Holding the Government Accountable

Big Pharma, Oil Dominate List of Federal Contractors Most Penalized for Misconduct

For the first time since the Project On Government Oversight (POGO) began tracking misconduct by the largest federal contractors, pharmaceutical and oil companies make up the top five highest penalized companies in POGO’s annual update.

Started in 2002 as a way to highlight misconduct among the federal government’s largest contractors, the top of POGO’s list has traditionally been dominated by the defense industry. This year, the list of the 10 contractors that have paid the largest penalties is dominated by pharma or oil services companies. While some of the companies have contracts with the Pentagon, none are what POGO considers “traditional” defense contractors.

Other findings from POGO’s database include:

  • BP alone accounts for more than 37 percent of the penalties paid, most of which stems from government and private legal actions over the 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico.
  • Pharmaceutical manufacturers GlaxoSmithKline, Pfizer, Merck, and Schering-Plough (which merged with Merck in 2009) account for almost 27 percent of the total with a combined $24.6 billion in misconduct penalties in cases alleging unsafe drugs, financial irregularities, and illegal marketing practices.
  • Many contractors in the database have relatively “clean” misconduct histories. POGO has not found any instances of misconduct for 57 contractors. An additional 29 have only one instance.
  • Of the 17 different types of misconduct included in the database, labor and environmental violations are the most common, accounting for a combined 40 percent of the resolved instances.
  • Less than 7 percent of the instances of misconduct are criminal cases.

POGO’s database, which has recently been redesigned and upgraded, now profiles 206 companies, including the recent additions of multinational holding company Berkshire Hathaway; petrochemical giants Compañía Española de Petróleos, S-Oil, and Total; private spaceflight company SpaceX; and health insurer UnitedHealth Group.

Read POGO’s annual update on key trends related to contractor misconduct.

Visit POGO’s Federal Contractor Misconduct Database to access the latest compilation of instances of misconduct and alleged misconduct committed by top federal contractors from 1995 to the present.