Ethics watchdog: Rep. Collins may have violated federal law over stocks

Ethics watchdog: Rep. Collins may have violated federal law over stocks
© Greg Nash

Rep. Chris CollinsChristopher (Chris) Carl CollinsBiden taps Damian Williams as US attorney for Manhattan New York lt. gov. says she is 'prepared to lead' following Cuomo resignation Outrage grows as Justice seeks to contain subpoena fallout MORE (R-N.Y.) may have violated federal law and House rules by sharing nonpublic information with investors of an Australian pharmaceutical company, the Office of Congressional Ethics (OCE) alleged in a report released Thursday.

The OCE, an independent entity that reviews allegations against House members, concluded in a report that there is “substantial reason to believe” Collins improperly shared nonpublic information in the purchase of Innate Immunotherapeutics Limited stocks.

OCE also found reason to believe that Collins, one of President Trump's most vocal supporters in the House, used his position as a member of Congress to help Innate employees secure a meeting with National Institutes of Health (NIH) staff to discuss clinical trial designs, which would be a violation of House rules. Lawmakers are not allowed to assist entities in which they have significant financial interests.

Collins dismissed the authority of OCE, noting it does not have subpoena power, and maintained that he had done nothing wrong.
“They’re a waste of taxpayer money and they accomplish nothing,” Collins told reporters in the Capitol. 
OCE recommended that the House Ethics Committee further review the allegations. For now, the House Ethics Committee is extending its review and is not opening a formal investigative subcommittee at this point.

Only the House Ethics Committee has power to rebuke lawmakers for violating rules.

However, OCE dismissed an allegation that Collins bought discounted stock that was not available to the public and offered to him based on his status as a member of Congress.

Collins serves in an uncompensated role as a board member of Innate and is the company's largest stockholder.

Members are prohibited from trading stocks using insider information under a law enacted in 2012. 

A statement from Collins’s legal team said the review was “spurred by unfounded accusations that trace their origin to political opponents,” pointing specifically to Rep. Louise Slaughter (D-N.Y.).

Slaughter, the author of the 2012 law banning lawmakers from insider trading, had asked the Securities and Exchange Commission, the acting U.S. attorney for the southern district of New York, the House Ethics Committee and the OCE to investigate Collins following a report by The Hill about his boasts to other lawmakers about how much money he’s made by tipping them off to Innate.

“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,” Slaughter said in a statement following the publication of the OCE’s report on Thursday.

Collins’s legal team further argued that the information in Collins’s messages to investors was public knowledge and dismissed OCE’s conclusion that any of the material it deemed nonpublic was relevant to investors. The meeting between Innate and the NIH, they added, was routine and in line with the agency’s mission of supporting medical research and communicating health sciences information.

“Rep. Collins has done nothing improper, and his cooperation and candor during the OCE review process confirm he has nothing to hide,” his legal team stated.

The OCE report noted that in all but one case, emails from Collins to U.S.-based Innate investors were produced from third-party witnesses. Collins explained to OCE that “he deletes his emails and texts ‘generally three times a day.’ ”

OCE identified multiple instances in which Collins provided updates to U.S. investors regarding clinical trials and a private placement offering. The ethics watchdog concluded that details in the emails from Collins “were likely important facts for investors making a decision on whether to purchase or sell Innate stock.”

Many associates of Collins have purchased Innate stock, including his children, most of his congressional staff and former Secretary of Health and Human Services Tom PriceThomas (Tom) Edmunds PriceWant to evaluate Donald Trump's judgment? Listen to Donald Trump Former Georgia ethics official to challenge McBath A proposal to tackle congressional inside trading: Invest in the US MORE, according to the OCE report. When asked by OCE about his communications with members of Congress and staff about Innate, Collins responded: “The bigger question would be, who haven’t I talked to?”

Price resigned in late September following a series of Politico reports about his use of private jets that cost taxpayers more than $400,000 instead of cheaper commercial alternatives.

Price’s investments in Innate came up during his confirmation process to serve as the head of Health and Human Services. OCE noted that he declined to cooperate with its investigation.

The second allegation against Collins concerns discussions with NIH employees in 2013. The visit to the NIH by Collins, a member of the House Energy and Commerce Committee, was scheduled and attended by his congressional staff. Yet Collins told OCE that he went to the NIH as a private citizen and described the visit as a “tour,” a “high school field trip,” and like going “to the Smithsonian.”

When asked by OCE why he was accompanied by his then-legislative assistant, Collins replied: “I don’t go anywhere alone.”

Two NIH employees told OCE that Collins asked if they knew about Innate’s multiple sclerosis drug and would meet with people from the company. That led to Innate’s chief scientific officer meeting with the NIH.

Collins told OCE he was “sure” he would have discussed Innate at the NIH meeting, but could not recall specific conversations.

Collins said he has spent about $165,000 on lawyers so far.
– This story was updated at 5:48 p.m.