Shkreli lawyer blames irreverence on youth
Martin Shkreli punked out.
The pharma bad boy Shkreli, as promised, refused to testify Thursday before a congressional committee investigating drug price hikes.
Appearing under subpoena, he cited his Fifth Amendment right against self-incrimination over and over again as members sought to ask the normally verbose 32-year-old former CEO about his company's dramatic increase of the price of its medication by more than 5,500 percent.
Shkreli, who faces pending criminal securities fraud charges, smirked, twiddled a pencil and looked away as Rep. Elijah Cummings, D-Md., said, "I want to plead with you to use any remaining influence you have with your former company," Turing Pharmaceuticals, "to lower the price" of Daraprim. The company raised the price last year to $750 per pill from just $13.50.
"I know you're smiling, but I'm very serious, sir," Cummings said. "You could go down in history as the poster boy for greedy pharmaceutical executives, or you could change the system. ... I truly believe you can be a tremendous force for good."
Soon after Shkreli was excused from the hearing because of his refusal to answer questions, Rep. John Mica, R-Fla., fumed: "I don't think I've ever seen the committee treated with such contempt." He asked committee chairman Rep. Jason Chaffetz if he would hold Shkreli in contempt of Congress. Chaffetz, R-Utah, indicated he would not do that.
Shkreli's criminal defense lawyer, Benjamin Brafman, told reporters that "Mr. Shkreli did not intend to show any disrespect." Brafman said his client's fidgeting and facial mugging "was nervous energy."
Speaking with CNBC's "Closing Bell" Thursday afternoon, Brafman said he didn't think his client violated the law. "I think he's done nothing wrong, and I think he needs guidance, and I think he needs counsel," he said.
Brafman, who earlier called the hearing "a hostile forum," said Shkreli is "a brilliant scientist" dedicated to saving lives.
"Mr. Shkreli is not a villain, he's not a bad boy, at the end of the story, he's a hero," said Brafman, whose client was only allowed by a federal judge to travel outside of New York for the purpose of attending the congressional hearing.
But after the hearing, Shkreli tweeted: "Hard to accept that these imbeciles represent the people in our government." He then kept up a steady pace of retweeting messages supporting him.
In an email statement several hours later, Brafman wrote, "Although Mr. Shkreli followed my advice about making no statements at the hearing, it was very frustrating for him to listen to what he believed to be patently false statements about Turing that he could not respond to because of the pending criminal charges. He meant no disrespect but in truth, statements made by some of the members of the committee were wrong, unfair and difficult to listen to without responding."
"He's young, he's inexperienced, he's never been in this position before and it's a regrettable choice of words," Brafman said to CNBC about his client's tweet.
"It's sort of a childlike behavior. We gave him every opportunity to cite his side of the story; he chose not to do that," Chaffetz told CNBC's " Power Lunch. " "That's disappointing, but you would expect more from a human being."
Chaffetz also responded to Brafman's portraying Shkreli as a hero during the interview on Thursday. "If he pays his bills, I'm sure he would call him a hero because I'm sure it's not cheap," he chuckled.
Shkreli's Fifth Amendment invocations reflected a federal criminal indictment against him in New York that accuses him of ripping off one of his former pharma companies to pay off hedge fund investors he likewise is suspected of defrauding. His reticence to talk is in sharp contrast to his history of spouting off glibly to reporters, even after he was criminally charged.
But it also came a day after newly appointed Brafman said he had told Shkreli to stop talking with the media or find another lawyer. Also on Wednesday, it was revealed that Shkreli's E-Trade account, which had contained $45 million worth of stock when it was used to secure his $5 million criminal release bond last month, has lost about $41 million in share value due to the drastic plunge in stock price of a company he briefly ran just before being indicted in December, KaloBios Pharmaceuticals (KBIOQ).
"On the advice of counsel, I invoke my Fifth Amendment privilege against self-incrimination, and decline to answer that question," Shkreli said when Chaffetz asked what he would say to a single, pregnant woman who might have AIDS and needed Darapim.
"Do you think you've done anything wrong?" asked Chaffetz, chairman of the House Oversight and Government Affairs Committee.
Shkreli gave the same answer.
Shkreli also gave that response over and over again when Chaffetz and another congressman tried, without success, to get him to answer a substantive question.
One break in Shkreli's wall came when Rep. Trey Gowdy, R-S.C., asked Shkreli if he was pronouncing his last name correctly.
"Yes," Shkreli replied.
"See!" Gowdy pounced. "You can answer some questions, and that didn't incriminate you."
Gowdy noted that the committee didn't want to ask Shkreli questions about the charges related to his former company Retrophin, but about the pricing of Turing Pharmaceutical's Daraprim. He said none of those questions would incriminate him, and that he didn't believe the Fifth Amendment privilege would apply.
But Shkreli continued to refused to answer, saying with an edge, "I intend to follow the advice of my counsel and not yours," as he smirked and as Brafman sat behind him in the hearing room. Brafman at times stood, leaned over and whispered into Shkreli's ear as the congressmen tried to question him.
Gowdy continued, however, tweaking Shkreli by saying, "We can even talk about the purchase of Wu-Tang Clan, is that what it's called ... is that the name of the group?" a reference to Shkreli's purchase for $2 million of a one-of-a-kind album by the hip-hop group.
Shkreli repeated that he would not answer even that question under the advice of his lawyer.
"I am stunned that a conversation about an album he purchased somehow would subject him to incrimination," Gowdy said.
When Gowdy persisted, Shkreli's lawyer stood up and asked Chaffetz to recognize him so he could speak.
"No, you are not recognized ... and you will be seated," Chaffetz snapped.
Shkreli was excused by Chaffetz once it became clear — and Shkreli verbally confirmed — he would not answer questions.
Outside of the hearing room, Brafman addressed a swarm of journalists.
"Mr. Shkreli would like nothing more to answer the committee's questions, and I think he would have very good answers," Brafman said. But the lawyer said Shkreli also had been correct to follow his advice and not give those answers because of the pending criminal charges.
"But not for the pending indictment ... Mr. Shkreli would address this issue."
Brafman also said, "It's a frustrating morning, because many of the things that were said in the hearing were just not accurate."
The lawyer said Gowdy "had no idea what he was talking about" when he said there was no risk of Shkreli answering questions ostensibly unrelated to the criminal case while facing charges.
Shkreli sparked outrage last year among patients, medical societies and Democratic presidential front runner Hillary Clinton after Turing raised the price of 62-year-old Daraprim to $750 a pill .
The medicine, used to treat a parasitic infection, once had sold for $1 a pill.
In December, Shkreli was arrested and charged with running his investment funds and companies in a manner that prosecutors compared to a Ponzi scheme. He has pleaded not guilty, but stepped down from running Turing Pharmaceuticals and was fired from KaloBios after he was charged. He is also a former head of Retrophin, which sued him, alleging mismanagement.
Correction: An earlier version misspelled Shkreli in two references.
—CNBC's Denise Garcia contributed to this report.
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