Obama, Perelman and Smallpox

[William Haskins]

WASHINGTON (CNN) -- A series of e-mail exchanges between officials at the Department of Health and Human Services shows growing alarm at the amount of projected profit from a government contract for a drug company whose controlling shareholder is a longtime Democratic Party activist.

Ronald Perelman is controlling shareholder of Siga Technologies and a longtime Democratic Party activist and fundraiser. He's also a large contributor to Republicans, but has been a particular friend of the Obama White House.

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But internal e-mails obtained exclusively by CNN show a contracting officer assigned to manage price negotiations between HHS and Siga was alarmed at the cost. Siga's return on investment, one e-mail said, was "an overwhelming 180 per cent."

The e-mail went on to say that margin "must be cut in half at a minimum" and later added: "I know you won't find a CO (Contracting Officer) in government who would sign a 3-digit profit percentage."

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A few weeks later, the CEO of Siga, Dr. Eric A. Rose, wrote to HHS, saying "it was clear that we were at an impasse in negotiations" and urging government officials to remove the existing contracting officer and replace him "with a more senior official." The assistant secretary for preparedness and response, Nicole Lurie, agreed. In a letter to Rose, she told him she had instructed her officials "to appoint our most senior procurement official as the final authority for this procurement." Shortly thereafter, the contract was signed.

http://www.cnn.com/2011/12/08/politi...act/index.html

[robeiae]

A couple of updates:

http://ellmers.house.gov/index.cfm?s...,49&itemid=662

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.

http://www.nypost.com/p/news/busines...D9LD7CHCp1rQeK

Executives at a New York biotech company controlled by billionaire Ron Perelman sold off large chunks of stock in the company last May, days after they learned a key $2.8 billion government contract could be in jeopardy, The Post has learned.

The May sale of shares by Siga Technologies Chief Scientific Officer Dennis Hruby and CEO Eric Rose netted them millions of dollars, government filings show.