A major campaign contributor to Sen. Lindsay Graham (R-SC) allegedly defrauded the federal government out of at least $3.6 million that was supposed to be used to research vaccines to combat deadly diseases.
Jian-Yun “John” Dong, the president of the South Carolina-based biotechnology firm GenPhar, and his estranged wife are accused of making at least $31,000 in illegal campaign contributions to Graham and his political action committee. GenPhar was Graham’s sixth largest contributor between 2005 and 2010, with $46,269 in donations coming from GenPhar employees.
The indictments came down in April, but federal authorities didn’t unseal the charges until Monday. Federal prosecutors allege Dong took $30,000 from a German national and funneled that money to support Graham’s reelection. Graham’s treasurer said that they were cooperating with federal authorities.
“Campaign officials met with authorities in October 2010 and provided information pertinent to the investigation,” said Thad Westbrook, treasurer of Lindsey Graham for Senate and Fund for America’s Future. “Our campaign has and will continue to cooperate fully with the investigation.”
Most of the money Dong is accused of taking apparently came from a $4.2 million grant GenPhar received in 2005. The Post and Courier reports:
The indictment alleges that Dong and an unnamed co-defendant falsified grant applications, progress reports, time sheets and other documents sent to federal agencies. They then used federal money for construction costs, lobbying fees, and travel and personal expenses not allowed under the grant program, the indictment states.
Dong reportedly created another company, Vaxima Inc., to help him divert federal cash for his own use, authorities said.
The newspaper reports that Dong allegedly had a German shareholder in his company transfer $36,000 from an overseas bank account to him, his wife and a worker at the company. They allegedly routed their donations to Graham through their minor daughter, family members and GenPhar employees.
“This is your money at work,” Dong allegedly wrote in a Sept. 2007 email to his German investor, referring to obtaining government funds for a GenPhar project.
Graham was quoted in a press release touting one GenPhar grant.
“Once again, South Carolina is demonstrating that we are on the forefront of military technology,” Graham said in a statement related on the GenPhar website.
“Military facilities in South Carolina are the tip of the spear for our nation’s armed forces. I am proud to be from a state that is invaluable to America’s fighting force. We provide the human assets and support systems that make the U.S. military the world’s premier fighting force,” Graham said.
The lobbyist who sought the money for GenPhar was American Defense International, Inc. The former chairman of the South Carolina Republican Party, Van Hipp, Jr., now chairs ADI.
The indictment is embedded below.
