After Months Of Questions, A Key Operation Warp Speed Adviser's Contract Emerges | Prairie Public Broadcasting

After Months Of Questions, A Key Operation Warp Speed Adviser's Contract Emerges

Oct 30, 2020
Originally published on November 2, 2020 11:43 am

The Department of Health and Human Services has released the contract of pharmaceutical industry veteran Moncef Slaoui, a key adviser to Operation Warp Speed, after questions from the press, members of Congress and advocacy groups.

Operation Warp Speed is the Trump administration's multibillion-dollar push to develop and manufacture hundreds of millions of doses of coronavirus vaccine. Slaoui has been instrumental in guiding the effort, but the terms of his employment raised concerns about potential conflicts of interest.

President Trump announced in May that Slaoui, former chairman for vaccines at GlaxoSmithKline, would be its chief scientist, calling him "one of the most respected men in the world in the production and, really, on the formulation of vaccines."

But Slaoui was brought on as a consultant instead of as a federal employee. Slaoui's consultant status means that he didn't have to go through the standard Office of Government Ethics process for federal employees, which involves signing ethics agreements, disclosure of financial holdings and divestiture of anything that might pose a conflict of interest. Importantly, this information is available to the public.

For his part, Slaoui defended his status and role in Operation Warp Speed, saying in an emailed statement to NPR:

"I accepted this role out of a commitment to public health and to helping our nation and the world control this deadly pandemic. Throughout my career I have always held myself to the highest ethical standards, and that has not changed upon my assumption of this role. HHS career ethics officers have determined my contractor status, divestitures and resignations have put me in compliance with the department's robust ethical standards."

While the gist of much of Slaoui's consulting agreement has emerged previously, the contract released to NPR lays things out in black and white.

The contract, dated effective May 18, showed that Slaoui had a financial interest in vaccine makers GlaxoSmithKline and Moderna. As a federal employee, he would have had to divest holdings such as those or recuse himself from decisions that pose a conflict. As a consultant, he had the option of keeping them.

He also sat on the corporate boards of Artizan Biotechnology, Clasado Biosciences, Lonza, Moderna and ViceBio Limited, the contract documents show. And he was an adviser to Brii Biosciences.

An HHS spokesperson said in an emailed statement that Slaoui resigned from his board seat at Moderna and divested his equity holdings in the company. He "committed to donate to cancer research all incremental value accrued from his Moderna shares between the evening of Thursday, May 14, prior to the announcement of his position on Operation Warp Speed and the time of sale."

Slaoui also "left all advisory boards and boards of directors of companies with even the appearance of conflict," the statement said. That includes the board of Lonza, a contract manufacturer helping Moderna make its vaccine, before Slaoui received any equity in the company, according to a Sept. 23 letter from HHS to Rep. James E. Clyburn, D-S.C.

As for his GlaxoSmithKline shares, the contract says if they accrue more value than the average of a pharmaceutical stock index during his time at Operation Warp Speed, he will donate the difference to the National Institutes of Health.

Slaoui has said his stock in GlaxoSmithKline, his former employer, is his retirement and declined to give it up. In late July, GlaxoSmithKline and Sanofi received a contract worth up to $2.1 billion from Operation Warp Speed for their collaborative effort on a COVID-19 vaccine.

An HHS spokesperson said Slaoui's expertise is "invaluable to the Board of Directors' decisions, but he does not commit the government to any financial obligations. Operation Warp Speed's investment decisions are recommended to, and approved by, the Operation Warp Speed Board of Directors (BoD) on a weekly basis. The BoD is composed of the Secretaries of HHS and DOD, in addition to White House COVID-19 Task Force personnel."

The conflict of interest section repeats protections first disclosed by the House Select Subcommittee on the Coronavirus Crisis, chaired by Clyburn, in late September when it got the information from HHS.

As for Slauoi's compensation, the contract obtained by NPR says he is paid $1,000, not $1, as has been previously reported. Additional covered expenses include reasonable food, lodging and "coach economy class" travel.

In response to a question about the discrepancy in pay, the HHS spokesperson said in a written statement:

"Although the agreement lists a lump sum of $1,000, Dr. Slaoui never intends to submit an invoice to [Advanced Decision Vectors, the outside firm administering his contract] for this lump sum. In the event that government contracting laws require ADV to deliver payment, Dr. Slaoui will donate the money to NIH for research, in accord with his previous statements of working for $1.00 salary. At this time, Dr. Slaoui has not received any payment in regards to this lump sum."

Despite the protections laid out in the contract and Slaoui's actions to minimize potential conflicts, Democratic lawmakers have criticized them as inadequate.

"Dr. Slaoui was hired as a contractor so that he could evade ethics laws and work on Operation Warp Speed without divesting from millions of dollars in financial conflicts," Sen. Elizabeth Warren, D-Mass., said in an emailed statement to NPR. "His meager salary is the tell that reveals how valuable and important it is for him to use this bogus contracting scam as a way to maintain those conflicts."

HHS sent NPR the contract after a request for comment on a set of letters from members of Congress, who were seeking the contract from the department.

Warren, Sen. Richard Blumenthal, D-Conn., and Reps. Pramila Jayapal, D-Wash., and Katie Porter, D-Calif., wrote to Slaoui on Thursday about the "unusual contractual arrangement," which they called " a blatant attempt to skirt federal ethics law."

In it, they said HHS downplayed Slaoui's role to justify his status as a contractor, citing a New York Times interview with Kara Swisher published on Oct. 5. When pressed about his role, Slaoui told Swisher, "I'm not a decision-maker. But of course, there is significant influence."

