WASHINGTON – Rep. Chris Collins' political – and perhaps legal – problems may have deepened Thursday, with new revelations that he repeatedly touted an obscure Australian biotech company to other members of the House.
Collins is the largest shareholder in that company, Innate Immunotherapeutics, which is working on an experimental treatment for secondary progressive multiple sclerosis.
And the Clarence Republican is clearly excited about that company, as The Hill, a respected Capitol Hill daily, reported that a half-dozen other House Republicans said they heard Collins touting Innate either in official settings or informal gatherings.
That's a potential problem for Collins – already the subject of an Office of Congressional Ethics probe – for two reasons.
One, a federal law prohibits lawmakers from investing in stocks in which they have inside information. And for another, there is a House rule that prohibits lawmakers from using their office for personal gain.
Democrats were quick to pounce. Rep. Louise M. Slaughter, D-Fairport, who wrote the law barring insider trading among lawmakers – led the way by sending letters seeking thorough investigations from the ethics office, the House Ethics Committee, the Securities and Exchange Commission and the acting U.S. attorney for the Southern District of New York.
"This pattern of activity on the part of Congressman Collins is consistent with my previously stated concerns that a member of Congress who is heavily invested in a for-profit company on which he also serves as a corporate board member creates a situation where insider trading and other improper behavior may occur," she wrote in the letter.
Slaughter, whose Rochester-based district neighbors the one Collins serves, went further in a statement, alleging that Collins and the five other House Republicans who invested in Innate probably broke the law.
"The story today is truly shocking and makes it clear that some members of Congress are embroiled in a major stock trading scandal that violates the public trust and likely the law," she said.
Collins denied any wrongdoing.
“As we have said before, Congressman Collins has followed all ethics rules and laws when it comes to his investments," said his spokesperson, Sarah B. Minkel. "As he would about the success of his children, he has never been shy about talking about the work of Innate Immunotherapeutics and its potential for a groundbreaking drug that treats advanced multiple sclerosis, a horrible disease that impacts millions of individuals."
The Buffalo News reported last month that the Office of Congressional Ethics is investigating Collins, and that investigators went to Buffalo to interview investors who bought shares in Innate after hearing about the company from the congressman.
A shareholder in Innate for more than 15 years, Collins twice last year increased his holdings by buying Innate stock through discount private stock offerings. Several prominent Buffalo-area investors also took part in those private stock offerings, as did then-Rep. Tom Price, R-Ga., now secretary of health and human services in the Trump administration.
Democrats railed against those stock purchases during Price's confirmation hearing, noting that at the time, Collins and Price were pushing legislation that would make it easier for companies such as Innate to conduct pre-clinical trials.
Thursday's story in the publication The Hill stated that Price was by no means the only member of Congress to hear Collins talking about Innate.
At a dinner with House GOP colleagues earlier this year, Collins said he previously suggested that lawmakers should buy stock in the company, The Hill reported in its story.
One Republican lawmaker told The Hill that Collins said he had made money for lawmakers, the newspaper reported. The publication did not name the sources in its report.
The Hill also reported that Collins met with another group of House Republicans last summer.
Collins reportedly told that group that they would make money by acting early, a lawmaker who was present at that meeting told The Hill.
Asked if Collins had boasted about helping his colleagues make money, that member of Congress said that sort of thing was heard, according to The Hill.
Collins, however, said that never happened.
“I never once talked about that. … I’ve never encouraged anyone to buy the stock. Ever,” he told The Hill in an interview, according to the publication.
Five other House members – Reps. Mike Conaway and John Culberson of Texas, Markwayne Mullin of Oklahoma, Doug Lamborn of Colorado and Billy Long of Missouri – have purchased shares in Innate.
Slaughter and other Democrats said Collins and perhaps other lawmakers may have purchased Innate stock with inside information about its prospects. That would violate the Stop Trading in Congressional Knowledge (STOCK) Act, which Slaughter pushed into law five years ago. It also would violate a House rule prohibiting lawmakers from using their office for personal gain.
“If it wasn’t bad enough that Chris Collins was pushing legislation to benefit a company that he’s the largest stockholder of, now we find out that he doubled down on this egregious offense by urging other members of Congress to join his money-making scheme," said Basil A. Smikle Jr., executive director of the New York State Democratic Committee.
But Minkel, Collins' spokesman, insisted he did nothing wrong.
“Louise Slaughter should read her own bill," she said. "The Congressman has retained legal counsel going back to when he was first elected to Congress to assist with compliance to House ethics and rules as it pertains to his investments and assets.”
Congressional ethics experts have raised questions about Collins' actions, however.
Asked about the reports that Collins had touted Innate to his colleagues, Meredith McGehee, strategic adviser at the nonpartisan Campaign Legal Center, said it appears Collins has had difficulty transitioning from the businessman he used to be to the public servant he is now.
Collins' personal financial disclosure form indicates his net worth could be as much as $66 million, so McGehee said Collins obviously didn't tout Innate because he needed the money.
Instead, she speculated that he did it because, as a businessman, he was accustomed to getting excited about money-making possibilities.
"This is a guy who is rich, who is used to bragging around the community" about his business ventures, McGehee said. "That being said, it seems clear when you look at this, that he kind of has not done a good job of understanding his role has changed."