To counter the challenge posed by VaxGen, Emergent invested where it could buy immediate impact: lobbying.
"We had 500 employees who were about to lose their jobs, and we went out and became advocates for them," said Allen Shofe, a company vice president who managed its lobbyists.
In 2005, Emergent's yearly spending for lobbying nearly quadrupled, to $1.41 million. Last year it reached $2.1 million, federal records show. All told, from 2004 through June 2007, the company used 52 lobbyists at a cost of $5.29 million, the records show.
During the same period, VaxGen spent $720,000 on six lobbyists.
Emergent's lobbyists stressed a core message:
* U.S. civilians were at risk of death without an immediately expanded stockpile of anthrax vaccine;
* Emergent stood ready to supply the civilian stockpile, whereas VaxGen had yet to prove it could deliver a new product;
* Emergent might stop making the vaccine if the government chose not to buy its product for the stockpile.
The company enlisted friendly members of Congress and recruited a cadre of former government officials to press its attack. Among them was Jerome M. Hauer, a former acting assistant secretary for emergency preparedness at HHS.
Hauer had been in the thick of decisions to pursue a new anthrax vaccine. While at HHS, he told Emergent in a February 2003 letter that the department had concluded a new vaccine was "a better long-range option than investing in expanding manufacturing capacity" for BioThrax. Hauer wrote that "the scientific basis" for a genetically engineered vaccine was "very sound and will result in an improved product."
But after leaving the Bush administration in late 2003, Hauer did an about-face, delivering Emergent as a client to his new boss, the Fleishman-Hillard public relations and lobbying firm, according to company records and people familiar with the matter.
At a December 2004 biotech-industry conference, Hauer said the government should purchase more of the old vaccine. He also took aim at Simonson, the HHS lawyer, who had succeeded him as assistant secretary. Hauer said that Simonson should be stripped of his authority for his handling of the BioShield contract.
In June 2005, Emergent placed Hauer on its board of directors. In that year and 2006, Emergent paid $360,000 to Fleishman-Hillard, records show.
