GOP Senator Wants Justice Nominee to Explain Stake in Company
(Bloomberg) -- Senator Chuck Grassley, the top Republican on the Judiciary Committee, wants senior Department of Justice nominee Vanita Gupta to answer questions about her multimillion-dollar stake in U.S. chemical company Avantor.
Avantor Inc., whose board is chaired by Gupta’s father Rajiv Gupta, stopped all Mexican and Latin American sales of acetic anhydride, the only essential heroin chemical, after a Bloomberg Businessweek investigation last year found it was easily diverted for narcotics production. Mexico launched an investigation into the sale and distribution of the chemical after the Bloomberg report, but has not publicly named the company as a target.
Late Friday, Grassley cited Bloomberg’s reporting in submitting questions for the record to Gupta on her stake in the company, “especially in light of the diversion of its products in Mexico and her own previous statements on decriminalization of possession for all drugs,” said Taylor Foy, the senator’s spokesman.
Such a policy change would increase demand for heroin and methamphetamine, Grassley wrote, fueling the need for their chemical precursors. “Do you agree, then, that there is a potential undisclosed conflict of interest in your prior public advocacy for the decriminalization of heroin and methamphetamine possession because of the likely profit such a policy would allow a precursor-manufacturer like Avantor -- whose stock you hold -- to capture?”
In her Judiciary Committee hearing this week, Republicans challenged Gupta’s previous statements calling for decriminalizing the possession of small amounts of all drugs. Gupta, who would be the Justice Department’s No. 3 official if confirmed by the Senate, said she no longer holds that position. (She ran the department’s civil rights division under President Barack Obama.)
She holds from $11 million to $55 million in Avantor stock, mostly through family trusts, according to her financial disclosure statement. She told the Judiciary Committee she would divest from any individual stocks she controls. It’s unclear whether that includes her Avantor shares in trust.
Gupta said in an ethics agreement that, if confirmed, she won’t participate personally and substantially in any matters involving the company, unless she is authorized to do so. Also, because she owns stock in Avantor, she won’t participate personally and substantially in any matter that to her knowledge has a direct and predictable effect on the financial interests of the company, according to her agreement.
“Vanita Gupta has never had any role whatsoever with Avantor,” Andrew Bates, spokesperson for President Joe Biden’s transition, said in a statement. “As she emphasized in her confirmation hearing, she will divest from stocks she controls and fully recuse herself from any matters concerning the company. She would have no involvement in any issues related to the company if they were to arise. And she will respond directly to the senators on the committee.”
In his questions to Gupta, Grassley asked if she would agree to fully divest herself of Avantor stock, if confirmed, and “not to take any role in the enforcement of federal criminal drug laws as doing so may implicate or give the appearance of implicating a financial conflict of interest?”
Mexican authorities have declined to comment on the status of their probe of Avantor’s sales in the country. The U.S. Department of Justice declined to say whether it’s investigating those sales.
Avantor has declined to say whether the Justice Department has subpoenaed or otherwise notified the company of an investigation. The company has said it followed all applicable Mexican regulations and sold only to authorized buyers.
While sales of the chemical in Mexico represented a tiny fraction of Avantor’s billions of dollars in global sales, the amount diverted by drug cartels was capable of producing enormous quantities of heroin and methamphetamine.
“Out of an abundance of caution, due to the potential for misuse of acetic anhydride outside of the regulated supply chain, Avantor discontinued all sales of the product in Mexico and throughout Latin America,” Allison Hosak, a spokesperson for Avantor, said in a statement. “The company’s business in Mexico has been conducted in full compliance with applicable regulations.”
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Bloomberg previously reported that Avantor sold tons of acetic anhydride, the key compound for making heroin, through retailers and distributors across Mexico in 18-liter jugs. Each could make 20 pounds of pure “China white” heroin, or about 90,000 hits. Bloomberg reporters found crime-scene photos with Avantor’s chemicals at narco labs in Mexico’s top heroin-producing regions across the last decade.
The position that Gupta has been nominated for is not in charge of criminal matters, but prosecutors from the civil division are frequently engaged to work alongside their criminal-division colleagues in corporate investigations.
While senators of both parties voted this week to confirm Merrick Garland, Biden’s choice for attorney general, Republicans have zeroed in on Gupta for attacks.
The nominee, who would be the first woman of color to serve as associate attorney general, was attacked at her confirmation hearing by Republican Senator Ted Cruz for “extreme left political positions.”
But Gupta, who served at the Justice Department before becoming president and chief executive officer of the Leadership Conference on Civil and Human Rights, denied assertions that she favored defunding police. Her nomination has been endorsed by a number of major police organizations and conservative groups.
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