Prosecutors and Graham’s office say the senator had no knowledge of the alleged wrongdoing. Graham spokesman Kevin Bishop said any questionable donations will be handed over to the U.S. Treasury.
“Senator Graham believes those who receive taxpayer dollars have both a legal and moral obligation to use the funding in an appropriate manner,” Bishop said. “If an individual violates that trust, there should be serious consequences.”
U.S. Attorney William N. Nettles said of Graham’s office: “As the indictment states, they have cooperated fully and there is no evidence that they had any information that anything illegal was happening.”
The indictments point to the connections between Dong’s biotechnology company, GenPhar, and Graham, who championed nearly $20 million in federal earmarks for the firm’s vaccine research.
GenPhar employees rank among the top givers to Graham in recent years, while also donating to other Republicans, according to Federal Election Commission records. Prosecutors say that at least $31,000 in donations to Graham came from an unidentified foreign national, who wired $36,000 from a Frankfurt bank in 2007 to bankroll the scheme.
Dong and his wife arranged a series of donations to Graham’s main campaign account and political action committee over the next two years from relatives and GenPhar employees, including some in the name of their young daughter, according to the indictment. Federal law prohibits foreign donations to U.S. campaigns or using others as conduits to evade contribution limits.
Graham’s office acknowledged that Dong and his wife had volunteered to raise $25,000 for his campaign in 2008 but said they had no formal role in the campaign.
In September 2007, Dong suggested in an e-mail to the foreign national that the contributions had helped the company win federal funding. The project is not identified in court records, but the National Institutes of Health awarded $1.1 million to GenPhar on Sept. 7, 2007, for a “preclinical evaluation” of a vaccine for the Marburg virus, records show.
“This is your money at work,” Dong allegedly wrote in the e-mail six days later.
From 2004 to 2010, GenPhar received $19.6 million in federal grants from NIH and the military secured with help from Graham, according to the senator’s office. The money was focused on attempting to develop vaccines for use against the Ebola, Marburg and dengue viruses.
In one example, Graham requested a $5 million earmark for GenPhar for a program to develop a vaccine against dengue fever. The company eventually received about $1.3 million in 2010, according to LegiStorm, which tracks earmarks.
The indictment accuses Dong of using false timesheets and other bogus paperwork to skim off millions of federal dollars for construction, travel and personal expenses, often diverting it through a second company he created called Vaxima. In one example, prosecutors say Dong submitted forms claiming the cost of a “wave bioreactor,” but the machine was never purchased.
Dong also allegedly used federal money to help pay for lobbying expenses, which totaled $280,000 over seven years through American Defense International, a Washington lobbying firm, according to disclosure records. A spokesman said the firm had no knowledge of any criminal activity.
The indictments were handed up in April but weren’t unsealed until Monday.
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