The Annals of Crony Capitalism: Is Siga Technologies the New Solyndra?


What clueless OWS protesters should be saying

The Obama administration's crony capitalism Solyndra scandal just keeps on getting worse. Reason readers will recall Solyndra is the failed solar panel company that was showered with more than half a billion dollars in federal loan guarantees.

Yesterday, my colleague Tim Cavanaugh cited the Washington Post report that administration officials asked Solyndra executives to delay layoff announcements until after the Nov. 2, 2010 election. In fact, the layoffs were announced on Nov. 3rd. From the Post:

The Obama administration, which gave the solar company Solyndra a half-billion-dollar loan to help create jobs, asked the company to delay announcing it would lay off workers until after the hotly contested November 2010 midterm elections that imperiled Democratic control of Congress, newly released e-mails show.

The announcement could have been politically damaging because President Obama and others in the administration had held up Solyndra as a poster child of its clean-energy initiative, saying the company's new factory, built with the help of stimulus money, could create 1,000 jobs. Six months before the midterm elections, Obama visited Solyndra's California plant to praise its success, even though outside auditors had questioned whether the operation might collapse in debt.

As the contentious 2010 elections approached, Solyndra found itself foundering, and it warned the Energy Department that it would need an emergency cash infusion. A Solyndra investment adviser wrote in an Oct. 30, 2010, e-mail — without explaining the reason — that Energy Department officials were pushing "very hard" to delay making the layoffs public until the day after the elections.

The announcement ultimately was made on Nov. 3, 2010 — immediately following the Nov. 2 vote.


Now comes Siga Technologies. Earlier this week, the Los Angeles Times reported on a federal sweetheart deal given to that biotech company which is run by another big Obama campaign donor. As the L.A. Times explained: 

Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work.

Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world's richest men and a longtime Democratic Party donor.

When Siga complained that contracting specialists at the Department of Health and Human Services were resisting the company's financial demands, senior officials replaced the government's lead negotiator for the deal, interviews and documents show.

When Siga was in danger of losing its grip on the contract a year ago, the officials blocked other firms from competing.

Siga was awarded the final contract in May through a "sole-source" procurement in which it was the only company asked to submit a proposal. The contract calls for Siga to deliver 1.7 million doses of the drug for the nation's biodefense stockpile. The price of approximately $255 per dose is well above what the government's specialists had earlier said was reasonable, according to internal documents and interviews….

Negotiations over the price of the drug and Siga's profit margin were contentious. In an internal memo in March, Dr. Richard J. Hatchett, chief medical officer for HHS' biodefense preparedness unit, said Siga's projected profit at that point was 180%, which he called "outrageous."

In an email earlier the same day, a department colleague told Hatchett that no government contracting officer "would sign a 3 digit profit percentage."

In April, after Siga's chief executive, Dr. Eric A. Rose, complained in writing about the department's "approach to profit," [Dr. Nicole] Lurie [a presidential appointee who heads biodefense planning at Health and Human Services] assured him that the "most senior procurement official" would be taking over the negotiations.

"I trust this will be satisfactory to you," Lurie wrote Rose in a letter.

Very satisfactory indeed, one suspects. 

It should be noted that the contract with Siga is part of the $5.6 billion Project Bioshield adopted by the Bush administration. Project Bioshield was set up to guarantee a federal market for new chemical, biological, radiological, and nuclear medical countermeasures for the Strategic National Stockpile (SNS). The question is was it used specifically to guarantee the profits of an Obama crony? Stay tuned. 

One further note: The SNS already has 300 million doses of conventional smallpox vaccine costing $3 each and has ordered 20 million doses of a vaccine that could be given safely to immuno-compromised people. The conventional vaccine can prevent disease if administered within four days of exposure to the virus. 

NEXT: Gamers Help Fight AIDS

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  1. It’s different when Obama does it.

    1. For someone who allegedly ran on “change”, it’s fucking amazing how often his supporters say the equivalent of “Bush started it!”

      1. Asking for intellectual honesty from an Obamatron is like asking for taste from a juggalo. Basically, Obamatrons are the political equivalent of ICP fans. They’re Obaggalos.

