"Billions intended to heal the opioid crisis are being spent on questionable expenditures, from surveillance cameras to police gear, as oversight mechanisms fail to keep pace with local governments’ newfound financial power."
The nation’s opioid crisis, a devastating epidemic fueled by the aggressive marketing of prescription painkillers, has resulted in a monumental financial reckoning. Pharmaceutical companies have agreed to pay approximately $58 billion in settlements to address their role in this public health catastrophe. While this substantial sum offers a beacon of hope for addiction treatment providers, researchers, and government entities grappling with budget shortfalls, a critical chasm in oversight is emerging, threatening to squander this opportunity. Nearly half of these settlement funds are being distributed directly to local governments, entrusting county commissioners and city councilors with the responsibility of allocating resources to their communities. However, many of these local leaders lack the specialized training and robust health infrastructure necessary to navigate complex addiction policy, leading to spending decisions that critics argue are unlikely to effectively combat substance use disorders or save lives.
This disbursement model, intended to empower local decision-making, has inadvertently created a landscape ripe for mismanagement and questionable expenditures. The funds, often described by those who have lost loved ones to overdose as "blood money," are increasingly being directed towards initiatives that bear little to no resemblance to addiction treatment or prevention. In New York, for instance, a significant portion of the state’s opioid settlement allocation – approximately 46% – is under the direct control of local governments. Public records, meticulously gathered by the nonprofit advocacy group Legal Action Center and exclusively shared with KFF Health News, reveal that some counties have allocated tens of thousands of dollars to items such as surveillance cameras, advanced technology for police data extraction from locked cellphones, and even goggles that simulate intoxication. While these purchases may be legally permissible, they are viewed by many as a profound insult to victims and their families, failing to directly assist those struggling with addiction or provide solace to those who have suffered loss.
Jasmine Budnella, director of drug policy at VOCAL-NY, an organization dedicated to serving individuals impacted by the war on drugs and tracking settlement funds, warns of the potential for local governments to "go rogue" without adequate oversight. This concern is amplified by a systemic issue where advocates and families seeking accountability often find themselves navigating a bureaucratic labyrinth of state agencies that deflect responsibility. "It feels like the Spider-Man meme, where it’s like everybody’s pointing at each other," Budnella remarked, lamenting the absence of a clear authority to intervene when funds are misapplied. "Somebody needs to be able to have the stick and slam their hand on the table and be like, ‘You’re doing this wrong and this is the consequence.’"
The experiences in New York serve as a microcosm of a broader national trend where regulatory bodies appear to be evading accountability, while various interests compete for this substantial financial windfall. Years of data compiled by KFF Health News, in collaboration with the Johns Hopkins Bloomberg School of Public Health and the addiction nonprofit Shatterproof, have documented a pattern of settlement money being diverted to law enforcement equipment like night-vision goggles and bulletproof vests, unproven prevention programs such as drug-awareness magicians for children, and even to plug general budget deficits. The question of who is responsible for taking action on these expenditures, which many individuals harmed by the crisis deem inappropriate, remains largely unanswered.
The decentralized nature of these settlement agreements, with control of funds often split among multiple entities within each state, has created a leadership vacuum. The federal government, which played a minimal role in the multi-district litigation that resulted in these settlements, offers little to no guidance or oversight. Advocates and families, despite their earnest efforts to demand accountability, possess limited leverage. While a few states have enacted new legislation to address the issue, progress is proving to be slow and uneven across the country.
The settlement agreements themselves mandate that the majority of funds be dedicated to "opioid remediation," a broad term that encompasses over 100 suggested expenditures. However, the wide scope of these suggestions leaves considerable room for interpretation. Compounding this ambiguity, many states, including New York, have designated a portion of settlement dollars as unrestricted, granting local governments broad discretion in their spending. This flexibility comes at a critical juncture, as federal budget cuts have jeopardized addiction-related services, increasing the demand for alternative funding streams. Despite a recent decrease in overdose deaths from their 2022 peak, the crisis continues to claim approximately 186 lives daily.
Alexis Pleus, a resident of Binghamton, New York, whose 28-year-old son Jeff Dugon died of a heroin overdose in 2014, expressed profound disappointment. "We really are wasting this opportunity to use these funds to turn the epidemic around," she stated. Pleus, who now runs a nonprofit dedicated to supporting individuals who use drugs and their families, finds solace in the hope that these funds could spare other families the heartache she has endured. "We need oversight," she emphasized, noting that her organization is a recipient of opioid settlement funds from her county for essential services.
In New York, three primary entities have been identified as potential watchdogs: the Office of Addiction Services and Supports (OASAS), the Attorney General’s office, and the Comptroller’s office.
The Lead State Agency: Office of Addiction Services and Supports (OASAS)
New York’s opioid settlement documents officially designate OASAS as the "lead state agency." The office distributes a portion of settlement dollars through grants, guided by recommendations from the state’s Opioid Settlement Fund Advisory Board. Crucially, OASAS possesses the authority to "engage in oversight and audits of projects and programs" funded by settlement cash and "may withhold future funds" from local governments that fail to comply with specific requirements.
Jerry Gretzinger, an OASAS spokesperson, informed KFF Health News that the office has not yet exercised its power to withhold funds but acknowledges its oversight responsibilities. "OASAS has a duty to ensure these funds are used responsibly and strategically to build programs that will have a lasting impact in reversing this crisis," Gretzinger stated. Currently, the agency is auditing the use of funds by 19 local governments to ensure compliance with "reporting and recordkeeping requirements." However, this auditing process may not extend to the more fundamental question of whether the money was spent on appropriate uses, a concern voiced by many advocates.
