A House ethics watchdog has found “substantial reason to believe” that Rep. Chris Collins violated federal law and congressional rules by meeting with government researchers in his official capacity to benefit a biotech company he is invested in, and by sharing private information to drum up investments in that company.
The New York Republican was an early backer of Innate Immunotherapeutics, an Australian firm that was developing a new therapy for multiple sclerosis, and recruited investors that included family, his congressional staff and House colleagues — including Tom Price, who later served as Department of Health and Human Services secretary.
[House members see stock price of controversial biotech-firm investments plummet]
A high-stakes trial of Innate Immuno's drug failed earlier this year, and its chief executive said in August that the firm is likely to shutter. But the Office of Congressional Ethics started probing in March whether Collins overstepped bounds in his advocacy for the firm and corroborated some allegations in July.
The report's findings could leave Collins, an early supporter of President Trump's presidential campaign, vulnerable to ethics sanctions or even criminal prosecution based on allegations of insider trading.
The report was published Thursday by the House Ethics Committee pursuant to House rules requiring its public release. The panel is reviewing whether Collins has violated the chamber’s rules of conduct but has yet to make any determination and declined to make any comment Thursday.
Collins’s attorneys have denied the allegations of wrongdoing in the report. “Rep. Collins has done nothing improper, and his cooperation and candor during the OCE review process confirm he has nothing to hide,” they wrote in an Aug. 14 letter released Thursday by the Ethics Committee. “There is nothing in the record to suggest, let alone support, the conclusion that Rep. Collins violated House rules, standards of conduct or federal law.”
Collins himself dismissed the findings to reporters Thursday, calling the investigation a “witch hunt” prompted by a Democratic lawmaker’s complaint. He noted that the central allegation from Rep. Louise M. Slaughter (D-N.Y.) — that he supported a bill, the 21st Century Cures Act, that could have benefited Innate Immuno — was not supported by investigators.
Slaughter said Thursday that the report showed Collins “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.”
Said Collins, “She’s a despicable human being . . . You don’t go after another member with fabricated allegations like she did.”
Collins's ties to Innate Immuno have been under public scrutiny since January, when Price was found to have purchased a significant stake in the company amid his nomination as HHS secretary. Collins remains the largest shareholder in Innate Immuno, according to a listing on the firm's website.
Price did not cooperate with the OCE probe, according to the report.
The OCE did not corroborate an allegation that drove much of the media coverage of Collins’s ties to Innate Immuno — that he acted improperly in recruiting friends and colleagues, including Price, to participate in a special discounted “private placement” stock sale.
But it did find other new instances of potential wrongdoing — notably, a Nov. 18, 2013, visit to the National Institutes of Health, where Collins and a House staffer met with a key researcher into multiple sclerosis. In that meeting, Collins is alleged to have asked with help in designing Innate Immuno’s drug trial.
The meeting came after Collins, in a July 2013 hearing of the House Committee on Science, Space, & Technology, mentioned Innate Immuno’s drug to a top NIH official without disclosing his stake in the company. The official then invited Collins for a visit.
In interviews with OCE, Collins “stated that he went to NIH as a private citizen and that his visit had no relation to any official duties” but also described it as akin to a “high school field trip,” the report said. Asked why he brought a legislative staffer along to the meeting, he responded, “I don’t go anywhere alone.”
An unnamed NIH employee told investigators that Collins represented himself as being connected with Innate Immuno and said the firm was in need of “some help with the design of the next Phase 2 trial and he asked me whether I would be willing to help them and I said yes.” He did not, the employee said, discuss any constituents affected or any legislation involving multiple sclerosis.
The report also found that Collins on several occasions gave potential investors details on Innate’s drug trials that were not available in the company’s public filings. That, investigators found, could implicate federal insider-trading laws and the Stock Act — a 2012 law that makes clear members of Congress are covered by those existing laws.
“Given Innate’s intention to partner with, or become acquired by, a large pharmaceutical company, updates on patient enrollment, the eventual completion of enrollment, and specific communications with pharmaceutical companies were likely important facts for investors making a decision about whether to purchase or sell Innate stock,” the report said.
Collins said Thursday that the NIH meeting was cleared in advance by the House Ethics Committee: “They said, ‘As long as there’s no nonpublic information discussed’ — and there certainly wasn’t — ‘sure, you can go on a tour anywhere you want.’ ” There is no mention of any official clearance for the meeting in the OCE report.
The discussion of Innate Immuno’s trial, he added, “was an afterthought at the end of a tour. I clearly understand the optics, but there was nothing done that was wrong.”