Saturday, 11 August 2018

A Congressman, a Financial Deal and

A Congressman


A Congressman, a Financial Deal and an Intricate Web of  Conflicts
Representative Christopher Collins once said that the success of an obscure Australian company’s drug would be carved on his tombstone. Instead, its failure has upended his congressional career.
The three-term congressman’s infectious enthusiasm for Innate Immunotherapeutics, the small biotech firm led to his indictment on Wednesday when he and a number of other investors were accused of trading .
Prosecutors said that he tipped off his son to the poor results of the company’s clinical drug trial for a notoriously intractable sort of MS before they were public, allowing the son et al. to dump their stock and save many thousands of dollars.
Mr. Collins sat on the company’s board until May, and at one point was its largest shareholder.
The stock scandal has rippled through Congress, where his favorite stock tip had enticed a minimum of seven former or current House Republicans into investing alongside him, his two grown children and other friends.
It provided new ammunition for Democrats seeking to require back the House, and made Mr. Collins announce on Saturday that he wouldn't seek re-election to a fourth term.
In his statement, Mr. Collins called the trading charges “meritless” and vowed to fight them to possess his “good name cleared of any wrongdoing.”
While the opposite congressmen who invested in Innate wasn't implicated within the indictment, the allegations against Mr. Collins has revived involves stricter rules about financial investments or corporate board seats held by members of Congress while they're sitting on committees with oversight into those businesses.
Mr. Collins may are the most important investor in health companies on the House Energy and Commerce Committee, but one-third of its members also bought and sold biotech, pharmaceutical, and medical device stocks, an analysis by The NY Times has found.
Republican Representatives William Long II and Markwayne Mullin served with Mr. Collins on the panel’s health subcommittee and invested in Innate. The subcommittee weighed in on topics starting from the Food and Drug Administration’s authority over speeding up approval of the latest drugs to the Affordable Care Act.
 Beyond Innate Immunotherapeutics, Mr. Collins, among the wealthiest members of Congress has held leadership roles in other biotech companies that were little known or mentioned on Capitol Hill 
Until this past week, he was chairman of the board of directors of ZeptoMetrix, a personal lab company based in Buffalo that he co-founded which has received many dollars in federal contracts, consistent with government records.
He also reported owning between $25 million and $50 million in shares of the corporate, but has since transferred an unknown amount into his wife’s name, a corporation spokesman said. In June, he sold the maximum amount as $1 million of stock in Chembio Diagnostics, a medical tests and equipment manufacturer, consistent with his ethics disclosure forms.
Mr. Collins didn't disclose these ties in committee hearings when topics overlapped together with his business interests, including the event of a test for the Zika virus and whether the F.D.A. should more closely regulate some sorts of lab tests.
Earlier, in 2013, he mentioned the experimental drug that Innate was developing during a hearing about brain research, but didn't mention his financial stake within the company.
“Mr. Collins had no business serving on this publicly-traded company from the get-go,” said Meredith McGehee, executive of Issue One, a Washington ethics watchdog organization, noted that such a practice wasn't permitted within the Senate. “The House must update its rules.”
Since 2012, federal law has prevented members of Congress from trading stocks supported the tip they receive as lawmakers. Members of both chambers are permitted to carry stocks and members of the House of Representatives may serve on boards as long as they disclose it.
Generally, lawmakers don’t need to recuse themselves from a vote or other action which may affect their holdings unless they're virtually the sole investor who would benefit.
While many lawmakers have opted to take a position using broad mutual funds to avoid potential conflicts on individual holdings, some — like Mr. Collins — haven't.
In July of last year, a congressional ethics office found that Mr. Collins may have violated ethics rules by asking the National Institutes of Health for help with the planning of Innate’s now-failed clinical test.
This week, the speaker of the House, Paul Ryan, stripped Mr. Collins of his seat on the energy and commerce committee and asked the House ethics panel to research the allegations of trading.
Mr. Collins’s involvement with Innate dates back to 2005, when he leveraged his wealthy circle of friends and neighbors — many of whom would become political donors — to assist bail out the struggling company.
One local investor was Lindy Ruff, the previous coach of the Buffalo Sabres, the congressman told federal ethics investigators last year. “I sleep in a rich neighborhood with folks that have means,” he explained within the interview.

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