Guilty...

Ethics investigators suggest Rep. Chris Collins may have engaged in insider trading

Nicole Gaudiano

Congressional ethics investigators have concluded there is “substantial reason to believe” Rep. Chris Collins, R-N.Y. engaged in insider trading and either took or requested official actions to benefit a company in which he’s the largest shareholder, according to a report issued Thursday.

Those may violations of House rules, standards of conduct and federal law, the report states.

The House Ethics Committee, after receiving the report from the independent Office of Congressional Ethics, announced it would extend its review of the matter under a procedure that does not set deadlines for further public announcements and rarely results in punishment.

"Throughout my tenure in Congress I have followed all rules and ethical guidelines when it comes to my personal investments," Collins said. "I thank the House Ethics Committee for their meticulous review of this case and for the tough work they do to hold all Members of Congress accountable to the highest standards of conduct."

Collins — who was the first member of Congress to endorse Donald Trump's presidential campaign — is a board member of an Australian biotechnology company called Innate Immunotherapeutics.

The OCE report states Collins discussed Innate at a meeting at the National Institutes of Health in November 2013 and requested that an NIH employee meet with Innate employees to discuss clinical trial designs.

Also, some information Collins shared with Innate investors was likely nonpublic and may have been important to investors making a decision on whether to purchase stock, according to the report.

Collins’ lawyer said the information Collins provided was public or otherwise immaterial, and there was nothing improper about his NIH meeting.

Another investor in the company was former Health and Human Services Secretary Tom Price, a former Congressman from Georgia, whose stock trades raised questions about “insider trading” during his confirmation hearing. Collins told USA TODAY earlier this year that he informed Price about a "private placement" offering to select investors but didn’t encourage him to invest.

Price, who resigned from HHS amid revelations he spent more than $1 million in taxpayer money on private air travel, “refused to cooperate” with the investigators.

Shortly after the private placement purchase, legislation that Collins authored to speed up clinical trials of drugs was signed into law as part of the 21st Century Cures Act and the company's stock price tripled shortly thereafter. The stock price plummeted in June, however, when the company announced its lead drug failed to help secondary multiple sclerosis patients in a clinical trial.

The report did not address Collins' work on the legislation, and OCE investigators found there was not substantial reason to believe Collins purchased discounted stock that was not available to the public and offered to him because he’s a member of Congress.

Collins’ lawyer E. Mark Braden said the review was spurred by “unfounded accusations” originating from political opponents, including Rep. Louise Slaughter, D-N.Y., from his neighboring district, who he accused of a waging a “mudslinging campaign to seek a personal vendetta.”

“Rep. Collins has been open, honest, and at all times above-board in fulfilling his duties as a member of the House of Representatives,” Braden wrote. “His ownership of stock, role in, and connection to Innate is no secret. As an investor in Innate and advocate of Innate’s mission he lauded the company, its science, and its goal of finding a treatment for a crippling and deadly disease.”

Slaughter, who authored a law to bar members from using information learned on the job to make money on the stock market, said she called for the investigation because evidence suggests Collins "used his position in the public trust for his own personal gain."

"(Collins) put his obsession to enrich himself before the people he swore to represent," Slaughter stated. "It is a disgrace to Congress and to his constituents, who deserve better.”

OCE was set up by Congress in 2008 to review ethics complaints against Members of Congress and to forward their findings to the Ethics Committee for adjudication. OCE does not have the ability to subpoena witnesses or issue punishments.