Politics

Rep. Jim Clyburn says probe of federal vaccine deals will look into indications of 'insider stuff'

Key Points
  • "We see some things that indicate that there may be some insider stuff going on that's benefiting one or two people without regard to what we're really trying to do," Rep. Jim Clyburn told CNBC.
  • The South Carolina Democrat, who heads a House subcommittee on the coronavirus crisis response, launched an investigation into deals that the U.S. government struck with pharmaceutical companies developing Covid-19 vaccines.
  • Clyburn said the goal is to improve transparency behind Operation Warp Speed.
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Rep. Jim Clyburn is concerned about the transparency of Trump’s Operation Warp Speed

Rep. Jim Clyburn, D-S.C., Friday on CNBC hinted that there could be illegal activity behind the Trump administration's backing of a number of pharmaceutical companies' Covid-19 vaccine developments.

"We see some things that indicate that there may be some insider stuff going on that's benefiting one or two people without regard to what we're really trying to do," Clyburn, who is House Majority Whip, said in a "Closing Bell" interview.

Clyburn was speaking in his capacity as chairman of the House Select Subcommittee on the Coronavirus Crisis, a body that on Thursday launched an investigation into contracts issued by the federal government's Operation Warp Speed to boost vaccine research and have hundreds of millions of doses ready by early next year.

Operation Warp Speed is an entity under the Department of Health and Human Services.

"We need for all of these transactions to be out in the open," the South Carolina Democrat said. "People ought to see what is going on and who is doing it."

At center is Operation Warp Speed's Dr. Moncef Slaoui, the operation's head, who was appointed by President Donald Trump and has ties to two drugmakers whose potential Covid-19 vaccines have received funds from the program. The program plans to have 300 million doses of a Covid-19 vaccine ready for distribution by January 2021.

GlaxoSmithKline and Moderna, two pharmaceutical companies working on separate vaccine candidates, were granted up to $2.1 billion and $1.53 billion, respectively, for development and manufacturing purposes. GSK is working on a joint vaccine project with Sanofi.

Slaoui, who took a $1 salary to lead the federal vaccine initiative in May, resigned his seat on Moderna's board after being announced as chief scientist of Operation Warp Speed. Days later, he faced pressure to divest about $12.4 million worth of stock options in the company.

When asked about Slaoui's selling his interest in Moderna, Clyburn said the investigation intends to bring transparency to the transactions by the program.

Slaoui is also a former executive at GSK who led the British pharmaceutical company's vaccine arm. The subcommittee probe also questions Slaoui's ongoing stake in GSK. Slaoui, who worked at GSK for nearly three decades, declined to divest from the company, citing it as his retirement funds, according to The New York Times.

"We're looking at other things as well. We're not sure. We're saying maybe nothing is wrong at all, but let the sunshine in, and let's see exactly what it is," Clyburn said. "We are going to use the powers that we have to shine light on whatever is taking place, and maybe it's all on the up and up, but we've got a gut feeling that it may not be."

HHS did not immediately respond to CNBC's request for comment.

The public-private initiative has inked almost $11 billion in contracts with various drugmakers developing vaccines, including Johnson & Johnson, Pfizer and BioNTech, Sanofi and GlaxoSmithKline, Novavax and AstraZeneca, which is working with the University of Oxford.

"Open your transactions. Let people see what you're doing, and you will never hear from me. I'm doing what we're supposed to do," Clyburn said.

The investigation also names Health and Human Services Secretary Alex Azar and Advanced Decision Vectors CEO David Harris.

When asked if the investigation is an election-year ploy to cast doubt on Trump's coronavirus response, Clyburn cited the subcommittee's investigation into the controversial $765 million federal loan that Eastman Kodak was set to receive to produce drug ingredients to fight coronavirus.

The deal was held up after questions were raised about stock activity of executives and board members.

"Why did they put it on hold? Because we started asking questions, we started demanding some answers to some letters that we sent to them," Clyburn said, "and now it's on hold."

"I don't know of anybody who ever had a Kodak vaccine," he said.