Congressional investigators say there is a "substantial reason to believe" Republican Rep. Chris Collins of New York shared material, non-public information about a drug company he had a major financial stake in and took official actions to assist the company.
The conclusions were included in an announcement Thursday from the House Ethics Committee that it was extending its review of the three-term congressman, an early and strong supporter of President Donald Trump.
Collins, who has denied any wrongdoing, was the largest shareholder of Australia's Innate Immunotherapeutics Limited and sat on the company's board of directors. An ethics watchdog group alleged Collins sponsored legislation that would benefit the company and said his active stock trading warranted investigation.
The independent Office of Congressional Ethics conducted the initial review and submitted a 29-page report along with its recommendations to the ethics panel.
The OCE recommended the Ethics Committee further review two allegations against Collins:
— That he shared non-public information that may have been important to investors deciding whether to purchase Innate stock.
— That he used his official role as a congressman to assist Innate by discussing the company with National Institutes of Health employees and requesting that a government researcher meet with the company's chief scientific officer.
The OCE recommended the dismissal of a third allegation, that Collins purchased discounted stock that was offered to him because he's a congressman.
"Throughout my tenure in Congress I have followed all rules and ethical guidelines when it comes to my personal investments," Collins said upon the release of the OCE's report. "I was elected to Congress based upon my success in the private sector, and my willingness to use that experience every day to facilitate an environment that creates economic opportunity and jobs."
Innate Immunotherapeutics' stock value has tanked by more than 94 percent in recent months and now trades for pennies a share. The company's prospects dropped after its multiple sclerosis drug failed to demonstrate a meaningful benefit for patients.
A source close to the congressman, who spoke on condition of anonymity to discuss private actions, said Collins invested about $5 million in the company over the years and did not sell any of his shares.
The report cited emails to U.S.-based investors as examples of information it viewed as nonpublic. One email provided an update on the number of participants in a study of the multiple sclerosis drug. Another email talked about urging from "big pharma" to move forward with a plan for scaling up the manufacturing of the drug.
In a letter to the Office of Congressional Ethics, Collins' attorney, Mark Braden, argued that even if certain statements in the emails contained nonpublic information, it was not material to the decisions investors would eventually make. He said the information cited by the OCE is "is general, the result of common sense, or so widely known that it cannot meet even the most lenient test of materiality."
Public Citizen had requested that the OCE review whether Collins and former Rep. Tom Price had used their office for personal benefit. Price was also an investor in Innate and served in the Trump administration as secretary of Health and Human Services until his resignation last month after reports of his extensive private charter travel at taxpayer expense.
Craig Holman, a lobbyist for the liberal watchdog group, said the OCE report is very telling of lax ethical behavior by Collins in his stock-trading activity.
Rep. Louise Slaughter, D-N.Y., also asked agencies to investigate Collins and said the OCE's report shows 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."
Collins cooperated with the Office of Congressional Ethics, but Innate Immunotherapeutics and Price refused to do so, according to the OCE report.
Braden said Collins has produced more than 2,800 pages of documents and provided extensive sworn testimony. He said the OCE's recommendations are the "result of a tortured interpretation of reality" and should be dismissed.