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Johnson & Johnson investigation continues despite announcement of criminal probe

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By the end of the second day of the U.S. Senate Johnson-Crapo investigation into Johnson & Johnson’s response to the popularity of its talc-based consumer products in third-world countries, a handful of reports from the Ugandan government were being examined by committee staff and Senate staff was learning some details of the investigation.

More extensive review will likely start in earnest when committee leaders will announce the appointment of outside investigators — possibly members of outside law firms with experience in anticorruption investigations or cases involving conflicts of interest, the investigative guidelines of the Justice Department, and topics for the Senate investigation itself, aides say.

But a set of newspaper stories in New York Times and the Sacramento Bee, as well as recent story leaks to the tabloids in Africa about the products can at least provide an early indication that the Uganda government is raising questions about the company.

Last week in The Sacramento Bee, an unnamed government official publicly questioned whether J&J had accurately mentioned the false advertising accusations in its advertising campaign. “Many [Johnson & Johnson] representatives have [continuously] said that they are not concerned about criminal liability or even prosecution. Why? Who is they going to pin it on?” said the official in the newspaper report.

Ugandan officials have released no other details about their investigation. The issue of news reports is not a direct new line of inquiry for the Senate committee staff. Investigators are already seeking answers to the theory that the company got much of its financial benefit from the brand new production of medical gloves for the Ugandan medical-glove market. The company also sells its oral-care products in Uganda.

When asked whether the Johnson & Johnson report signaled that the congressional investigation was moving into an area that was not the focus of the first hearing on Thursday, a committee aide said the subcommittee staff is looking at many things to ascertain the facts. “There’s an inquiry into a sales activity that I believe has not been discussed by [committee] leaders in the hearings,” the aide said.

Daryn Miller, a lawyer for J&J, declined to answer questions about the committee’s investigation. In a statement to CNNMoney, an emailed statement from the company said: “The company routinely complies with regulatory requirements and continues to work with local authorities and regulators to investigate allegations of allegations.”

The explosive new investigation comes at an awkward time for J&J. In April 2016, the U.S. Justice Department filed a lawsuit against the company over its marketing practices for its pills that contain talc, asking that the company pay billions of dollars in penalties for what the government claimed to be fraudulent marketing of those products. And in January, the company told the New York Times that a whistleblower had made accusations that the company had sent people to Uganda and other third-world countries to sell the company’s consumer products.

A year ago in November, the family of a Texas woman sued J&J for selling the company’s products to third-world countries and failing to warn the women about the potential cancer risks they faced. The suit, which was settled in November 2017 for $110 million, details the case of Deedra Van Raaphorst, a Texas woman who died in March from ovarian cancer.

After Thursday’s hearing, the Johnson & Johnson product law department plans to brief the company’s internal lawyers, said the company’s chief counsel Daniel A. Skull.

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