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Business ties ultimately spell doom for Collins' congressional career

WASHINGTON — Chris Collins rode into politics promising to use his business know-how to make government work better.

But what he knew about one business — and what he did with what he knew — brought an end to the Clarence Republican's career in Congress Monday, as he resigned from office less than halfway through his fourth term.

Collins' business ties also bought him a fateful date with a federal judge in Manhattan Tuesday afternoon, where the Clarence Republican is expected to plead guilty to federal charges tied to an insider trading scheme.

Collins, 69, will leave Congress about 14 months after federal prosecutors charged him with wire and securities fraud, conspiracy and lying to the FBI. His alleged accomplices in the insider trading scheme — his son Cameron Collins, 26, and Cameron Collins' prospective father-in-law, Stephen Zarsky — are expected to plead guilty to federal charges in a separate court appearance on Thursday.

Much remains uncertain about the Collins case, including the crimes to which he and his alleged co-conspirators will plead guilty. Then Collins and his co-defendants will likely have to wait before they receive their sentences. And New York's 27th congressional district, which connects several Buffalo suburbs with Rochester's via the countryside in between, will have to wait to see exactly when Gov. Andrew M. Cuomo schedules a special election to fill Collins' seat.

Also unknown is why a man who for more than a year has insisted he was innocent would now decide to plead guilty.

What's certain, though, is that a businessman and politician who has been a force in Western New York politics for a dozen years is no longer that.

Collins burst on the political scene in 2007, winning a surprise victory in his race for Erie County executive. A longtime entrepreneur who has run several companies, Collins won by vowing to run the county just like a business.

He kept his promise, cutting funding for libraries, cultural organizations and social programs with the zeal of a CEO with his eye on the bottom line.

He quickly wore out his welcome. Erie County voters ushered Collins out of county hall in the fall of 2011, electing Democrat Mark C. Poloncarz to replace him.

But Collins wasn't done — with politics or business. When Democrat Kathy Hochul, now New York's lieutenant governor, won an upset in a special election in the 27th district in 2011, Collins quickly surfaced as the GOP's likely candidate against her a year later.

Collins narrowly beat Hochul, and brought his unusual mix of politics and business with him as he went to Washington.

Unlike other businesspeople who win public office, Collins never set his business interests aside.

As he rose in stature in the House Republican Conference after being the first GOP lawmaker to endorse Donald Trump for president in 2016, Collins even brought his business interests to the floor of the House of Representatives. Then-Rep. Tom Price, a Georgia Republican nominated to be Trump's health secretary, told senators all about it at his confirmation hearing in early 2017. Price said Collins had given him a stock tip, that he really ought to buy shares of an Australian biotech called Innate Immunotherapeutics, where Collins served on the board. Price did just that.

Hearing Collins brag that Innate might be on the cusp of discovering a successful treatment for the most dreadful form of multiple sclerosis, several other members of Congress bought Innate stock, too. So did several prominent Buffalo-area businesspeople, and so did former Buffalo Sabres coach Lindy Ruff.

Innate's stock took a wild ride upward, rising 900 percent in the year ending Jan. 31, 2017. And Collins seemed proud of it all.

“Do you know how many millionaires I've made in Buffalo the past few months?” he was heard saying just off the House floor earlier that month.

It didn't last. By May 2017, The Buffalo News confirmed that the Office of Congressional Ethics was investigating Collins' relationship with Innate. Then-Rep. Louise M. Slaughter, a Fairport Democrat, had complained that Collins was mixing business with lawmaking, and congressional investigators set out to determine if it were true.

In late June of that year, Innate reported that trials of its multiple sclerosis drug — the company's only product — failed in clinical trials in Australia and New Zealand.

Collins got word of that via email from Innate's CEO while gathering with congressional colleagues for a picnic on the White House lawn. To hear prosecutors tell it, that's when he called his son with the bad news.

Cameron Collins started dumping his Innate shares the next day, before the public knew that stock was essentially worthless, shielding himself from $570,900 in losses in the process, prosecutors said. Zarsky, the father of Cameron's fiance, started dumping his shares, too, saving himself $143,900.

The Buffalo News noted an unusual trading pattern — marking possible insider trading — in a June 27, 2017 story that reported that the congressman had lost at least $5 million when Innate's stock price collapsed. Collins' office denied at the time that his son had sold any shares, but prosecutors found an ominous note from Collins to his press secretary commenting on The Buffalo News inquiries.

"We want this to go away," Collins said.

It didn't.

In October 2017, the Office of Congressional Ethics said it found "substantial reason to believe" that Collins violated federal law by touting Innate's stock based on inside information, while also possibly breaking House ethics rules by persuading National Institutes of Health officials to meet with an Innate staffer.

And 10 months after that, Collins got arrested. Innate's unusual stock trading pattern piqued the interest of the FBI, federal prosecutors and the Securities and Exchange Commission. Prosecutors filed criminal charges against Collins, his son and Zarsky, and the SEC hit them with civil charges.

Collins fought back hard. He said, again and again, he was innocent. He said the charges were "meritless." He dismissed Buffalo News stories as "fake news." He rode his campaign war chest to a narrow victory over Democrat Nate McMurray. Then he filled his Twitter feed with grip-and-grin photos that aimed to show him hard at work when in fact the scandal left him barred from serving on congressional committees.

Collins' hard-nosed tactics extended to the courtroom. He and his lawyers accused federal prosecutors of violating his rights under the Constitution's "Speech or Debate Clause," which aims to shield lawmaking from the prying eyes of presidents and prosecutors. And when Broderick, the judge in the case, rejected that argument in early September, Collins' lawyers quickly appealed.

All that changed suddenly Monday, with a nondescript filing in the court docket saying Collins wanted to change his plea.

Three weeks and five days after telling reporters "I look forward to being exonerated," Collins will enter his new plea at about 3 p.m. Tuesday in the Thurgood Marshall U.S. Courthouse in lower Manhattan.

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