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What you need to know for 12/12/2017

House Ethics Office: New York congressman may have violated rules

House Ethics Office: New York congressman may have violated rules

Panel will further review findings
House Ethics Office: New York congressman may have violated rules
Rep. Chris Collins (R-N.Y.) on Capitol Hill in Washington on Nov. 15, 2016.
Photographer: Al Drago/The New York Times

Rep. Chris Collins of New York may have violated federal law by sharing nonpublic information about a company on whose board he served, according to a report released Thursday by the Office of Congressional Ethics.

The report also said Collins may have broken House ethics rules by meeting with the National Institutes of Health and asking for help with the design of a clinical trial being set up by the company, Innate Immunotherapeutics. Collins, a Republican whose district encompasses much of western New York, is also the company’s largest shareholder, reporting for the year 2016 that he held between $25 million and $50 million in the company.

The House Committee on Ethics, which has the power to discipline members of the House for wrongdoing, said Thursday that it would further review the findings, a step short of opening a formal investigation. The bipartisan, quasi-independent office, which refers ethics issues to the committee, recommended the review by a unanimous vote.

Stanley Brand, a prominent criminal defense and ethics lawyer in Washington, said the ethics committee could still choose to drop the case. “It’s not a foregone conclusion that the ethics committee is going to take this up,” he said.

The inquiry centers on Collins’ investment in Innate, a struggling biotech company that trades on the Australian stock exchange and has just one drug, to treat multiple sclerosis, in development. Despite the company’s low profile, its investors have included several other Washington power players, including Tom Price, the former secretary of Health and Human Services who recently resigned under fire, and four other members of Congress.

Collins told reporters Thursday he had done nothing wrong. He described the inquiry as being the result of a “witch hunt” driven by Rep. Louise Slaughter, D-N.Y., who requested the investigation. The office dismissed another allegation — that Collins purchased discounted stock not available to the public.

Collins’ involvement with the company surfaced in December of 2015, and picked up steam during the confirmation of Price, a former Republican congressman from Georgia whose active investment in pharmaceutical and health care stocks drew scrutiny — and calls for an investigation — from Democrats, including Slaughter.

In a statement, Slaughter said, “He put his obsession to enrich himself before the people he swore to represent. It is a disgrace to Congress and to his constituents, who deserve better.”

The congressional ethics office said Price refused to cooperate with their investigation, as did Simon Wilkinson, Innate’s chief executive, and other company officials and investors. It recommended that the House committee issue subpoenas to those who did not cooperate. Price and officials with Innate could not be reached for comment.

Collins enthusiastically pitched Innate to nearly everyone he met, the report said, discussing the company with members of Congress and his own staff, “most” of whom were also investors. “The bigger question would be, who haven’t I talked to?” he told investigators. Two of Collins’ children also owned stock.

The report found that Collins frequently updated shareholders on the company’s activity, including nonpublic information, in possible violation of federal law and House rules. Some of the nonpublic information he shared in emails, the report said, included details about how many participants had enrolled in the company’s crucial clinical trial and details about the company’s communications with large drugmakers who might be interested in acquiring Innate.

The report also found that Collins may have violated ethics rules in mingling his official and personal roles when interacting with employees at the NIH. In 2013, during a public hearing, Collins mentioned the drug Innate was developing — called MIS416 — without disclosing his financial interest.

His congressional staff later set up a meeting with NIH staff. Collins told them he was associated with Innate and asked one employee — an expert on multiple sclerosis — for assistance with the company’s clinical trial, the report said. That employee later met with Innate’s chief scientific officer three times, the report found.

In comments to reporters, Collins said it was the NIH that “invited me to go there and this was an afterthought at the end of a tour.” He said the later meetings were a “scientist to scientist” conversation about the frustrations of developing treatments for multiple sclerosis, and nothing more.

Price divested from Innate as well as other health care stocks after he became the head of HHS, but Collins is still the company’s largest investor. Price resigned in September from his Cabinet post after facing criticism for his expensive use of charter jets for government trips.

In June, Innate’s stock plummeted by more than 90 percent after it announced that the clinical trial of its drug had failed. Michael A. Quinn, Innate’s chairman said in the company's annual report that Innate is still reviewing the results of the trial and that the company's future hinges on the drug's success.

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