Finance

No wrongdoing found in Kodak COVID-19 drug production deal: report

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A federal watchdog agency has reportedly determined a since-frozen U.S. government loan to Eastman Kodak to produce drug ingredients during the coronavirus pandemic was not improperly awarded.

The inspector general (IG) for the U.S. International Development Finance Corporation (DFC) provided Sen. Elizabeth Warren (D-Mass.) with his analysis of the loan last week following her August request for an assessment, according to The Wall Street Journal.

Inspector General Anthony Zakel wrote that his probe did not find any evidence of conflicts of interest or official misconduct in relation to the $765 million loan, the Journal noted.

As originally announced, the loan would have allowed Kodak to produce ingredients for generic drugs as potential coronavirus treatments including hydroxychloroquine, the antimalarial drug President Trump heavily promoted as a treatment for the virus. Research has indicated the drug is not effective in treating coronavirus infections.

In the wake of the announcement, the Securities and Exchange Commission also announced an investigation into the loan, as did several committees in the Democratic House. The DFC later imposed an indefinite hold on the loan.

In the new assessment, Zakel reportedly said that Kodak announced the loan while several steps in the process were still underway, such as whether the loan strategy met DFC requirements. However, he said it was not inappropriate to consider the company for the loan, the Journal noted.

“The record is abundantly clear and the independent IG review confirms that DFC followed its standard process, under its standard timeline, driven by career finance professionals,” a DFC spokesman told the newspaper.

However, a Warren aide noted that the review did not examine possible contacts involving the White House during the loan process. 

In its own internal review, Kodak said the company did not break any laws with its disclosure, but faulted a gift of stock by board member George Karfunkel to a charity he founded the day after the government announcement of the loan.

Tags Coronavirus Donald Trump Elizabeth Warren Kodak

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