New anthrax vaccine sunk by lobbying

The selection of VaxGen, Grassley wrote, was "highly suspect." In his letter, dated Jan. 28, 2005, Grassley told the new secretary, Mike Leavitt, about "a number of troubling allegations" regarding the vaccine contract. Grassley suggested that HHS "acted prematurely" in awarding it to VaxGen. "Some have questioned the effectiveness" of VaxGen's product, he wrote, noting that the old vaccine "has been available for use in this country for several decades."

Nine weeks later, Grassley again wrote to Leavitt: "I remain greatly concerned that the department is not prepared to protect the American people from an anthrax attack."

Grassley also questioned the independence of Russell, the vaccine specialist who backed awarding the BioShield contract to VaxGen. Grassley claimed the former general had been involved in developing the vaccine years earlier with the Army.

Russell, who left the health department in late 2004, said he had no financial stake in the vaccine and no role in developing it.

"How do you confront a whisper campaign?" Russell asked. "The lobbyists have to earn their pay."

Boulanger's role in providing material to Grassley -- including language for the senator's January 2005 letter -- was described by people who said they had direct knowledge of his actions. Asked for comment, Boulanger said, "I'm not going to say anything about my private conversations with his [Grassley's] staff."

Emergent paid Boulanger's firm, Cassidy & Associates, $300,000 from 2004 to 2006.

A spokeswoman for Grassley, Jill Kozeny, said the senator's letters were "based on information from a number of sources."

Grassley's intervention hurt VaxGen on two fronts, company executives said:

Because of his reputation as a fiscal watchdog, his criticism sowed reticence about VaxGen within Congress and the administration. And the prospect of overcoming potent political opposition while trying to solve a tough scientific challenge weakened the resolve of VaxGen's major investors.

Emergent, meanwhile, broadened its connections to the White House by hiring Cesar V. Conda and Ron Christie as lobbyists. Both had been policy aides to Vice President Cheney, who championed Project BioShield.

According to people familiar with the lobbyists' conversations with lawmakers, Conda and Christie raised doubts about Simonson's handling of the vaccine contract, just as Hauer had.