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Morning news brief

RACHEL MARTIN, HOST:

A Facebook whistleblower takes her story to Congress today.

STEVE INSKEEP, HOST:

Former Facebook employee Frances Haugen says the company prioritized profit over safety. She left the company with documents, like a study of how staring at Instagram affects the body image of some girls, and memos about the company's approach to political misinformation. Facebook is pushing back. Company Vice President Monika Bickert told NPR that the documents do not tell the full story of the company's efforts.

MONIKA BICKERT: The documents that were taken by this employee and the way that they're being portrayed - it just is not an accurate representation of the work that this company does every day to ensure safety on our sites.

MARTIN: We're going to get into this with Wall Street Journal reporter Jeff Horwitz. He's been covering all this very closely. Also, a note - Facebook is an NPR sponsor, but we cover them like any other company. Jeff, good morning.

JEFF HORWITZ: Good morning.

MARTIN: All right, so this hearing that Haugen is testifying at today is called Protecting Kids Online. So this is the focus. What did the internal documents show about how teens are using Facebook and Instagram?

HORWITZ: So there were quite a few of those documents, and what those documents showed is that Facebook's own internal research was very clear that Instagram was potentially disastrously bad for the mental health of vulnerable teenage users, in particular teenage girls. And so on body image in particular for girls, the company found that its own product was actually worse than other social media. It was - tended to send people in a very bad direction.

MARTIN: And this was from - the company itself came to this conclusion. And then what did they do with that research?

HORWITZ: Well, they didn't do much with it publicly. They said that their product had only small effects and that the research was very unclear, even though internally, they were kind of singing a very different tune. And they tried to hide likes. That was something - this was a good-faith effort to try to reduce the social pressure people felt.

MARTIN: Explain that just with one more beat, Jeff - hide the likes.

HORWITZ: Yeah, exactly. So on Instagram, users post photos of themself with text. And, you know, you can kind of measure popularity by how many likes each post gets. And so the idea is that - the hope was, at least, that if they took away some signifier of popularity, that perhaps that would destress the whole experience. It didn't work. And so I think the place where the company has found itself in is that it actually doesn't have any solutions other than significantly restricting some core features of the product. And, obviously, it doesn't like that prospect much at all.

MARTIN: How else is the company defending itself from allegations of exacerbating social divisions, like using these algorithms that exploit and make worse these divides in our culture?

HORWITZ: The company isn't directly denying the mechanics that we've described in the journal and that Ms. Haugen has - is describing in her testimony. I think, you know, the interesting thing about that quote you read at the beginning is that - from Monika Bickert - is that it says it misrepresents the work, not - that they're doing, not necessarily that it misrepresents the findings of Facebook's own research.

MARTIN: We've seen Facebook, you know, have to navigate big controversies like this before. Is this different?

HORWITZ: I think something that is pretty remarkable about Ms. Haugen is that she did as thorough of a job documenting what's inside the company. And so, you know, while there have been many controversies around Facebook - whether it's, you know, perhaps good for mental health, whether it makes people angry - this is someone who has brought forth Facebook's own understanding of itself, and it's pretty grim.

MARTIN: Jeff Horwitz with The Wall Street Journal. Thank you.

HORWITZ: Thank you.

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MARTIN: All right, we're now going to dive a little deeper into another trove of leaked documents. This time, though, we're talking about financial records called the Pandora Papers.

INSKEEP: The nearly 12 million documents were reviewed by multiple news organizations. They showed how the rich and powerful hide their wealth in tax shelters and offshore accounts. And for the global elites of some countries, the offshore tax haven is the United States. More than a dozen U.S. states are hospitable to them, including South Dakota.

MARTIN: Which is where we find reporter Lee Strubinger. He is South Dakota Public Broadcasting's politics and public policy reporter in Rapid City. Thanks for being here, Lee.

LEE STRUBINGER, BYLINE: Yeah, you bet.

MARTIN: All right, so in the movies, the bad guys are always hiding their money in secret bank accounts in Switzerland or places like the Cayman Islands. Now we can add South Dakota to this list? Tell us more.

STRUBINGER: Yeah, so the - I guess the important thing to emphasize is that this is something that's been going on here for quite some time. There were major steps taken in both the '80s and '90s that established the state as a place that's very friendly to banking and the trust industry, which has really only grown since then. First, South Dakota became one of the states to remove the rule against perpetuities, which means here, people in estates can control their assets long after they've died. Then in the '90s, Governor Bill Janklow established a task force to make trust law more favorable to attract money to the state. And that task force still meets to this day and is made up of members from the trust industry, including estate lawyers and bankers, et cetera.

MARTIN: So this task force is still operating today. What kind of say do state lawmakers have in it?

