Fifth member of Congress bought stock tied to fellow Congressman
Innate Immunotherapeutics, the tiny but controversial Australian biotech company with ties to Rep. Chris Collins (R-NY), has picked up another financial backer in Congress. On January 26, Rep. John Culberson (R-TX) purchased Innate stock worth between $1,001-$15,000, making him the fifth current member of Congress to follow Rep. Collins in investing in the company.
The purchase on January 26, 2017 came at the height of scrutiny of trading in the company by former congressman and now-Secretary of Health and Human Services Tom Price, though Rep. Culberson didn’t file the transaction report revealing the purchase with the Office of the Clerk of the House of Representatives until April 6, 2017.
In March, CREW reported that four other members of Congress – Mike Conaway (R-TX), Doug Lamborn (R-CO), Billy Long (R-MO), and Markwayne Mullin (R-OK) – had purchased Innate stock after Secretary Price’s purchase drew attention following his nomination. One of those members, Rep. Conaway, made an Innate purchase on the same date as Rep. Culberson.
Unlike Rep. Culberson, however, Rep. Conaway quickly disclosed the purchase, notifying the Office of the Clerk of the House within days. It is unknown why Rep. Culberson waited so long to disclose his investment in Innate.
Rep. Culberson did not report the purchase until April 6, well outside the 30-day period in which members are required to inform the Office of the Clerk of the House of stock sales or purchases. The deadline is 45 days if the trade was made through a broker and the member learned of it later.
The Texas congressman does not appear to be an experienced trader. The April 6 report with the Innate purchase was the first periodic transaction report he has ever filed. He also has limited investments in stocks. Aside from owning less than $15,000 in Apple shares, Rep. Culberson has held few assets in recent years, mainly rare minerals and military collectibles.
Purchases of Innate’s stock have been a point of controversy ever since it was revealed that Secretary Price had purchased between $50,001 and $100,000 of it last August in what has been called a “sweetheart deal.” During his confirmation hearings, several senators questioned if he used non-public information to trade health-related stocks, a potential violation of the STOCK Act if he did. They also questioned Rep. Collins’ role in encouraging him to invest in the company. Initially, Secretary Price said that all of his trades were initiated and executed by a broker, but later admitted he decided to invest in Innate after discussing the company with Rep. Collins.
Rep. Collins, who is Innate’s largest shareholder and sits on the company’s board of directors, was overheard by reporters in January speaking loudly into his cellphone in the House lobby, bragging about how many “millionaires” he had made in his hometown of Buffalo in recent months. In addition, after investing in Innate, Rep. Collins took legislative steps that would help the company, including authoring a clause in the 21st Century Cures Act that would accelerate Food and Drug Administration approval of certain drugs, a provision that could benefit Innate in the future.
Like his fellow Innate stock-owning colleagues, Rep. Culberson also supported the 21st Century Cures Act, as did a supermajority of the House. President Barack Obama signed the bill into law on December 13, 2016, a little over a month before Rep. Culberson made his Innate investment.