Extortion (43 page)

McDermott was not alone. Congressman Amo Houghton, Republican of New York, saw his investment portfolio mushroom with biodefense medical stocks in the weeks before Project Bioshield became law. His investment fund bought about $30,000 in Avant Immunotherapeutics (now called Celldex) on July 15, 16, 19, and 21, just days before President Bush signed the bill. The company was developing next-generation anthrax-fighting drugs and would do significant business through Project Bioshield. Houghton also gobbled up shares in Nanogen, a biomedical company, twice, on July 12 and 15. And he bought $17,355 in Northfield Labs on July 14 and another $16,792 the next day. Northfield was developing blood-replacement alternatives and would get grants from the U.S. Army through Bioshield. On July 15, Houghton bought almost $20,000 of Hollis-Eden Pharmaceuticals, which was developing disease management technologies. On the same day, he bought almost $35,000 in Maxim Pharmaceuticals, which produces antiviral drugs. The next day, July 16, he went back for more shares of Hollis-Eden, bringing his total holdings to almost $40,000.
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All of these companies would benefit from the infusion of federal dollars. If it’s possible to overdose on drugs and make money from it, that is what Houghton managed to do.
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Before he served in Congress, Houghton had a long career in corporate America as CEO of Corning and as a member of several corporate boards. If, as a corporate CEO, he had executed these trades based on insider information—concerning, say, a merger—it might have been problematic. It certainly would have received the attention of the SEC. But as a member of Congress, this sort of behavior is acceptable and commonplace.

We despise professional athletes who bet on their own games. Why don’t we feel the same way about politicians who bet on the outcome of legislation? The stakes are surely higher.

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About the Author

P
ETER
S
CHWEIZER
is the president of the Government Accountability Institute and the William J. Casey Fellow at the Hoover Institution at Stanford University. In 2008 and 2009 he served as a consultant to the White House Office of Presidential Speechwriting and is a former consultant to NBC News. He is the author of
Throw Them All Out
, which exposed congressional insider trading and prompted a
60 Minutes
investigation.
Slate
called it “the book that started the STOCK Act stampede.”