MORAN: Drug Company Loan Scandal Brings Fallout
The National Legal and Policy Center, a conservative legal group, filed a complaint yesterday with the Federal Election Commission alleging that Rep. James Moran (D-Va.) accepted an illegal campaign contribution when he took a $25,000 loan from former Schering-Plough lobbyist and current Democratic House candidate Terry Lierman. The complaint states that because Moran was a candidate when he received the loan, it "must be considered a campaign contribution and cannot exceed the $1,000 per election contribution limit," the Washington Post reports. "The Federal Election Campaign Act ... unequivocally treats personal loans to congressional candidates such as [the] one in this case as contributions," the complaint stated. Leslie Kerman, Moran's campaign committee attorney called the complaint "plain wrong." "Only if you are using the proceeds from the loan for campaign-related expenses is that triggered," Kerman said. Meanwhile, watchdog groups, such as the Congressional Accountability Project, are urging the U.S. Justice Department and the House ethics committee to investigate the loan. "Moran has the appearance of being a yo-yo on a string, especially because the loan can be called in at any time by this lobbyist," Charles Lewis, executive director for the Center for Public Integrity, said. Moran accepted the loan only five days before agreeing to co-sponsor a bill pushing for a patent extension for Schering-Plough's blockbuster allergy drug Claritin.
The front page of yesterday's Washington Post featured a story revealing details concerning the $25,000 loan made to Moran by Lierman, a Montgomery County Democrat running for election in Maryland against U.S. Rep. Constance Morella (R). The Post reports today that yesterday's story "created political fallout" in the races of Lierman and Moran, who is currently seeking reelection in Virginia's 8th District. Both Moran and Lierman "criticized the Post's story" and emphasized that the loan "had nothing to do with Moran's position on Claritin." "I woke up this morning and read the Post, and quite frankly I cried ... because the article was a stab at my family, friends and how I lived my life," Lierman said. Lierman also questioned the story's timing, stating that the loan was filed on a financial disclosure report 11 months ago. Moran also criticized the Post's coverage, stating, "What was not reported ... is the fact that 77 other members of the House, from both parties, co-sponsored the legislation." Moran yesterday released canceled checks revealing that he has made "regular payments" to Lierman; Moran has currently repaid $6,000 of the loan. Moran's former chief of staff and current campaign chair, Mame Reiley, said that she, not Moran, first approached Lierman about the loan after learning of Moran's financial difficulties. Republicans, however, have "pounced" on the loan, calling for Moran's resignation. "The honorable thing for him to do would be to resign. This is not a political issue; it's an ethical issue," Chair of the Fairfax County Republican Committee Joseph Underwood said. Demaris Miller, Moran's Republican challenger, said that the loan "at the very least showed poor judgment, but at worst it's another conflict of interest. ... [Moran] seems to believe that the rules that apply to others don't apply to him." Lierman's opponent Morella said of the loan, "If it's not illegal, it's certainly inappropriate" (Becker/Branigin, Washington Post, 11/1).
"Rep. Jim Moran was wrong to accept an unsecured, open-ended $25,000 loan from Schering-Plough Corp. lobbyist Terry Lierman and -- only days later -- enlist as a cosponsor of a bill to help that company preserve its monopoly on an allergy drug," a Washington Post editorial states. The piece continues, "Even if you accept the explanations of the two men that the deal was based solely on their longstanding personal friendship, it was inappropriate." The Post criticizes Moran for contacting the House ethics committee three days after procuring the loan and for reporting to the committee that it came from "an individual," without specifying that the individual was a lobbyist. "Why so late and so vague?" the Post asks, questioning whether there was solicitation involved between the two men. "These and other questions as to the conduct of both men beg for better answers than have yet been given," the editorial concludes (Washington Post, 11/1).
Terry Lierman is "mum on the stump" about his years of lobbying for the pharmaceutical industry, the Washington Post reports. In his campaign literature, Lierman calls himself a "businessman," without mentioning that he is the founder, president and controlling partner of Capitol Associates Inc., "one of the top-grossing lobbying firms on Capitol Hill," the Post reports. Though Lierman's professional history "has not been a prominent theme" in his campaign, his ties to the pharmaceutical industry garnered some attention following the recent Post article revealing a loan made between Lierman and Rep. Jim Moran (D-Va.) during Lierman's tenure as a Schering-Plough lobbyist. According to Lierman, Capitol Associates represents many groups and the pharmaceutical industry is not its main source of income. The 1999 lobbying list for Lierman's firm, however, includes pharmaceutical giants such as Schering-Plough, Glaxo Wellcome, Merck & Co., Pharmacia and Upjohn. Capitol Associates also lobbies for universities and groups dedicated to fighting disease, however, and Lierman said he is "especially proud" of his work lobbying for increased funding for uninsured AIDS patients and efforts to eliminate polio. However, Capitol Associates lobbied this year for Glaxo Wellcome on the Africa Free Trade bill, also supported by Morella, which aimed to get Congress to use trade policy to discourage African countries from importing or producing less costly generic versions of AIDS drugs. Lierman has also lobbied for tax breaks for pharmaceutical companies and limits on the distribution of generic drugs. Recently, he lobbied for a bill sponsored by his opponent Morella that would make it easier for drug companies to "license the fruits of government-funded research and technology" -- legislation consumer groups call "anticompetitive." Lierman said that he finished lobbying in November 1999 and has received no pay since then, although he still retains a 70% interest in Capitol Associates. Both Lierman and Morella have filled their campaign coffers with pharmaceutical cash, however -- the Center for Responsive Politics reports that drug companies and health product companies have contributed $22,500 to his campaign, while Morella has received $12,300 from the pharmaceutical industry (Becker, Washington Post, 11/1).