HHS misused millions in health emergency funds over years, watchdog says

The U.S. Department of Health and Human Services building in Washington.

Caroline Brehman | CQ-Roll Call, Inc. | Getty Images

Federal officials at the Department of Health and Human Services raided funds from a little-known agency intended for vaccine research and emergency preparedness, spending millions to move furniture and pay unrelated salaries, according to a new report from a federal watchdog.

An office within HHS that oversees the Biomedical Advanced Research and Development Authority, or BARDA, “failed to account for” more than $500 million it used for administrative expenses between 2007 and 2016, according to a new report by the HHS Inspector General’s office, the agency’s investigative arm. HHS’ Office of the Assistant Secretary for Preparedness and Response funneled so much money from BARDA, which oversees the nation’s vaccine programs, to its own coffers “that there was a name for it within the agency: ‘Bank of BARDA,'” Special Counsel Henry J. Kerner said Wednesday in a letter to President Joe Biden.

As recently as 2019, federal officials at the preparedness office inappropriately took $25 million of the small agency’s research funding, the investigation found. The money was intended to finance emergency preparedness initiatives for public health threats like Ebola, Zika, and Covid-19.

The report does not specify a total amount of funding that was misappropriated, but the investigation details a sweeping misuse of funds that spans both the Trump and Obama administrations. The investigation also provides insight into factors that may have left a little-known, but powerful, biomedical research agency ill-prepared to effectively respond to the demands of the Covid-19 pandemic.

“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,” Kerner said in a statement. “Equally concerning is how widespread and well-known this practice appeared to be for nearly a decade, even garnering the nickname ‘Bank of BARDA.'”

Calling BARDA “a slush-fund for unrelated expenses,” Kerner urged Congress and HHS to “take immediate action” to tighten spending. The report concludes that federal officials at ASPR ”violated the Purpose Statute” and “potentially violated the Antideficiency Act.”

HHS has initiated its own internal review of the agency’s use of funds from 2015 through 2019 to identify potential Antideficiency Act violations, the Office of Special Counsel said. HHS has also tapped an unnamed outside accounting firm to audit the agency’s use of some funds, the watchdog said.

BARDA was thrust into the national spotlight in May, when then-director Rick Bright was abruptly removed from his position as the agency took center stage in the nation’s response to the pandemic. Bright filed a whistleblower complaint, alleging that he was ousted for resisting pressure to endorse hydroxychloroquine, an anti-malaria drug, as a Covid-19 treatment despite the lack of data supporting its effectiveness.

Former President Donald Trump hailed the drug as a treatment for the disease and pressured the Food and Drug Administration to rush an emergency approval. Research later found the drug did not yield a benefit and might even increase the risk of death in Covid-19 patients. The FDA later revoked its emergency use authorization for the drug.


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