Ellmers Submits Letter to HHS on Potential Impropriety in

Awarding $2.8 Billion Small Business Contract to SIGA Corp. for Smallpox Treatments

WASHINGTON – Small Business Healthcare and Technology Subcommittee Chairwoman Renee Ellmers released the following statement from her office in Washington this morning:

"Yesterday afternoon I submitted my second letter to the Inspector General at the Department of Health and Human Services regarding apparent gross impropriety on behalf of the Obama Administration."

"The more I investigate this deal, the more shocked I become at the potential corruption and insider influence taking place at the highest levels of our government. I cannot help but see the similarities between this case and the Solyndra scandal, since both involve rewarding companies tied to Obama donors, billions in taxpayer dollars, and insider dealing."

"The decisions made by HHS have caused a legitimate small business in North Carolina to be denied a level playing field to provide smallpox treatments in the event of a national emergency.  I will be very interested to see how the Administration explains their actions in awarding a billion-dollar corporation such a substantial contract when it falsely claimed to be a small business."

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.

MacAndrews & Forbes Holdings, Inc. is a corporation wholly owned by Ronald Perelman, and TransTech Pharma, Inc. (a privately-held drug discovery company controlled by MacAndrews & Forbes). In November 2003, Perelman announced he would invest $10 million through MacAndrews and Forbes into SIGA Technologies - at the time a tiny biotech company that was developing oral drugs to prevent and treat diseases, including smallpox and anthrax.

Click Here to read Congresswoman Ellmers' Letter to HHS

Click Here to read Congresswoman Ellmers' December Letter to HHS

For background on this, please refer to this article by the LA Times:

"Cost, need questioned in $433-million smallpox drug deal"

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For more information, please visit Congresswoman Ellmers’ website at www.ellmers.house.gov or call (202) 225-4531.

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Tom Doheny

Press Secretary

Congresswoman Renee Ellmers R-NC-2

Washington, DC