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EXCLUSIVE: Obama nominee omitted ties to biotech

EXCLUSIVE:

President Obama's nominee at the Department of Homeland Security overseeing bioterrorism defense has served as a key adviser for a lobbying group funded by the pharmaceutical industry that has asked the government to spend more money for anthrax vaccines and biodefense research.

But Dr. Tara O'Toole, whose confirmation as undersecretary of science and technology is pending, never reported her involvement with the lobbying group called the Alliance for Biosecurity in a recent government ethics filing.

The alliance has spent more than $500,000 lobbying Congress and federal agencies -- including Homeland Security -- since 2005, congressional records show.

However, Homeland Security officials said Dr. O'Toole need not disclose her ties to the group on her government ethics form because the alliance is not incorporated: "There's no legal existence so she wouldn't have to disclose it," said Robert Coyle, an ethics official for the Department of Homeland Security.

Analysts say the lack of disclosure reflects a potential loophole in the policies for the Obama administration, which has boasted about its efforts to make government more transparent. They also question lobbying laws that allow such a group to spend hundreds of thousands of dollars without the public knowing exactly how much money each of the companies that belongs to the group contributes, though such arrangements are permitted under the law.

"You're not allowing the public to know the full background of this nominee," said Judy Nadler, a senior fellow at the Markkula Center for Applied Ethics at Santa Clara University in California. "It shouldn't matter whether it's incorporated or not."

Craig Holman, legislative director of the nonpartisan watchdog group Public Citizen, said the lack of disclosure "definitely and clearly runs counter to the intent of the law."

Ethics rules require nominees to report any paid or unpaid positions held outside of government, including but not limited to those of "officer, trustee, general partner, representative, employee or any consultant of any corporation, firm, partnership or other business enterprise ...." Dr. O'Toole signed a letter on behalf of the group sent to the White House as recently as March.

Dr. O'Toole declined to comment for this article. Her office referred questions to Mr. Coyle at Homeland Security and to officials for the Alliance for Biosecurity, who said the group is in "full compliance" with lobbying rules and noted that there were no financial ties between the Center for Biosecurity, where Dr. O'Toole is chief executive, and the lobbying group she help found.

In written testimony to Congress, Dr. O'Toole said the alliance was "created to protect the Center for Biosecurity's status as an honest broker between the biopharma companies and the U.S. government."

As undersecretary of science and technology, one of Dr. O'Toole's responsibilities would involve overseeing the department's chemical and biological division, which is in charge of making sure the nation is prepared to defend itself against chemical and biological attacks.

Dr. O'Toole was nominated less than four years after the alliance was formed in 2005. She has served as the group's unpaid strategic director and has signed her name on more than a dozen letters sent to Congress and federal agencies.

The group's letters to policymakers often seek more money for research and vaccines. She signed the letters as the group's strategic director, in addition to listing her full-time paid job as director of the Center for Biosecurity, which is affiliated with the University of Pittsburgh.

The letters, including one that Dr. O'Toole sent to House Speaker Nancy Pelosi, California Democrat, last fall, describe the Alliance for Biosecurity as a "collaboration" among the Center for Biosecurity of the University of Pittsburgh Medical Center, pharmaceutical companies and biotechnology companies "working to develop vaccines, medicines and other medical countermeasures for the nation's Strategic National Stockpile."

Members include companies such as Pfizer Inc., Sig Technologies and PharmAthene Inc. The group discloses the letters and list of members on a Web site.

But for all its lobbying and letters to Congress, the alliance isn't incorporated, it doesn't have a bank account and its day-to-day operations are overseen by the K Street lobbying arm of Drinker Biddle & Reath LLP, which also lobbies on behalf of the alliance, according to records and interviews.

The alliance's legal counsel, Anita Cicero, is also a Drinker Biddle lawyer who serves as a lobbyist for the group. In an e-mail response to questions about the alliance, Ms. Cicero said the group was formed to work "in the public interest to improve prevention and treatment of severe infectious diseases - particularly those diseases that present global security challenges in the 21st century."

Ms. Cicero described the lobbying activities as focusing on broad issues. "The overarching advocacy issues we address run across the industry, and we do not conduct lobbying activities to advance the commercial interests of any individual member company," she said.

Still, a review of the group's correspondence to federal lawmakers along with member companies' public disclosures to investors show that the lines between advocacy and commercial interests aren't always clear.

In an Oct. 31 letter to Mrs. Pelosi signed by Dr. O'Toole and two other alliance officials, the group called on Congress to include more than $900 million for the "advanced development of medical countermeasures" to be administered by the Biomedical Advanced Research and Development Authority.

The letter also was signed by the chief executive officer of member company PharmAthene, David Wright, who was one of the two first co-chairmen for the alliance after its creation in 2005.

Mr. Wright's company has a big financial interest in securing work from the authority, according to investor filings. A Securities and Exchange Commission filing last summer disclosed that PharmAthene has been trying to win a contract administered by the authority to supply 25 million doses of an anthrax vaccine to the national stockpile, which is overseen by the Department of Health and Human Services.

As undersecretary, Dr. O'Toole wouldn't be directly responsible for decisions on which vaccines to develop or buy. Still, she would oversee the government's threat assessments on the risks of bioagents.

Dr. O'Toole has told the Senate in written testimony that she would adhere to all ethics rule on conflicts of interests, but that because she has no financial interest in PharmAthene, she's not aware of any recusal requirements if she were to become involved in decisions concerning government funding for anthrax vaccine development.

Ethics groups say the alliance's setup is an example of what critics call "stealth lobbying," in which like-minded companies form a loosely knit compact and spend lots of money lobbying the government. The arrangement is legal, but it exposes loopholes that prevent the public from finding out how much money each company pays and whether one business exerts more control over the others.

Ms. Cicero said the group is complying with all applicable federal laws and that the alliance discloses on a Web site its membership list and correspondence to the White House, Congress and federal agencies. She said the companies pay a "pro rata" share to the Drinker Biddle & Reath firm.

"The alliance does not generate income, does not have a bank account and does not owe taxes," she said.

Ms. Cicero said the law firm "regularly convenes consortia of biopharma companies that share common goals or interests and provides secretarial and legal support for the groups." She said the alliance was formed so companies, academic institutions and the government could work together to "accelerate the development of therapeutic and vaccine countermeasures."

Ms. Cicero said Dr. O'Toole no longer has an active role as the strategic director for the alliance.

Another lobbying client of the firm, the International Pharmaceutical Aerosol Consortium, appears structured similarly. There are no records of any incorporation papers for that group, either. The group has a Web site listing several pharmaceutical companies as members, and Senate records show it has paid more than $250,000 to Drinker, Biddle & Reath since 2007.

Government watchdog groups acknowledge that the arrangement is legal but say it seems at odds with lobbying reform laws that were intended to shed more light on who bankrolls and controls special interest groups.

"At the end of the day, companies that form coalitions like this are being able to get around having to disclose the full breadth of who they are and what they're doing and what they're doing," said Dave Levinthal, a spokesman for the nonpartisan Center for Responsive Politics. "Does that cut against an open and transparent government? It appears that it does.

"Stealth lobbying has been taking place for years and despite the focus on the influence of lobbying, what's happening is that organizations are finding, if not loopholes, then ways around the spirit of the law," he said. "Companies that are lobbying Congress are not necessarily disclosing the full strength of their lobbying."

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