MORAN: Procured Loan From Schering-Plough Lobbyist
Rep. James Moran (D-Va.) received a "much-needed" $25,000 loan from Schering-Plough lobbyist Terry Lierman last summer, about the same time Congress was deciding whether or not to extend the patent on Schering-Plough's blockbuster allergy drug Claritin, the Washington Post reports. A promissory note dated June 25, 1999, shows that Lierman lent Moran $25,000 "with the option to borrow more" at the same 8% interest rate. Five days later, on June 30, Moran signed up to co-sponsor a bill to aid Schering-Plough in its quest to renew the Claritin patent. On July 23, 1999, Moran and fellow Rep. Ellen Tauscher (D-Calif.) "sent a letter to fellow New Democrats urging them" to support the bill. Lierman, who is currently battling Rep. Constance Morella (R-Md.) for a House seat, said he lent Moran the money "based solely on their long-standing friendship." Lierman said, "To draw any other conclusion would be malicious in any context." Moran agreed, stating that his support of the patent extension bill "had nothing to do with the loan," but stemmed from his conviction that Schering-Plough "deserved a patent extension because the drug's entry into the market had been delayed." Moran added, "Terry [Lierman] never really lobbied me on anything." The Post, however, reports Lierman as saying "that he 'probably did lobby Jim [Moran]' on the Claritin bill but that there was no connection to the loan." As for his influence in pushing for a patent extension for Claritin, Moran said yesterday, "There were a whole bunch of people bringing that up at the time ... I don't know how much influence I had."
Bankers, however, called the loan "unusual" because it has no maturity date and no provision for repayment of the principal sum, other than to say that Lierman may call in the loan at any time. They added that it would be "very unlikely" for Moran to get those terms at a bank. Moran said he "didn't even consider" going to a bank for a loan, but stated that he "did not think there was anything unusual" about the loan he obtained from Lierman. House rules mandate that Congress members may accept personal loans not made by a financial institution "provided that the loan is on commercially reasonable terms, including requirements for repayment and a reasonable rate of interest." At the time of the loan, the minimum rate for an unsecured personal loan in the Washington, D.C., area was 12.5%. The terms of Moran's loan required him to pay 8% interest on the principal.
Some question whether Moran's acceptance of the loan violated House rules which state that Congress members are forbidden to accept gifts in exchange for "being influenced in the performance of an official act." Congress members also are barred from soliciting money or "anything of value" from "any person who has interests before the House." Before entering into a loan arrangement with a person other than a financial institution, House members are instructed to contact the Committee on Standards of Official Conduct, which must issue a written determination on all gifts from friends valued over $250. Moran contacted the committee by letter three days after receiving the loan (Becker, Washington Post, 10/31).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.