Fauci Awards Package (Redacted) — page 46

[T]he first instance in which Congress has made [federally chartered corporations] subject to the provisions of a general management law, and while the action may be supportable on public policy grounds, it does, to the extent of the applicable provisions, diminish the private character of the affected organizations. As such, it constitutes a precedent with implications. CSR Report at 7. FACA's partial application to NAS further supports viewing NAS as a different kind of corporate entity that is outside of the regulatory definition of "person." Therefore, if NAS is not a "person," NAS' non-person status extends to NAM, an entity established under NAS' charter. Consequently, the pending NIAID-NAS matters do not make a gift from NAM a prohibited gift for Dr. Fauci under the applicable regulations. In the alternative, if you find NAS to be a "person" under 2635.102(k), then you should not find it to be the same "person" as NAM. Even though NAM was established in 1970 under the charter of the National Academy of Sciences, the definition of "person" supports a finding that NAM is not a subsidiary of corporate parent NAS. The regulation explains that "for purposes of [Part 2635], a corporation will be deemed to control a subsidiary if it owns 50 percent or more of the subsidiary's voting securities." NAM does not issue voting securities, so NAS cannot control such securities; accordingly, NAM is not a subsidiary of NAS, but rather an independent entity. Furthermore, pursuant to NAM's Articles of Organization (AoO), adopted May 19, 2015 (copy attached), "the governance of [NAM] shall reside in the President and Council to be elected from among the membership," AoO Art. III, § 1, "NAM shall be solely responsible for the content of reports on projects that it undertakes, and such reports may be issued in its own name." AoO Art. VI, § 2. NAM's governing documents repeatedly show NAM's independence from NAS. Last, NAM's AoO gives it its own authority to establish awards. AoO Art. V. Thus, the Lienhard award and its associated cash prize are from NAM and NIAID's commissioned studies and other projects from NAS do not make the award an impermissible gift under section 2635.204(d). Finally, if NAS and NAM are a "person," then they are not persons who are substantially affected by the performance or nonperformance of Dr. Fauci's duties because both "compensation" in NAS' charter as well as "substantially" in section 2635.204(d) must have meaning. NAS' charter states: "[NAS] shall receive no compensation whatever for any services to the Government of the United States." This is consistent with NAS' status as a not-for-profit entity. NAS' charter was codified in Title 36 at Sections 150301-150304, and Section 150303 reiterates that NAS "may not receive compensation for services to the Government, but the actual expense of the investigation, examination, experimentation, and report shall be paid by the Government from an appropriation for that purpose." If the statutory language means that NAS cannot receive any compensation for its investigations, examinations, experiments or reports commissioned by Federal agencies, but rather only reimbursement of expenses, then NAS is not substantially affected by NIAID's projects. Furthermore, two of NIAID's projects with NAS were mandated by Congress. One project was started by another NIH Institute which NIAID later joined. Other collaborations were formed at the agency or department level, and not from the direct action of NIAID. Most importantly, every NAS project in which NIAID is involved is a large-scale project with numerous members. Being one of many means that NIAID's proportional contribution does not affect NAS substantially. For all of these reasons, Dr. Fauci would not be accepting an award from a person (NAS and/or NAM) who has interest that may be substantially affected by the performance or nonperformance of his official duties. For the reasons provided above, a finding should be made that Dr. Fauci may accept the Lienhard Award and the cash prize associated with it from NAM. If you have any questions, please contact Holli Beckerman Jaffe, cc'd above. Thank you for your consideration. With best wishes, Larry Lawrence A. Tabak, DDS, PhD Principal Deputy Director, NIH Deputy Ethics Counselor, NIH