STRUBINGER: Yeah, so every year, the state legislature votes on a kind of maintenance bill. It's really focused to make sure that South Dakota is a state that's favorable for wealthy people to keep their money in. However, these bills are long and complex and often involve amending current state law, which is also complex to understand. Because South Dakota has, essentially, a part-time citizen legislature, it relies on experts like those in the trust fund task force to help them with these complex topics. Sometimes, even members of the committee, when these bills come up, say they don't entirely understand what they're voting on. Here's Sioux Falls State Representative Republican Doug Barthel earlier this year.

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DOUG BARTHEL: Well, I wish I understood all of this like a lot of our experts do, but I don't. But this is the fourth year in a row that I've dealt with this. And I was told on year one by former Representative Lust that - he said, trust me on the trusts.

STRUBINGER: This bill that Barthel is talking about - it sailed through the legislature and was signed by the governor with little to no question.

MARTIN: Trust me on the trusts. OK, so what has the reaction been in the state since the Pandora Papers were released?

STRUBINGER: It's been mixed. You know, critics of the state's trust industry say lawyers on the task force really have their message down, and lawmakers don't question the details. I spoke with former Democratic state lawmaker Susan Wismer yesterday, who described it like waving a magic wand.

SUSAN WISMER: Even though the legislators do not have a clue what it is they're really voting on other than that these attorneys that deal with big money are telling them that it's good for South Dakota's economy to do this.

STRUBINGER: And like Wismer says, lawmakers see this as an issue about the economy. South Dakota, for decades, has tried to be as friendly to the banking industry as it possibly can.

MARTIN: Lee Strubinger of South Dakota Public Broadcasting, we appreciate your reporting and context on this. Thank you.

STRUBINGER: Yeah, you bet.

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MARTIN: All right. How complicit were some of the nation's biggest pharmacy chains in the opioid crisis?

INSKEEP: That's the question before a federal court in Cleveland this week. Two Ohio counties accuse CVS, Giant Eagle, Walgreens and Walmart of selling pain pills recklessly. The suit claims the pharmacies helped to create a black market for OxyContin and other drugs, although the companies deny wrongdoing.

MARTIN: We're joined now by our addiction correspondent, Brian Mann, who is in Cleveland. Just to note here, as well, Walgreens and the Walton Family Foundation, created by the founders of Walmart, are also NPR financial supporters. Brian, thanks for being here.

BRIAN MANN, BYLINE: Good morning, Rachel.

MARTIN: So these companies, these pharmacies, market themselves as a trusted part of the American health care system, right? But you heard a very different story yesterday in the courtroom. Tell us what they're accused of doing.

MANN: Yeah, one reason so many companies involved in the opioid business have settled cases like this one, Rachel, is that they don't want to go through weeks of embarrassing revelations in court, and you could really see why yesterday. Mark Lanier, an attorney representing two Ohio counties at the center of this case - he told the jury these pharmacy chains were so irresponsible with their opioid dispensing that drug dealers were able to use their outlets to build this black market pipeline of prescription pills, a pipeline that stretched from Florida all the way here to Ohio.

MARTIN: So what did the companies say in their defense at this point?

MANN: We've heard so far from Kaspar Stoffelmayr - he's lead attorney for Walgreens. And he pushed back hard. He told the jury this portrait of Walgreens handling opioids carelessly doesn't match the reality. He said pharmacists at their chain tried to be cautious with these highly addictive pills. And Stoffelmayr laid out an argument we expect to hear more from the other pharmacy chains in the days ahead, that the real blame for the opioid epidemic lies elsewhere, you know, with doctors who prescribe too many pills, with drug makers who lied about the safety of opioids and with government regulators who didn't crack down soon enough.

But I have to say, you know, attorneys for these companies do not have an easy job ahead. They're going to have to convince these local jurors that it made sense for pharmacy chains to dispense millions of these opioid pills every year in their community at a time when addiction and overdose deaths just kept rising.

MARTIN: And we should just point out, I mean, there's a reason this is happening in Ohio, right? Like, Ohio has just been the epicenter of so much of the crisis.

MANN: Hit really, really hard.

MARTIN: So remind us what's at stake in the overall case, Brian.

MANN: Well, there is a lot of money on the line, as well as these companies' reputations. This trial in Cleveland is widely seen as a test case. It'll help establish what, if any, liability these corporations bear for the opioid crisis not just here but all over the country. If this jury says these companies are on the hook and should pay to help solve this crisis, it could eventually cost these firms billions, maybe even tens of billions of dollars.

But, you know, in the final equation, Rachel, it's not actually just money. This is also life and death stuff, and here's why. Experts say most of that money would likely go to pay for drug treatment programs and addiction counseling, which are desperately needed right now as drug overdose deaths keep rising. In fact, they're rising faster than ever.

MARTIN: Right. This is not over. Brian Mann is in Cleveland for the first-ever federal opioid trial focusing on big pharmacy chains. Brian, as always, thank you so much for your reporting.

MANN: Thank you. Transcript provided by NPR, Copyright NPR.