There’s “substantial reason to believe” that Rep. Chris Collins (R-NY) broke federal law and congressional rules by sharing insider information to spur investment and by meeting with government researchers to advocate for Innate Immunotherapeutics (ASX:IIL) – an Australian biotech that he’s invested in.
The Republican lawmaker recruited a number of investors for the company, including Dr. Tom Price, whose involvement in the company stirred up some trouble when he was vetted for his former role as Health and Human Services secretary.
The Office of Congressional Ethics began looking into Collins involvement with the company earlier this year, trying to understand if he broke any laws in advocating for the firm.
The 29-page report was published yesterday by the House Ethics Committee and the panel reviewing Collins’ conduct has not determined whether he has officially broken any of the chamber’s rules.
Collins’ attorneys denied any allegations of wrongdoing, saying that he “has done nothing improper and his cooperation and candor during the OCE review process confirm he has nothing to hide,” according to The Washington Post.
The primary allegation against him was brought by Rep. Louise Slaughter (D-N.Y.), who claimed that Collins supported the 21st Century Cures Act because it could have benefited Innate Immunotherapeutics. Collins told reporters this week that Slaughter’s allegation was not supported by investigators and called the probe a “witch hunt.”
“She’s a despicable human being,” he said, WaPo reported. “You don’t go after another member with fabricated allegations like she did.”
Although the OCE did not address an allegation that he improperly recruited colleagues and friends to join a discounted private placement, the report did point out a visit that Collins and a House staffer made to the NIH where the two met with a multiple sclerosis researcher. There, the report alleges that Collins asked for help in designing Innate’s drug trial.
“If Representative Collins took official actions or requested official actions that would assist a single entity in which he had a significant financial interest, then he may have violated House rules and standards of conduct,” the report says.
The report also notes that Tom Price, among others, refused to cooperate in the OCE probe.
Collins remains Innate’s largest shareholder, owning more than 37 million shares in the company.
Earlier this year, his 16.8% stake was worth $45.5 million. But since the Australian biotech’s lead drug failed in a 93-patient trial in June, shares in the company dropped to 4¢ apiece and Collins’ holdings are now valued at just $1.5 million.