      2. Well, in the case of the Energy loans, it was originally Bush’s bill that Obama voted for that started the program, even if the disbursements were corrupt.

        There was a major party Presidential candidate who had voted against the Energy Bill (and the Farm Bill), but he lost. Hence, no mandate for *that* kind of change.

  2. Chicago, USA.

  3. I thought we declared the world free of smallpox years ago. So we’re spending money on something that’s not supposed to exist anymore?

    I guess I’ll have no problem hitting up Obama for $50 million to fund my Dodo and Passenger Pigeon Repopulation project.

    1. The CDC and the Russian equivalent (called VEKTOR, how James Bond is that?) maintain a research program with smallpox. I say we should kill off the program and eradicate all the smallpox, but governments will never give up something that can kill that many people.

      1. Well, there are fears that the Russians modified the virus and shared (sold) the modified version with Syria. Don’t think anyone knows for sure. Any new vaccine would have to know exactly what the modification was to be effective though, so this is just another instance of crony capitalism from this administration.

        1. The Russians never sold WMDs to anyone. Mountain’s of Migs, tons of tanks, acres of AK47s, yes. Never a nuke or a germ. Russian geopolitical strategery is based almost entirely on realpolitik and stability. Giving WMDs to Third World shitholes leads to ghastly uncertainties, which is anathema to the Russian foreign policy establishment.

          1. One could argue that communism itself is a WMD.

          2. I am not going to trust allegedly “higher-level” concerns to stability and someone’s personal view of the Russian Gestalt over the profit motive.

            1. Britt is asking us to believe, not that it was never Russian policy to sell germs, but that not one single Russian ever sold germs.

              1. Didn’t say that. I do think the crazy huge Russian security apparatus has enough safeguards in place at the WMD sites to ensure security.

                1. Right! That’s why there are arrests for uranium smuggling three to four times a year somewhere in Eastern Europe.

                  1. Well there was that Moldovan thing a while back, but I’ve not heard of it happening quite so often as you’re describing.

                    Do you remember that white supremacist camp in Idaho where 5 of the 6 men on the leadership council were federal informants or agents? I imagine a similar situation exists in the black market for WMDs. For every terrorist group trying to buy a nuke there’s a government agent pretending to be a terrorist bidding against him.

          3. And how did the Syrians start their WMD programs? Tooth fairy?

            1. I mean, I’m sure someone in Syria studied chemistry, biology, or physics.

              Constructing a nuke is easy for a nation state. Getting your hands on the fissile material is the hard part.

          4. Except for the nuke reactor tech sold to Iran, but they are not a shit hole I guess.

            1. Well you know the Iranian nuclear program was started with US assistance way back in the 50s.

              The type the Russians sold Iran in the 90s is not a breeder reactor, it is designed for power generation and cannot be used to make plutonium.

              1. Siemens were building a reactor for the Shah until the revolution.

    2. Also anyone with a basic biology degree can reverse engineer the virus from existing pox (cowpox etc.) viruses. also, the funds to procure drugs like Siga’s were set aside when the program was created back in the early ’00s, so no new funds are being used.
      An antiviral is needed for several reasons… First, smallpox in its early stages mimics cold/flu-like symptoms, so by the time it is discovered that a person may have spread smallpox it would be to late to administer the vaccine. The vaccine only has a four day window for use after a person is exposed. Second, not every person can tolerate the vaccine. About 20 to 25 % of the population cannot be vaccinated due to health issues. I have eczema and cannot be vaccinated. Third, the vaccine itself is known to have serious side effects in those that are healthy. Interesting note is Siga’s product was used successfully in three cases where the vaccine caused serious illness. The CDC considers just one case of smallpox to be a national emergency and cleanup would be economically devastating. A good read n the subject is Demon in the Freezer by the same author of the Hot Zone. Yes, I am posting similar posts on various websites. I think some important facts are missing.

      1. Thank you for this post! Seriously, I have some background experience with this story and your comments are nice to see in an ocean of absurdity.

  4. We’re all Italians now.

  5. Oh my god. Solyndra is Green… people!

  6. And the media still worships Obama? Just makes me sick. Politicians and bureaucrats in general are just contemptible.

  7. It is my fondest hope, though it will probably not be realized, that Obama goes down, after being impeached, as the most corrupt President in US history.

