Chapter 2, Part 2: Falling down the rabbit hole
Chapter 2, Part 2 of my serialized memoir, SMIRK, about my relationship with "Pharma Bro" Martin Shkreli.
Martin Shkreli was always eager to talk, even when it wasn’t in his best interest. That was clear from the very first conversation I had with him. Sparks flew during that chat, in a sense, although not really in a heartwarming way.
It was January 2015. He was still a virtual unknown outside of hedge fund, trader and biotech circles. I’d poked around a bit more into my tip that the feds were looking into him for fraud. Despite my editors’ blasé attitude about the story, I felt confident I could report he was “under criminal investigation.”
Before publishing, I did what was ethically required and reached out to him for comment. I hadn’t anticipated that he, and not a lawyer or some crisis PR representative, would call me back.
“Hi, this is Martin Shkreli,” he announced when I answered my cell phone. He paused for effect.
He was sorry to tell me that I had “no story.” Yes, there was trouble at his first pharmaceutical company, Retrophin, but that was old news. He had already moved on — after being ousted as CEO by the Retrophin board — and had started a new drug company, Turing.
He asked me who told me about the criminal probe; I refused to answer.
“Oh,” he hissed. “I bet I know.”
He had many enemies, and I would be a fool to trust any of them, he assured me. I told him politely but firmly that I was sure the information was correct, and I would be running the story. I wrote down his infuriated reaction, and added it to my piece.
When the story was published minutes later, colleagues alerted me to Martin’s tweet about it. It was, by his standards, surprisingly mild: He said that I “confused a situation that was no longer relevant.”
I didn’t hear from him again until almost exactly a year later, after his arrest.
What I didn’t realize then was that he did take my reporting seriously…eventually. He later told me that first he childishly complained about me to his employees, and sneered about how a Bloomberg nobody, a woman, so cavalierly rejected his assertions and published these damning claims about him.
“Well, is she cute?” one coworker apparently asked.
He looked up my profile picture on Twitter — an amateur-looking selfie.
“Yeeeaaaaah,” he apparently grumbled.
And then, just days after I published that piece, he did something wildly unwise for anyone who might possibly be the target of a criminal probe: He trekked down to the U.S. Attorney’s Office in Brooklyn with copies of my story in hand and demanded to “get to the bottom of it.”
For multiple hours and without a lawyer to protect him from himself, he talked to two assistant U.S. attorneys, two FBI agents and a paralegal. FBI records reflect that he attempted to convey his side of the story — or really his side of every possible story. He didn’t seem to know which of his many messy or controversial business moves might be considered a crime, so he rambled on about them all.
The FBI record, called a “302,” captured his long-winded monologue, including how the investors in the MSMB hedge funds, from 2009, came to own stock in his first pharmaceutical company, Retrophin. These transactions ultimately formed the basis of the charges against him. (A fuller description of the 302, with most of the original text, will be available to paying subscribers in the next post.)
He also touched on his disagreements with Retrophin’s board and being ousted from the company in September 2014: The board “wanted Shkreli to stop tweeting online and he refused,” was the explanation Martin offered to the FBI.
While the FBI notes of the conversation indicate Martin was full of chest-thumping confidence, Martin later confessed to me that he left that day feeling uneasy. The prosecutors and the agents did not give an impression that they were actually weighing what he said with an idea that he might be innocent. He said it was more like they had already made up their minds, and the information he provided only served to flesh out their case.
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He realized, he told me, that my reporting was probably accurate, and with that thought came a tingle of respect.
A month after I broke the story of Martin’s arrest in December 2015, unleashing a giant wave of schadenfreude throughout the internet, he called me again. I was away from my desk and he left a voicemail. When I called back, I braced myself, assuming I was about to endure a confrontation.
But when he answered, his tone was warm. He assured me he wasn’t mad about anything.
“It’s been about a year since we last talked, hasn’t it?” he said. “I should have listened to you.”
“That’s what I tell people,” I muttered.
Words poured out of him. He had “no intention” of pleading guilty. He wasn’t guilty, he said. He was doing his own legal research. He had already studied “50 to 60” securities fraud cases. He’d read thousands of pages of legal documents. He was making charts and graphs for his attorneys.
The investigation was “vague,” he insisted. “Fraud, are you f—-ing crazy?” he asked rhetorically. “The government doesn’t want to believe I created a successful company. I’m being victimized unfairly. It’s a political thing.”
Finally, he drifted toward the reason he had called me.
“I would love for someone to do an in-depth legal analysis,” he said, explaining that other reporters just wanted to do a profile of the world’s most hated man. “My dream headline is ‘Martin Shkreli is a jerk, but he’s innocent.’”
“Huh, I’m not sure,” I replied, knowing my editors would never approve that headline. “But maybe we could try to do something along those lines.” I asked if he would meet with me to talk through the possibilities.
Sure, he said. I could come to his office at Turing.
Our meeting was at one in the afternoon; his office was in a building near Times Square, where a blank-faced receptionist showed me to a conference room.
Then Martin was suddenly walking toward me, dressed in a black hoodie and jeans. His dark hair was greasy and uncombed, but he was smiling. He sat across from me, pulled a wireless keyboard toward him and began creating a spreadsheet, displayed on a flat-panel monitor on a wall.
He told me that he wished the prosecutors had let him explain himself this way, because they wouldn’t let him show them his spreadsheets.
I suggested we start with an on-the-record interview and I made a move for my recorder, but he stopped me: He would tell me everything now, off the record, but we could schedule a second on-the-record sit-down with his lawyers present. He would not make himself sound less interesting, he promised. (We’ve since agreed to dispense with all of these previous “on the record,” “off the record” parameters.)
