Millions Meant for Public Health Threats Were Diverted Elsewhere, Watchdog Says

WASHINGTON — A federal watchdog has found that the Biomedical Advanced Research and Development Authority, which drew national attention last year when the Trump administration fired its director, has been used for the past 10 years as a “slush fund” to cover expenses unrelated to its core mission of fighting health threats like Ebola, Zika and the coronavirus.

The 223-page report, issued Wednesday by the Office of Special Counsel, found that the Department of Health and Human Services diverted millions of taxpayer dollars intended for BARDA to finance vaccine research and pandemic preparedness into other government activities, and failed to inform Congress — a potential violation of federal law.

Among the unrelated activities were the removal of office furniture, administrative expenses, news subscriptions, legal services and the salaries of other department employees. The practice of diverting funds was so common, investigators found, that employees had a name for it: the “Bank of BARDA.”

The report focuses on the actions of the assistant secretary for preparedness and response, the health department official who oversees BARDA and is responsible for its budget. The assistant secretary is responsible for leading the federal response to pandemic threats like the novel coronavirus. Its most recent occupant was Dr. Robert Kadlec; President Biden has not named a successor.

“I am deeply concerned about ASPR’s 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,” Henry J. Kerner, the special counsel, wrote in a letter to Mr. Biden, using the acronym for the assistant secretary for preparedness and response.

“Equally concerning,” Mr. Kerner added, “is how widespread and well-known this practice appeared to be for nearly a decade.”

The report does not specifically say how much money was misappropriated. But roughly $25 million was taken from BARDA programs and provided to the assistant secretary’s office as recently as the 2019 fiscal year, the office found. And from the 2007 to 2016 fiscal years, the assistant secretary failed to account for $517.8 million in administrative expenditures, according to the report.

It also suggests a senator, Richard M. Burr, Republican of North Carolina, who wrote the legislation that created BARDA and is considered its champion in Congress, became involved in internal funding disputes. The whistle-blower told investigators that “restrictive wording” was added to the 2016 appropriations bill at the behest of Mr. Burr and his “pet project” — an apparent reference to BARDA.

A spokesman for the senator had no comment.

BARDA was created by Congress in 2006. Its mission is to finance novel research into vaccines, therapeutics, diagnostics and other “medical countermeasures” to combat natural and biodefense threats. It operated in relative obscurity until April, when Dr. Kadlec fired its director, Dr. Rick Bright.

Dr. Bright said then that he was removed from his post and reassigned to a narrower job at the National Institutes of Health after he pressed for rigorous vetting of hydroxychloroquine, an antimalaria drug embraced by President Donald J. Trump as a coronavirus treatment, and that the administration had put “politics and cronyism ahead of science.”

Days later, he filed a whistle-blower complaint with the Office of Special Counsel, an independent federal watchdog agency. He has since left the federal government, and most recently advised Mr. Biden on the coronavirus during the transition.

But the report issued Wednesday is not in response to Dr. Bright’s allegations. Rather, it covers both the Obama and Trump administrations, and grew out of an investigation into a 2018 complaint from an unnamed whistle-blower whose allegations primarily concerned Dr. Kadlec’s predecessor, Dr. Nicole Lurie. The whistle-blower accused Dr. Lurie of “reporting false information to Congress” in her monthly reports to lawyers.

Both Dr. Kadlec and Dr. Lurie have denied wrongdoing. In a brief interview Wednesday, Dr. Lurie said she had not been interviewed for the investigation. The findings were reported earlier by The Washington Post.

“We left the country stronger than we found it, including with a playbook for pandemics,” Dr. Lurie said of her time overseeing the agency. “All expenditures were done in a routine way and approved through multiple layers of rigorous budget processes. No expenditures were made unilaterally.”

In a statement, Mr. Kerner urged Congress and the health department to “take immediate actions to ensure funding for public health emergencies can no longer be used as a slush fund for unrelated expenses.”

The Department of Health and Human Services said in a statement that it would review how the assistant secretary had allocated money from the 2015 to 2019 fiscal years to determine whether any law had been violated.

A lawyer for Dr. Bright, Debra S. Katz, called the findings “an outrage.” While the special counsel said last spring that it had “reasonable grounds” to believe Dr. Bright’s removal was payback and called for his reinstatement, Ms. Katz said the investigation into his complaint was progressing slowly because the Trump administration had not cooperated. That complaint focused on Dr. Kadlec.

“These people used BARDA as their own piggy bank — both to steer contracts to their cronies and do whatever special projects they wanted, to the detriment of American’s public health and safety,” she said.