    This shit is just getting beyond ridiculous.

    1. It is my fondest hope, though it will probably not be realized, that Obama goes down, after being impeached, as the most corrupt President in US history.

      Well, until the next one, anyway.

      1. You have to start somewhere.

    2. Impeachment is an archaic thing, like the Queen of England having veto power over the choice of Prime Minister.

      1. And yet, after each election in England that results in a new Prime Minister, said PM-elect must go before the queen and beg permission to form a new government.

        And she could say “no”.

        1. If she did that, I hope English people would throw her fat ass in the river. But I don’t think they would because they’re pussies.

          1. Are you kidding? The Queen telling the PM to fuck off would be awesome. I would want her as our Queen again.

            1. Okay, maybe if we’re talking about the shit that English people do elect, if the queen (shouldn’t capitalize that) actually gave a shit about freedom, that would be alright. But as a principle of people not being ruled (which Englishmen do seem to love their lives being controlled), the queen rejecting them would suck.

            2. New PM: I humbly beseech thee your majestity, with all due deference and exaultations, to be allowed to form a new cabinet.

              Queen: Well that depends Lord ____, are you willing to give the royal carpet a royal scrubbing?

              New PM: I beg your pardon your majesty?

              Queen: Give me royal knickers a lick!

              New PM: Your majesty that I shall not abide by!

              Queen: A shame…then no cabinet and goverment for you.

      2. You have to start somewhere.

        Only two Presidents have been impeached. Both were acquitted. Nothing else happened.

    3. Think about Epi. These people are from Chicago. And they had access to 800 billion dollars in stimulus. And they had access to it for two years while controlling congress and the mainstream media. If people look hard enough, there could be a Solyandra a week from now until the election.

      I first came into the civilina side of the government in 2007. There was a real sense of fear among the Bush people about Congress and the media. They didn’t like either one. But they feared being called to the carpet by either. That is really how shit gets done in Washington. Most of the time the bureacracy sort of moves at its own pace and doesn’t really give a shit. But when Congres or the media gets upset, things tend to move a lot quicker. When the Obama came in they owned everything. So that sense of fear was gone. For example, no way would the Bush people so quickly put out the nudie scanners. They knew the media and congress would have fried them over it. But who, at least in 2009 and 10, was going to hold the Obama people to the carpet? Instapundit? Given the amount of arrogance, culture of corruption these people came from, and the complete lack of acountability, I can’t imagine how bad the full truth really is.

  8. Mildly ironic (re the eagle/vulture graphic) is that bald eagles are often thieves who use their size and power to steal prey from weaker birds while vultures search great distances to find and scavenge nutritive value. Eagles are also known to scavenge carrion and steal human food from garbage and picnic sites.

    But I suppose it’s a more evocative image. Vultures are just so damned ugly.

    1. That is why Franklin wanted the national symbol to be the turkey.

      1. I like his rattlesnake letter better.

        “She never begins an attack, nor, when once engaged, ever surrenders: She is therefore an emblem of magnanimity and true courage.”

      2. Really, it should be the Honey Badger. I mean no other animal describes America better.

  9. I was listening to Diane Rehm today to get my fix of pulling my hair out. They were talking about the OWS movement. Along with all the usual Marxist type palaver, there were actually several libertarian type inputs with respect to capitalism vs crony capitalism and the misdirection of the sentiments of the movement. It was actually pretty astonishing. Not that any of it sunk in with Diane and several of her other guests.

  10. “Over the last year, the Obama administration has aggressively pushed a $433-million plan to buy an experimental smallpox drug, despite uncertainty over whether it is needed or will work.”.

    “Senior officials have taken unusual steps to secure the contract for New York-based Siga Technologies Inc., whose controlling shareholder is billionaire Ronald O. Perelman, one of the world’s richest men and a longtime Democratic Party donor.”.

    doesn’t this sound like the solyndra issue all over again? obama, the administration, the democratic party, and the main stream media can lie or overlook anything. the end justifies the means. also, every liberal who looks the other way is just as guilty.

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