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ImClone probe gets testier
Reps. Tauzin, Greenwood want assurances that their panel was not lied to.
August 22, 2002: 1:28 PM EDT

NEW YORK (CNN/Money) - Congress wants assurances that its probe into ImClone Systems involving the rejected application for the company's cancer drug, Erbitux, has not been obstructed by falsified information and destroyed documents.

The House Energy and Commerce Committee also expects to ask the Justice Department to charge former ImClone CEO Sam Waksal with perjury, according to committee spokesman Ken Johnson.

Two weeks ago, a federal grand jury indicted Samuel Waksal on several criminal felony counts. He pleaded not guilty to the charges, including the charge that Waksal had obstructed justice by directing individuals to destroy documents and computer files after he learned of an investigation into ImClone by the Securities and Exchange Commission.

A letter Monday from the committee to ImClone expresses concerns that ImClone and its former CEO "may have obstructed the committee's investigation by ordering or carrying out the destruction of certain records and documents."

Rep. Billy Tauzin, of Louisiana, and Rep. James Greenwood, of Pennsylvania, are asking for a series of company records and assurance from ImClone's current CEO, Harlan Waksal, that "no records or information responsive to any of the committee's requests were destroyed, altered, or withheld," according to a letter dated Monday.

Tauzin is head of the House Energy and Commerce Committee while Greenwood leads the House Subcommittee on Oversight and Investigations. ImClone said it will cooperate.

The congressional investigation stems from allegations that Samuel Waksal tried to sell ImClone shares ahead of a public announcement last December that the Food and Drug Administration refused to consider ImClone's application for Erbitux. ImClone (IMCL: Research, Estimates) shares, which fetched more than $60 in December, fell 98 cents to $8.26 on Monday.

"There is growing evidence that Sam Waksal lied to investigators," Johnson, the committee spokesman, told CNNfn.

Johnson said Samuel Waksal denied to committee investigators during an April 19 interview that he engaged in illegal insider trading or that he tipped anyone about non-public information regarding the company. "He said Aliza's (Waksal's daughter) stock was legitimate. That she needed the money to close on a new home," said Johnson.

Waksal's daughter is widely believed to have sold ImClone stock on her father's advice just prior to the announcement that the FDA had declined to consider the Erbitux application.

Martha Stewart, a friend of Waksal's, is also under a cloud of scrutiny. She sold ImClone shares ahead of the FDA announcement but says she was not acting on inside information.

Johnson said he expects Stewart to produce requested documents by Tuesday, though she could still be subpoenaed.

Monday's letter was addressed to Harlan Waksal, Samuel's brother.  Top of page




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