Friday, January 27, 2012

The SIGA scandal: Calls for investigation mount By Michelle Malkin

 •  January 27, 2012 02:13 PM

Back in November, I spotlighted Obama’s half-billion-dollar crony drug deal involving a no-bid contract with politically-connected SIGA.

Refresher course here.

In November, Democrat Sen. Claire McCaskill — chair of the Senate Subcommittee on Contracting and Oversight and up for re-election in less than a year — asked HHS to review the contract.

Last week, the NYPost reported that SIGA execs dumped stock when they learned the contract would be far less than they anticipated last spring.

Today, GOP Rep. Renee Ellmers of North Carolina asked the HHS Inspector General to investigate:

“Yesterday afternoon I submitted my second letter to the Inspector General at the Department of Health and Human Services regarding apparent gross impropriety on behalf of the Obama Administration.”

“The more I investigate this deal, the more shocked I become at the potential corruption and insider influence taking place at the highest levels of our government. I cannot help but see the similarities between this case and the Solyndra scandal, since both involve rewarding companies tied to Obama donors, billions in taxpayer dollars, and insider dealing.”

“The decisions made by HHS have caused a legitimate small business in North Carolina to be denied a level playing field to provide smallpox treatments in the event of a national emergency. I will be very interested to see how the Administration explains their actions in awarding a billion-dollar corporation such a substantial contract when it falsely claimed to be a small business.”

Federal law requires that a certain amount of grants for this research and production be set aside for small businesses. In turn, small businesses will compete for these contracts and “grant awards” while convincing the government that their products will provide the most effective treatment and protections, at the lowest cost to the American taxpayer.

The two companies at the center of this – SIGA and Chimerix – competed for this award and submitted their own proposals for drugs to combat smallpox. SIGA’s small business status was challenged and the SBA ruled twice that they were “Other Than Small,” and therefore ineligible for a small business set-aside contract. But rather than acknowledging SBA’s decision, HHS pulled the small business set-aside and reissued the contract as a sole-source, non-compete to SIGA Corp. for $2.8 billion.

MacAndrews & Forbes Holdings, Inc. is a corporation wholly owned by Ronald Perelman, and TransTech Pharma, Inc. (a privately-held drug discovery company controlled by MacAndrews & Forbes). In November 2003, Perelman announced he would invest $10 million through MacAndrews and Forbes into SIGA Technologies – at the time a tiny biotech company that was developing oral drugs to prevent and treat diseases, including smallpox and anthrax.