by Philip Blumel, President, U.S. Term Limits
U.S. Congressman Christopher Collins, who represents western New York near Buffalo, was arrested on Aug. 8, 2018 for insider trading. According to the Wall Street Journal, he was charged with a scheme “to sell the shares of an Australian biotechnology company before the public disclosure of a failed drug trial.”
Federal prosecutors in Manhattan accused Rep. Collins, 68 years old, of tipping off his son last summer about the results of a multiple-sclerosis drug trial completed by Innate Immunotherapeutics Ltd. , a biotechnology company based in Sydney. Rep. Collins was a member of Innate’s board of directors and one of the company’s largest shareholders, holding approximately 16.8% of its stock, the indictment said.
According to the indictment, Rep. Collins passed the confidential results to his son, Cameron Collins, so he could trade on the tip. Prosecutors say his son sold nearly 1.4 million Innate shares and gave the information to at least four individuals, including his fiancée and her father, Stephen Zarsky.
Mr. Zarsky then sold all of his Innate shares and shared the tip with at least three other individuals, including his brother and sister, before the public release of the trial results, according to the indictment.
The punch line of the Wall Street Journal report is its last paragraph: “The arrest of Rep. Collins will likely tighten his re-election campaign.”
Yeah, one would hope but I don’t know if you want to bet against him.
Collin’s campaign has all the hallmarks of a race in a non-term limited legislature against an entrenched incumbent. He won his previous elections with 72% and 67% in 2014 and 2016 against paper candidates and he didn’t face a challenger in this year’s primary.
This election, he is headed to the ballot in November to face a small-town city council member, Grand Island Town Supervisor Nate McMurray. Collins has $1.3 million in his campaign war chest compared to McMurray’s $81,772.
Collins will be the 25th sitting member of Congress to be indicted with a felony since 1987, according to the Buffalo-News. And if history is any indication, he might still be sitting in Congress after the election.
It wouldn’t be the first time an indicted sitting Congress member won re-election. In 2012, Rep. Michael Grimm – also a New York representative – won reelection while battling a 20-count indictment. He won, but never finished his term as he was found guilty and sent to prison for tax evasion.
Insider trading is nothing new in Washington. It seemed like everyone, from Congress members to the interns, was cashing in on non-public info obtained by the government prompting Congress, in 2012, to pass the STOCK (Stop Trading on Congressional Knowledge) Act.
An interesting side note: Attached to the senate version of the STOCK Act was an amendment by then Sen. Jim DeMint. DeMint’s amendment would have expressed the non-binding sense of the Senate that the Constitution ought to be amended to place limits on how long members of Congress can serve. It was soundly rejected in a 24-75 vote.