’s recent statement of this merger being “unpatriotic” (Obama appointed then Covington’s Eric Holder to the position of U.S. Attorney General and when Holder left (2014) he went back to Covington). Or Covington decided to sit this one out because of the reason stated above, it wouldn’t look good for the former USAG Eric Holder, who was paid by U.S. tax dollars to all of a sudden help Pfizer avoid paying U.S. tax dollars, but they still represent the company. It’s unclear which is usually by design, or a manipulation of the facts without shame, remorse, guilt or accountability at the expense of taxpayers.
I reached out to Bloomberg, but the comment appears to have been erased.