PUBLISHED ON APRIL 25, 2017
Congressman Chris Collins is quite wealthy by just about any standard. Roll Call ranks the Upstate New York Republican the 19th richest Member of Congress, with an estimated net worth of approximately $24 million. As a wealthy investor, it’s not unusual for him to make multi-million dollar stock purchases.
In 2013, for example, he bought $2.2 million in stock as part of the initial public offering for Innate Immunotherapeutics, an Australian pharmaceutical company. Innate has developed a drug to treat Multiple Sclerosis in its advanced stages.
After the IPO, he bought even more stock. When the company needed a secondary round of funding, he encouraged his staff, his kids, and his close donors to buy as well. He even convinced over 10 of his fellow Republican congressmen buy in.
As of now, over 30 percent of Innate Immunotherapeutics has been purchased by Rep. Collins, his family, and the close associates he turned on to the stock.
If the story ended here we’d be writing about a savvy investor whose faith in this fledgling company helped bring a new treatment for a debilitating disease like MS to market. So what if he made a small fortune along the way?
But the story doesn’t end here. In fact, this is just where it begins.
Last year, Rep. Collins, a member of the House Energy and Commerce Committee, had language inserted into a the ’21st Century Cures Act,’ a bill signed into law by President Obama that, among other things, will fast-track foreign-made drugs like Innate’s MS treatment for approval by the Food and Drug Administration.
According to an explosive exposé published by the Daily Beast on Monday:
Innate has just one product, MIS416, a drug to treat secondary progressive multiple sclerosis, a worsening of the disease that affects 30 percent of MS patients. If approved by the FDA, MIS416 would be the only drug to treat this form of the disease, according to Innate. In its 2013 prospectus Innate estimated that MIS416 could generate as much as $3 billion in profits in the U.S.
You read it right: Billion with a big fat capital ‘B.’ Not bad for a day’s work.
But here’s the kicker: None of this is illegal, and it might not even be unethical. Thanks to massive loopholes in conflict of interest laws like the Stop Trading on Congressional Knowledge (STOCK) Act, congressmen and women of both parties are able to avoid the kinds of ethics and insider trading violations that snag private citizens all the time.
Had Rep. Collins navigated his ways through those loopholes more carefully, he might have avoided getting flagged as well. As the Cures Act moved through Congress, however, he got sloppy, and some ethics lawyers say the timing of his second round of purchases may pose a serious problem for the New York Republican.
The Daily Beast story notes that:
“In August 2016, he bought as much as $1 million in company stock. Two months later, Collins’s language was present in the Cures Act. Two weeks later President Obama signed the bill into law.
“Richard Painter, a former ethics lawyer in the George W. Bush administration, said Collins was being ‘highly reckless’ in buying Innate stock while the Cures Act was working its way through Congress.
‘You’re asking for an investigation and maybe criminal prosecution if you know your legislation will help the company, and you trade on the stock before the bill is passed.’”Given all the investigations needed in Congress right now, this may not rank among the most urgent. At the very least, however, it exposes the laughable state of conflict of interest laws in Congress.