“My lawyers don’t tell me what to say,” he added.
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He began speaking again in a hurricane of words and he nodded when I asked if I could take notes. My hand soon cramped from writing so quickly.
He had been pretty down on his luck while starting his companies, he said, and had been practically homeless for a while, sleeping mostly in his office or on his sister’s floor in Queens. Looking at his unwashed hair, I thought that part of the story didn’t seem at all hard to believe.
On the spreadsheet, with self-confidence that left me open-mouthed, he drafted a chronology of each investor’s share in his companies from memory. At times, he stood up and paced, petted his hair, or stretched by contorting his arms behind his back. He seemed like someone with autism or manic depression, or possibly both.
“You can’t win on fraud if you don’t have a victim,” he said. “All you’ll find around me are people who made money.”
He fixated on other executives at Retrophin: The then-CEO, Steve Aselage, had it out for him, and that was surely how the feds got interested in his case, Martin told me. Then his ire landed on the prosecutors. The indictment “painted me as some kind of financial shyster,” he complained, scowling.
Then he abruptly skipped ahead, pulling up a list of recent white-collar fraud defendants and how much time they had gotten in prison. It wouldn’t be that bad for him even if he was convicted, he mused; he might get a couple of years at most.
(Of course, the factor he was not considering was that all of these other defendants hadn’t talked publicly during their cases, while he apparently could never quite stop talking to reporters or posting on social media. The Miranda warning does exist for a reason: Whatever you say will be used against you.)
Finally, he turned to the last part of his presentation: how Turing planned to improve Daraprim. The drug, a first-line treatment for the infection toxoplasmosis, was an old drug, and it harmed both the host and the disease-causing parasite, he explained. With some of the money Turing made from raising the price of the drug, which he claimed was entirely covered by patients’ insurance, he could make the drug better.
Looking at my notebook later, I realized I had his entire defense, complete with theories, references to pieces of evidence, and likely witnesses.
But when I called to schedule the on-the-record interview, he always had a reason to keep talking… and to keep staying off the record.
The first time I asked him again about doing a “real” interview, he replied that he was busy, and that a lot of things were coming up, but he assured me he would schedule it “soon.”
“It was nice talking to you the other day,” he told me. “It really helped me straight out my thoughts.”
When he fired his legal team later that month, I wrote the story, and called him for comment.
“Christie, I like you, but I have enough of my own problems to worry about now,” he said.
“I know you do,” I replied. “That’s why I’m checking in, to see what is happening.”
In a flash, his voice changed, and he sounded like a child presenting a show-and-tell project. “Do you want to know who I’m thinking of hiring?”
I did. But I winced. It was not my place to give him advice about his choice of lawyers, I told him. I was in no way qualified. He went on anyway, rattling off famous names, including some I’d written about in my stories. He paused for my reaction to each.
But he still refused to go on the record.
In February, he — or, at least, the “Pharma Bro” of public imagination — was subpoenaed to testify before Congress. After all, lawmakers want to look like heroes to their constituents, and what better way was there to do that than by dragging a villain into the Capitol and tearing into him on live television?
Both Martin’s old and new lawyers strenuously advised him against testifying because of how it might complicate the ongoing criminal case. The committee members were aware he would likely plead the Fifth Amendment and decline to answer questions if he was made to appear. Apparently, this was all the better, in their view, as they’d have more camera time to opine.
On the phone, when I asked Martin about the hearing, his voice sounded loose and uncontrolled. He didn’t want to go to Washington to be a “punching bag for a bunch of politicians,” he said.
One of the Bloomberg legal editors had been insisting from the start that he would “blow up” from the pressure, meaning either skip town or commit suicide.
I knew, at least logically, that such a dire outcome would not be my fault. But I could not handle the thought of that stain on my conscience. It started to feel uncomfortably possible.
He was subpoenaed, and had to show up to the hearing or else face charges of contempt. As his lawyers had advised him, and told the committee, he pled the Fifth to avoid answering under oath, which he had been warned was an impossible minefield for anyone under criminal scrutiny. (He later used Twitter to call the committee members “imbeciles”). The committee members, however, got their hits in.
All the while, I struggled to reconcile what seemed like two completely different Martins: the one in media coverage and the person I had met. As presented in the press, he was like Hannibal Lecter somehow crossed with a cockroach. But in person he was something entirely different — a quirky nerd, antagonistic, insecure, brimming with bravado and imposter syndrome, and with an extremely poor sense of optics, on which the mainstream media relies.
“When people show you who they are, believe them the first time,” Maya Angelou famously said. The first time he showed me who he was, he was nothing like a corporate Hannibal the Cannibal. What was I supposed to believe?
I looked back at the BusinessWeek profile about Martin. The impression the writer seemingly had, back in 2014, before he’d become the subject of an international firestorm, largely squared with my own. Martin, in that piece, seemed awkward, neurotic, smart and possibly “flaky,” based on the profile. But he didn’t sound remotely evil — or like he was hiding any horrible skeletons. The article, surprisingly, was overall vaguely positive.
I spoke with the writer to try to get a handle on what I was dealing with, and quizzed him about his interactions with Martin.
Did he trust the brash young executive, I asked. The writer, a man more than two decades my elder, replied “yes,” without hesitation.
Feeling like my instincts were confirmed, I kept going. My goal was to write the “real” story about Martin Shkreli, something that cut through the existing media noise and bridged the divide between how people perceived him and whatever he really was.
I wasn’t sure how I was going to accomplish that, but I wanted to give it a shot.
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