"This is a textbook case of a conflict of interest that could affect key decisions and damage OWS's scientific integrity and the race for a vaccine more broadly," the legislators wrote.

In his statement to NPR, Slaoui said:

"I have seen the letter from Senator Warren et al yesterday and appreciated the shared commitment to my being involved. I concur with the need to be transparent about potential conflicts of interests and I will provide information that addresses her questions. I have made the same commitment to Chairman Clyburn in our Tuesday, October 27th meeting."

Attorney Franklin Turner, a partner at McCarter & English who specializes in government contracts, said Slaoui's terms don't raise any red flags for him, though he noted that the statement of work section was quite short. "It's not entirely atypical to see something like this, particularly with respect to an individual with this man's level of expertise and knowledge in the field in light of the compressed time schedule," Turner said.

"On its own, this agreement contains the standard sorts of protections, the standard type of language that consultants to federal contracts have," he said, adding that this contracting mechanism was likely quicker than hiring Slaoui and putting him through the Office of Government Ethics' process.

Separately, Warren and Porter also wrote a letter to the inspector general for the General Services Administration, Carol Ochoa. They asked her office to investigate the contracting process, and whether Slaoui and others contracted through outside firm Advanced Decision Vectors are "acting consistent with federal law as a contractor, or whether they have been misclassified and should in fact be serving as federal employees."

Advanced Decision Vectors did not respond to NPR's request for comment.

In an emailed statement, Michael Bars, a White House spokesman, called the legislators' letters "false, politically motivated attacks." "With four vaccine trials in phase three and additional trials nearing this critical stage, we are grateful for Dr. Slaoui's invaluable contribution to ensure Americans have access to a safe and effective coronavirus vaccine and treatments as soon as possible."

You can contact NPR pharmaceuticals correspondent Sydney Lupkin at slupkin@npr.org.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

MARY LOUISE KELLY, HOST:

Operation Warp Speed - that is the federal program to try to deliver a coronavirus vaccine in record time. It's moving along. Front-runners are expected to submit their vaccine candidates to the Food and Drug Administration before the end of the year. But details about the employment of the program's chief scientific adviser, including possible conflicts of interest, those details have been hard to come by. NPR's pharmaceutical correspondent, Sydney Lupkin, got a copy of the adviser's contract, and she's here to tell us about it.

Hey there, Sydney.

SYDNEY LUPKIN, BYLINE: Hello.

KELLY: So this chief scientist, his name is Moncef Slaoui. I interviewed Dr. Slaoui here on the show last month. What are the concerns being raised?

LUPKIN: Moncef Slaoui is, of course, a pharmaceutical veteran who specializes in vaccines. In fact, he was once chairman for vaccines at GlaxoSmithKline, one of the companies now working on a coronavirus vaccine. If Slaoui was a government employee, he would have to go through a bunch of Office of Government Ethics steps - disclosures about his stock holdings, divestment of anything that might pose a conflict of interest, or he might have to recuse himself from certain decisions. What's more, all of this would be public.

That didn't quite happen here because Slaoui was brought on as a contractor and hired through a private firm working with the government.

KELLY: Right. And that - just that detail in and of itself, his being a contractor, that has been controversial.

LUPKIN: Mmm hmm. That's right. Senator Elizabeth Warren is among several Democratic legislators to question whether Slaoui should have been hired as a federal employee instead, given his key position. He said he doesn't make decisions, but he has a lot of influence. In a statement, he said he took on this role out of a commitment to public health and to helping control this deadly pandemic. He also affirmed his commitment to the highest ethical standards.

Details of Slaoui's contract have emerged slowly, but the full contract wasn't widely available, even though folks have been asking for it for months. HHS provided it to me last night.

KELLY: So what's in it? What can we learn from it?

LUPKIN: Well, even though it's been well-reported that Slaoui is only being paid $1 for his work, he's actually being paid $1,000. Same basic principle, though. It's a lump sum that's a lot less than what he'd be paid on a salary.

KELLY: Sure.

LUPKIN: The contract repeats some of what's already come out in news reports and from congressional oversight, but lays it out in black and white. It includes Slaoui's board memberships, including his role on vaccine front-runner Moderna's board. He's stepped down. It also includes stockholdings. Slaoui's held on to his GlaxoSmithKline stock, but agreed to donate profits during his time at Operation Warp Speed above a certain threshold.

We also learned that the scope of this work, as described in the contract, is really brief, which I'm told by a lawyer who works on government contracting isn't that abnormal. But Public Citizen's Craig Holman says it may be too vague.

CRAIG HOLMAN: You know, the contract itself doesn't actually explain what it is he's doing. And so that provides a lot of wiggle room for Moncef Slaoui.

LUPKIN: He says Slaoui shouldn't be a contractor because he holds such a key role in Operation Warp Speed.

KELLY: Well, what do his bosses in the Trump administration - what does HHS say about that?

LUPKIN: HHS says Slaoui's expertise is invaluable to Operation Warp Speed, but the actual investments are decided by a board of directors. That board includes the secretaries of the Department of Health and Human Services and the Department of Defense. It also includes members of the White House Coronavirus Task Force. And they also say - their agency ethics officers say Slaoui is in compliance with its standards thanks to the steps he's taken to disclose, divest and donate.

KELLY: That is NPR pharmaceutical correspondent Sydney Lupkin.

Thank you so much, Sydney.

LUPKIN: You bet. Transcript provided by NPR, Copyright NPR.