WASHINGTON – Federal officials repeatedly raided a fund earmarked for biomedical research in the years leading up to the coronavirus pandemic, spending millions of dollars to pay for unrelated salaries, administrative expenses and even the cost of removing office furniture, according to the findings from an investigation into a whistleblower complaint shared with The Washington Post.
The investigation, conducted by the Health and Human Services Department’s inspector general and overseen by the Office of Special Counsel, focused on hundreds of millions of dollars intended for the development of vaccines, drugs and therapies by the Biomedical Advanced Research and Development Authority, or BARDA, an arm of the federal health department.
The unidentified whistleblower alleged that officials in the Office of the Assistant Secretary for Preparedness and Response at HHS, which oversaw the biomedical agency, wrongly dipped into the money set aside by Congress for development of lifesaving medicines, beginning in fiscal year 2010 and continuing through at least fiscal year 2019, spanning the Obama and Trump administrations.
The inspector general substantiated some of the whistleblower’s claims, finding that staffers referred to the agency as the “bank of BARDA” and told investigators that research and development funds were regularly used for unrelated projects, sometimes at “exorbitant” rates.
“I am deeply concerned about [the] apparent misuse of millions of dollars in funding meant for public health emergencies like the one our country is currently facing with the covid-19 pandemic,” special counsel Henry Kerner wrote in a letter to President Joe Biden on Wednesday. “Equally concerning is how widespread and well-known this practice appeared to be for nearly a decade.”
The inspector general concluded that the agency violated the Purpose Statute, a cornerstone of federal law designed to ensure that funds appropriated by Congress are used for their intended purpose.
Meanwhile, HHS is reviewing whether the spending irregularities violated the Antideficiency Act, another law governing the use of federal funds authorized by Congress. The health department also has engaged an accounting firm to conduct an audit, Kerner told Biden.
BARDA received national attention in May 2020 after then-director Rick Bright was abruptly removed from the office, supposedly because he resisted the Trump administration’s pressure to expedite unproven anti-malaria drugs as a treatment for covid-19, the illness that can be caused by the novel coronavirus. Colleagues said that Bright’s ouster was more complicated and that Trump administration officials had sought to remove him before the pandemic. The inspector general’s investigation, which began in 2018 after a whistleblower tip, mostly focuses on BARDA before Bright’s leadership and on funding decisions made during the Obama administration. The special counsel’s office is involved because it receives complaints from whistleblowers and protects them from reprisal as it investigates their disclosures of misconduct.
The report does not specify a total amount of funding that was misappropriated, though a spokesperson for the special counsel’s office said investigators are “confident” that the assistant secretary’s office wrongly repurposed millions of dollars in funds intended for biomedical research and development.
For instance, the inspector general flagged the assistant secretary’s office for not providing adequate details to Congress on how BARDA spent $517 million in “management and administrative” costs over a decade.
“Because there were no specific details outlining what the M&A costs supported, we cannot determine whether the expenditures supported the BARDA mission,” the report said.
Investigators also signaled their skepticism that all of the management and administrative funds went to their intended purpose, writing that the assistant secretary’s office “would likely fail” to adequately justify how the money was used.
The inspector general further found that between fiscal years 2013 and 2017, BARDA paid $897,491 for the salaries of staffers who did not work for the agency. Investigators also said the biomedical arm wrongly covered millions of dollars in other administrative costs, like having furniture removed from other parts of the building where its office was housed.
“That should not have been done using [research and development] funds as BARDA did not have their furniture removed,” one health department staffer acknowledged to an investigator, according to notes in the inspector general report, which does not specify a dollar amount for the furniture removal.