- The Washington Times - Wednesday, July 9, 2008

EXCLUSIVE: Former Veterans Affairs Secretary Anthony J. Principi contacted colleagues at his old agency as the chief lobbyist for drug maker Pfizer Inc. earlier this year, looking for updates on whether his company’s smoking-cessation drug Chantix would remain on the VA’s list of approved prescription drugs amid new warnings of dangerous side effects.

The government had just banned Chantix for use by pilots and air traffic controllers because of potential side effects on alertness and motor skills and had more broadly warned that the medicine could cause depression, suicidal thoughts and attempted suicide. Pfizer wanted insight on the VA’s intent for the drug, which has been prescribed to thousands of veterans.

Pfizer officials maintain that Mr. Principi’s contacts at his old agency did not amount to lobbying and that all he did was pass along requests via e-mail asking whether an internal study that examined 27 veterans hospitalized for psychotic episodes while taking Chantix would be made public.

E-mails reviewed by The Washington Times also reveal that Mr. Principi forwarded inquiries from Pfizer about Chantix’s status on the VA’s list of prescribed drugs, at one point stating, “I really hate to be a pain, but I keep getting asked these questions.”

Mr. Principi’s private work after serving as President Bush’s first VA secretary from 2001 though early 2005 provides what ethics analysts say is a textbook case of the “revolving door,” in which former Cabinet secretaries, powerful lawmakers and well-connected regulators land lucrative jobs helping corporate America influence federal policy and decisions by their former colleagues. The practice is legal, but frequently raises concerns about the appearance of conflicts of interest.



The Clinton administration addressed the issue with a sweeping order that banned top officials from lobbying the government until five years after they left public service for the private sector.

But President Clinton ended that five-year ban just before he left office, in January 2001. The Bush administration then reverted to the one-year ban that was enacted as part of the Ethics Reform Act of 1989. Congress in 2007 increased the waiting period to two years, but by that time it did not apply to Mr. Principi.

Mr. Principi declined to be quoted for this story, including answering whether he began interviewing for the Pfizer job while he was still VA secretary in 2004.

But his company’s dealings with the VA have taken on new importance as Congress investigates why the veterans agency took months to alert its patients about Chantix’s new side effects, such as suicide and psychosis, even when it knew veterans suffering from post-traumatic stress disorder (PTSD) were among those taking the drug.

The first hearings, prompted by a series of stories in The Times over the past month, is set to open today before the House Veterans’ Affairs Committee.

As one of his final acts as VA secretary, Mr. Principi signed an order eliminating co-payments for smoking-cessation counseling in December 2004. That was just months before he joined Pfizer, whose smoking-cessation drug Chantix was on the fast track for government approval. Mr. Principi’s order implemented the change while skipping the ordinary period that allows the public to comment on such proposals.

“The intended effect of this interim final rule is to increase participation in smoking cessation counseling by removing the copayment barrier … because this rule is beneficial to the public and is unlikely to generate adverse comments, we find that prior notice and opportunity to comment are unnecessary,” the regulation reads.

Pfizer officials, who also declined to be formally quoted in this story, said Mr. Principi did not know about the existence of Chantix or its status in the approval process when he signed the VA order. They added that his only contacts at the VA about the drug occurred this year, when he was “passing along” the inquiries. VA officials said they never submitted any of their internal findings about the smoking-cessation drug to Mr. Principi.

Today, more than 32,000 veterans have received prescriptions for Chantix, which produced revenues of more than $880 million in 2007, up from $101 million in 2006, the year the drug was first approved to go on the market.

Mr. Principi and 15 other lobbyists are registered as having lobbied Congress on dozens of laws, but no VA contacts are listed for Mr. Principi. In the lobbyist disclosure form for mid-year 2007, Mr. Principi and nine others are listed on one form as lobbying for eight specific pieces of legislation and “veterans healthcare issues.” Offices lobbied included the executive office of the president, the House, the Senate and the Food and Drug Administration.

In all, Mr. Principi’s government affairs team at Pfizer has reported spending at least $31 million on lobbying during his tenure as its chief lobbyist. In addition, a private company where Mr. Principi serves as executive chairman has won $140 million in contracts from the VA through competitive bidding.

Scott Amey, general counsel at the Project on Government Oversight and one of the authors of a 2005 report on revolving-door relationships in government, said that the laws aiming to prevent top administration officials from lobbying their former agency soon after leaving office have many loopholes.

“As people are leaving the administration, we have to be concerned whether people are going to be promoting new regulations or altering regulations that will benefit entities in the private interest,” Mr. Amey said.

Mr. Principi is hardly alone among former Bush administration officials who have received lucrative jobs in the private sector that involve lobbying or contacting their former colleagues.

For example, Christie Whitman served as Republican governor of New Jersey and then headed the Environmental Protection Agency (EPA) under Mr. Bush from 2001 to 2003. She subsequently founded the Whitman Strategy Group when she left office to advise businesses on environmental issues.

One of the group’s first clients was FMC Corp., a chemical company negotiating with the EPA over the cleanup of arsenic-contaminated soil at a factory near Buffalo, N.Y. The New York Department of Environmental Conservation listed the FMC site one of the state’s most-seriously contaminated sites, and FMC has been subject to 47 EPA enforcement actions.

Similarly, Edward C. “Pete” Aldridge Jr., undersecretary of defense for acquisition, technology and logistics at the Pentagon, left the agency in 2003 to join the board of Lockheed Martin, the Pentagon’s largest contractor.

Weeks before he left the Pentagon, Mr. Aldridge approved a $3 billion contract to build 20 Lockheed planes. That decision was made after he criticized the plan and threatened to cancel the contract.

While serving on the Lockheed board, Mr. Aldridge was picked in 2004 by Mr. Bush to chair the Commission on the Implementation of U.S. Space Exploration Policy - a decision that drew criticism only from Sen. John McCain of Arizona, now the presumptive Republican presidential nominee, who said Lockheed was one of NASA’s biggest contractors and called for Mr. Aldridge’s removal because of a conflict of interest.

Mr. McCain’s concerns went unheeded.

In addition to his work for Pfizer, Mr. Principi was employed by QTC Management, the largest government contractor for occupational health and injury or disability examinations, before he was named to the VA. He returned to the company after leaving the agency and now serves as its executive chairman.

QTC has won more than $140 million in competitively bid government contracts since 2007 to conduct disability medical examinations for the VA in Atlanta; Boston; Houston; Los Angeles; Muskogee, Okla.; Roanoke; Salt Lake City; San Diego; Seattle; and Winston-Salem, N.C. Pfizer officials said Mr. Principi had nothing to do with that company’s winning bids at VA.

Amy Fagan contributed to this report.

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