There’s a lot to this one so I’m pulling from a few sources. This is a case involving a doctor accused of defrauding the government and convicted of using foreign money to violate campaign contribution limits. BUT, the main thing this case demonstrates is the effectiveness of campaign contributions and lobbying at influencing elected officials, specifically for putting federal grants into the hands of the wrong people.
First, the current update on the case:
The Post and Courier: “After a 10-day trial, a federal jury in Charleston could not reach a verdict Friday on charges against Dr. Jian-Yun Dong related to the alleged fleecing of government funds, resulting in a mistrial. Now the government must decide whether to drop the case or retry him.
“Dong was accused of misusing $3.6 million in federal grant money intended for research for vaccines for the Ebola and Marburg viruses.”
The article notes that Dr. Dong was previously convicted of making illegal contributions to Senator Lindsey Graham, of which investigators say Graham had no knowledge. Fine, Graham didn’t know that he was breaking the law – but, he knew that they were raising money for his campaign and PAC, and, as laid out below, he acknowledges helping them with federal grants.
From the Center for Responsive Politics: “Dong then donated most of those funds [illegally solicited from a German national] through conduits — such as his estranged wife Dahner Wang, daughter Deanna and GenPhar employees — to Graham and his leadership PAC.
“The alleged illegal activity began after the couple contributed the legal maximums to the Graham during his 2008 re-election campaign. The couple had promised to raise $25,000 for the senator, a goal for which Dong relied on the German stockholder to meet.”
“The manner in which Dong and GenPhar secured this and other federal grants points to the persuasive power of political spending. The lobbying firm Dong hired to secure such grants was American Defense International, Inc., whose chairman, Vann Hipp, Jr., is a former chairman of the South Carolina Republican Party.”
“Dong is accused with using $3.6 million of that total on non-grant related purposes such as travel, construction of a new GenPhar facility and compensation for ADI’s $280,000 worth of lobbying expenses.”
“From 2004 to 2010, GenPhar received $19.6 million in federal grants from NIH and the military secured with help from Graham, according to the senator’s office. The money was focused on attempting to develop vaccines for use against the Ebola, Marburg and dengue viruses.
“In one example, Graham requested a $5 million earmark for GenPhar for a program to develop a vaccine against dengue fever. The company eventually received about $1.3 million in 2010, according to LegiStorm, which tracks earmarks.”
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