President-elect Donald Trump鈥檚 Cabinet pick Tom Price counts among his top contributors a Georgia company and its聽CEO, who聽sent managers an email demanding donations 鈥淚MMEDIATELY鈥� to a political action committee聽supportive of聽GOP candidates and causes, according to documents reviewed by Kaiser Health News.
The PAC聽was operated by Georgia-based MiMedx, whose CEO Parker H. 鈥淧ete鈥� Petit is among the top individual contributors to Price, a Georgia congressman and Trump鈥檚 pick for Health and Human Services secretary. Federal campaign聽finance records show MiMedx, through its PAC, chief executive and his relatives, has contributed more than $40,000 to Price鈥檚 campaign and joint fundraising committees since 2014. With combined PAC and individual donations, the聽company聽was ranked as Price鈥檚 top contributor for 2015-2016 by the聽nonpartisan Center for Responsive Politics.
A spokesman for Trump鈥檚 transition said Price had no knowledge of 鈥渋nternal issues鈥� at MiMedx. He聽acknowledged that Price has helped the company, which is based in his congressional district,聽but said he gave it no special treatment.
鈥淒r. Price assisted MiMedx in navigating regulatory waters, just as he would for any constituent,鈥� said Phillip Blando, who did not elaborate聽on how Price helped the company.
Federal election law prohibits corporations from coercing employees to contribute to PACs.
The May 2015 email reviewed by KHN聽showed Petit demanding contributions from managers as the PAC was聽shaping its strategy with lawmakers.
鈥淚鈥檓 going to ask one more time for our field management to send something to our PAC. And, IMMEDIATELY,鈥� said the email聽sent under Petit鈥檚 name. 鈥淲e have PAC business to transact, and we need at least 50 donors to do so.鈥�
The same day the email was sent, text messages were sent out among some managers singling out certain employees who were expected to give.
MiMedx officials did not聽return calls or respond to detailed questions.
Experts in the law, who reviewed the email鈥檚 language at the request of KHN, said it could run afoul of legal restrictions on employer coercion.
The email arrived as Petit聽publicly pressed the Food and Drug Administration to change its stance on the regulation of聽MiMedx products, which could potentially affect the company鈥檚 bottom line or lead to a product recall. Petit, a prominent businessman聽in the Atlanta suburbs,聽served as a Trump campaign finance chair in Georgia.
Brett Kappel, a Washington, D.C. campaign finance lawyer who has represented both Democrats and Republicans, said Petit鈥檚 email would have to be reviewed by the Federal Election Commission for an official determination. But he said that 鈥渁 complaint could be filed with the FEC alleging illegal coercion.鈥�
In 2014, the MiMedx PAC was formed by the chief financial officer for the company, which makes controversial wound-healing products that are sold to Veterans Affairs hospitals or billed to Medicare. MiMedx聽聽it built a business with $247 million in聽revenue in 2016 and a 86 percent gross profit margin by salvaging discarded placentas, fashioning them into skin grafts, paste or injections and selling them to wound- and burn-care physicians, as well as podiatrists.
The PAC contributed to a number of Republican causes and other members of Congress,聽according to a review of public records. Data from the聽Center for Responsive Politics show it gave $40,000 to the Trump Victory Fund and $30,000 to the National Republican Senatorial Committee.
The FDA declined to say whether it heard from Price about聽the company or to answer questions about its review of MiMedx products.
Price is scheduled to appear Wednesday before a key Senate health committee, but his formal confirmation hearing before the Senate Finance Committee has not been scheduled. Price is among the Trump Cabinet picks targeted by Democrats, and in recent days he has come under attack聽for his 2016聽聽at a discount price in a small聽Australian company聽that wants FDA approval for its multiple sclerosis drug.
In a statement issued to ethics officials in preparation for his confirmation hearing, Price has promised to divest himself of stock and recuse himself on matters in which he may have had a direct financial interest. As for how he will handle ethical questions involving former campaign contributors, Blando said Price 鈥渨ill be providing those views at his upcoming Senate confirmation hearings.鈥�
Kappel said that the matter raises legitimate questions for Price. 鈥淎side from the fact that he received campaign contributions from the same company, as the head of HHS he鈥檚 going to have oversight over the FDA and he should have a view on what are inappropriate interactions between regulated companies and the agency.鈥�
In 2012, the FDA began to review whether liquefied tissue products made by MiMedx should be regulated more stringently.