Some stakeholders express frustration with the seemingly narrow scope of OASAS’s oversight. For example, legislation enacted in the previous year’s state budget mandated local governments to publicly report their settlement fund expenditures for the first time. OASAS has compiled links to these reports on its website. Nevertheless, according to Gretzinger, the agency does not review the accuracy or depth of this data, relying solely on "the information as it is provided" by the localities. Christine Khaikin, a deputy director at the Legal Action Center, which obtained public records detailing local spending in New York, found this approach lacking: "That doesn’t feel like oversight."
Members of the state’s Opioid Settlement Fund Advisory Board have also urged OASAS to provide more comprehensive data and evaluation of fund utilization. However, during a February 2025 meeting, OASAS Commissioner Chinazo Cunningham appeared to deflect responsibility concerning the 46% of settlement money directly allocated to counties and cities. "OASAS has no oversight over these portions of dollars," she stated, adding, "In terms of what kind of data each county collects, we cannot dictate exactly what that information is."
Examples of Questionable Spending Fueling Calls for Oversight in New York
The Legal Action Center’s extensive public records requests to 56 New York counties and New York City revealed a mixed bag of expenditures. While many allocations were directed towards evidence-based addiction treatment, recovery, and prevention initiatives, others raised significant concerns. Cortland County, for instance, directed $150,000 in settlement funds to "Sheriff Jail" with no further explanation, and the county did not respond to repeated requests for clarification. Sullivan County allocated over $30,000 for Cellebrite technology, used for extracting data from cellphones, and more than $37,000 for Tasers, justifying these purchases from unrestricted funds.
These expenditures deeply trouble families affected by the opioid crisis. Alexis Pleus articulated a common sentiment: "Anything that is not directly tied to people who are struggling with opioid addiction or the loss of someone is a poor use of funds." Her organization, which receives settlement funds from Broome County, is committed to supporting those impacted by the crisis. Many jurisdictions have also failed to disburse a substantial portion of their allocated funds, a trend observed in other states as well, prompting concerns that thoughtful planning is taking an excessive amount of time or that other motives might be at play. The substantial interest generated by millions of dollars sitting in bank accounts has raised suspicions. Notably, Nassau County’s transfer of nearly $14 million in accrued interest from unused opioid settlement funds to its general fund, a move reversed after public outcry, highlights the potential for financial maneuvering. Advocates fear such attempts are occurring elsewhere, hidden within complex budgeting documents, necessitating constant vigilance from organizers, advocates, and service providers.
The Top Law Enforcement Officer: Attorney General’s Office
New York Attorney General Letitia James has been a prominent national figure in prosecuting pharmaceutical companies for their role in the opioid crisis, consistently highlighting her office’s success in securing billions in settlement funds for the state. However, when questioned about her office’s role in ensuring the appropriate use of these funds, the response indicated a deferral to other agencies. "While our partners in state and local governments distribute and oversee these funds, we will continue our work to hold accountable the companies responsible for fueling the spread of addictions and overdoses," stated spokesperson Grant Fox.
This position contrasts sharply with the expectations of many, including state Senator Nathalia Fernandez, who chairs the committee on alcoholism and substance use disorders. Senator Fernandez, along with other advocates and a member of the opioid settlement advisory board, identified the Attorney General’s office as a key enforcement entity. "The money is here because of their efforts," Senator Fernandez asserted. "I believe it is under the Office of the Attorney General to enforce." Jasmine Budnella echoed this sentiment, stating, "It would be a shame for all of their work that they have done to secure all this funding for it to be misspent."
In contrast to New York’s approach, Attorneys General in Michigan and Kansas have adopted more proactive stances, issuing guidance that restricts certain expenditures, including many law enforcement-related purchases that have drawn criticism from New York advocates. James’s office did not respond to inquiries about whether it would consider creating a similar list of prohibited expenditures.
The Fiscal Watchdog: Comptroller’s Office
The role of the state Comptroller, as a steward of New York’s finances, has been proposed as a potential avenue for oversight, possibly through conducting or requiring audits. Earlier this year, the Reason Foundation, a libertarian think tank, released a model law proposing audit requirements for opioid settlement fund recipients. This blueprint suggests that recipients of over $1 million in settlement funds should undergo independent financial statement reviews and transaction testing to verify that funds were used for their intended purposes, while smaller grantees would provide unaudited accounting. Mariana Trujillo, a co-author of the Reason Foundation’s plan, clarified, "We’re simply trying to ensure recipients follow through with their promises."
While no state has yet adopted this model legislation, the office of New York Comptroller Thomas DiNapoli confirmed it is currently conducting an audit. This audit, initiated in February, "is looking at OASAS’s oversight" of opioid settlement money, including funds managed by both state and local governments, according to spokesperson Mary Mueller. Any future enforcement actions, Mueller stated, "will depend on the results of our current work and our ongoing monitoring." This initiative aligns with similar actions taken by comptrollers and auditors in New Jersey, Missouri, and Nashville, Tennessee, who have scrutinized settlement fund allocations.
These initial steps have instilled a degree of hope among advocates and researchers for the responsible stewardship of opioid settlement dollars, which are expected to be disbursed over the next decade. Layal Bou Harfouch, a co-author of the Reason Foundation’s model law, expressed concern over past misuse of funds, citing examples of concerts and police shooting ranges being funded. "If we can prevent that at least a little and have these funds be a bit more focused, I don’t think it’s too late," she concluded. The ongoing efforts by entities like the Comptroller’s office represent a crucial endeavor to ensure that the significant financial resources intended to combat the opioid crisis are indeed channeled towards effective treatment, prevention, and recovery, rather than being dissipated through a lack of oversight and accountability.