A 2013 letter from the FDA questioning its products led to a decline in MiMedx鈥檚 stock price and to shareholder lawsuits. A case was settled in April for nearly $3 million.
The company continues to face uncertainty over 鈥渄raft guidance鈥� the FDA issued on tissue manipulation in 2015, potentially forcing the company to prove the effectiveness of its products or face tighter regulations.
The 聽its growing enterprise, which has received a small amount of business from the federal agency Price would oversee,聽caters to an estimated 6.5 million Americans with chronic wounds.
Seeking to soothe investors鈥� concerns, Petit described his positive relationships with members of Congress during an October 2015 , according to a transcript.
鈥淚 have been personally involved,鈥� he said. 鈥淚 have walked the halls of Congress. [I have] been to FDA. I鈥檝e [had] numerous conversations as well.鈥�
Two former managers in interviews with KHN聽said they felt pushed to contribute or to nudge their subordinates into giving money to the PAC. The former managers asked to remain anonymous for fear of retaliation from the company.
On the same day the聽May 2015 email was sent under Petit鈥檚 name,聽another executive聽sent his own email to聽subordinates.
鈥淪o who hasn鈥檛 donated?鈥� he wrote, according to a copy of the email reviewed by KHN.
Federal records show that dozens of company staffers make regular payroll-deduction contributions to the company PAC, ranging from $15 to $100 per week.
Experts said it鈥檚 unclear how the FEC would view MiMedx鈥檚 repeated requests to its employees.
鈥淚t鈥檚 clearly pressure. The legal question is whether it鈥檚 coercion,鈥� Kappel said. 鈥淭here鈥檚 a severe ideological split over what constitutes illegal pressure.鈥�
Ellen Weintraub, a Democrat who serves on the FEC, said she couldn鈥檛 comment on the MiMedx matter, but is troubled by this gray area and voted in favor of investigating whether another company, Murray Energy, improperly pushed workers to support its political fund in an unrelated case.
鈥淵ou go to work and you鈥檙e there to do the best job for your employer. You鈥檙e not there to support your boss鈥檚 political views,鈥� Weintraub said.
MiMedx has cited help from other lawmakers in its dealings with regulators.聽In the November 2015聽, Petit directed investors to a letter that Rep. Tim Murphy, a Pennsylvania Republican, sent to the FDA. Murphy 鈥� a psychologist 鈥� served with Price on the聽House GOP Doctors Caucus.聽There is no record of donations to Murphy from the聽MiMedx聽PAC.
Murphy, chairman of a House subcommittee on oversight and investigations,聽to the FDA聽outlining the woes of an unnamed company and pressed the FDA to answer聽questions about its use of 鈥渦ntitled letters鈥� to raise questions about products.聽The聽聽MiMedx such a letter in 2013.
Carly Atchison, a spokeswoman for Murphy, said lawmakers were raising concerns on behalf of 鈥渟takeholders鈥� who complained 鈥渁bout inconsistencies across FDA centers,鈥� an issue the agency she says later addressed. She declined to say whether the company referred to in the letter is MiMedx.
The company white paper also highlighted聽聽sent to then-FDA Commissioner Margaret Hamburg by several聽U.S. senators, who wrote to 鈥渆xpress serious concern鈥� about the agency鈥檚 use of draft guidance documents to explain policy. It did not name specific companies, but聽a聽MiMedx official 聽during an FDA hearing last year on the draft guidance filings.
One聽senator who signed the 2014聽聽was Georgia Republican Sen. Johnny Isakson, who will introduce Price at his confirmation hearing. Political funds benefiting Isakson since 2010 have received more than $47,000 from Petit, his family and the MiMedx PAC, campaign finance records show.
In the November 2015 white paper, MiMedx assured investors that 鈥渋t is clear there is significant interest by Senators and Congressmen鈥� in FDA regulations and 鈥渙f the potential dire impact of regulatory changes without proper oversight.鈥�
Isakson spokeswoman Amanda Maddox said聽the senator 鈥渉as a long history of advocating for Georgians and Georgia companies that are seeking information from the federal government.鈥� She did not elaborate or respond to detailed questions.
Elizabeth Lucas and Julie Rovner contributed to this report.