Cate Dyer this month received yet another letter from the Republican-led congressional panel that has been investigating her company, StemExpress, over the past year.
The Nov. 2 letter suggested that her company shredded documents in an effort to hide its business dealings, pointing to payments made to Shred-It U.S. appearing to begin in the middle of 2015, around the time Congress started probing StemExpress for its sales of fetal tissue to medical researchers.
“We are concerned by these payments and the apparent correlation to key dates in congressional inquiries,” the letter said.
Had the panel asked her to explain the payments, Dyer says she could have easily cleared it up. Like many other companies, StemExpress has always paid for paper-shredding services. The company has documents showing that before switching to Shred-It U.S. last year, it used a small nonprofit in El Dorado County, Calif., that supports people with disabilities and provides business services.
“They didn’t even bother to ask,” Dyer told the Washington Examiner. “I think they’re sloppy with what they’re doing, and it really does hurt their cause.”
StemExpress, a California company that supplies biomedical researchers with human blood, tissue and cells, is the main target of a special committee Republicans created in late 2015, dubbed the “Select Panel on Infant Lives.”
The panel stemmed from outrage over undercover videos by abortion foe David Daleiden showing how some Planned Parenthood clinics supplied aborted fetal tissue to StemExpress and other tissue companies.
The select panel was created to carry on the work started by three major House committees, Energy and Commerce, Oversight, and Judiciary, that did their own initial probes into whether Planned Parenthood, StemExpress or other companies illegally profited from the tissue or pressured pregnant women into providing it.
Dyer says she believes those immediate investigations were appropriate, given the graphic and disturbing content of the videos. At one point, she testified via webcast to the Energy and Commerce Committee.
“I can understand how they watched videos and said, ‘I want to talk to you,'” said Dyer, who is the founder and CEO of StemExpress.
But as Dyer reflects over the past year, she says the special panel has had a different aim, one bent toward proving that her company profited off fetal tissue even if the evidence pointed in a different direction.
“This committee is an entirely different beast,” Dyer said.
Chairwoman Marsha Blackburn, R-Tenn., hasn’t allowed Dyer or her director of procurement to testify before the panel, despite their offers to do so. A spokesman for the committee wouldn’t say whether there are plans to have Dyer testify before the panel expires at the end of the year.
Instead, Republicans voted in September to recommend that Dyer and her company be held in contempt of Congress, saying she failed to comply fully with two subpoenas.
The panel has collected more than 1,600 pages from StemExpress, including its records of every fetal tissue order in the last five years. The panel also has gotten the company’s bank records, which it is able to compare against StemExpress’s internal documents.
“They’ve pulled our bank statements, they’ve matched those checks to our accounting records, there’s no loophole,” Dyer said.
Yet Republicans insist StemExpress hasn’t complied with their requests for “accounting documents,” which could give broader information about the company’s overall business, not just the fetal tissue portion. They say they need more documents before they would hear personally from Dyer or her employees.
On the question of how much of StemExpress’s business involves fetal tissue, there’s a huge gap between what Dyer says and what Republicans say. According to Dyer, fetal tissue sales have always been a small portion of her business and currently comprise less than 1 percent. She says she’s given the panel documents showing that.
Yet Blackburn spokesman Mike Reynard said that when StemExpress started in 2010, the company dealt “100 percent with fetal tissue,” although he didn’t provide documents showing that when asked for proof. Instead, he said the panel has contracts between StemExpress and four Planned Parenthood clinics from the time.
Reynard also said the company hasn’t provided enough documents to show sales are as small as Dyer says.
“From the select panel’s perspective, ‘showing’ does not come from a representation provided by StemExpress’ Washington attorney,” Reynard said.
They have asked StemExpress for a swath of additional documents, including its balance sheets, tax returns and a detailed breakdown of all its expenses including salaries and benefits offered to employees. Dyer’s attorneys wrote in the spring that they would require another subpoena to hand over those materials.
Republicans also are irked at StemExpress for refusing to provide the names of its employees and redacting the names of some of its buyers and suppliers, citing concerns about their safety.
“StemExpress refused to produce many documents that were required by our lawfully issued subpoenas, which is why the panel voted to recommend they be held in contempt,” Reynard said.
Dyer says that information shouldn’t be necessary to determine if her company is profiting illegally. To her, the panel is just trying to create a “sense of legitimacy.”
“The panel doesn’t seem to have any intention of ending their agenda of pushing false claims,” Dyer said.
In its fixation on StemExpress, the special panel appears to have missed or passed by evidence that two companies that did business with Planned Parenthood may have broken the law.
Orange County announced in September that it is suing DaVinci Biosciences and its sister company, DV Biologics, accusing them of profiting off fetal tissue from Planned Parenthood. The two companies are barely mentioned in the congressional panel’s mid-year report issued in July.
Instead, much of the committee’s report tries hard to prove StemExpress profited off the sale of fetal tissue. Committee staff compared cost estimates produced by StemExpress with what it deemed “reasonable industry standards,” concluding that the company “may have made a profit” when procuring and transferring the tissue.
Prosecutors haven’t brought any charges against StemExpress, including in GOP-led states, even though the company does business all over the U.S.
And Republican leaders don’t seem eager to wade into the issue, either, especially as they plan to pass a bipartisan medical cures bill this week, laden with several other healthcare priorities including mental health reform. The measure, headed by House Energy and Commerce Chairman Fred Upton, R-Mich., and Rep. Diana DeGette, D-Colo., seeks to speed up new drug approvals by the Food and Drug Administration and direct new funding to medical research.
Democrats, who have accused Republicans of endangering medical research with their pursuit of StemExpress and other companies, likely would object strongly if Upton pursued that issue amid the cures bill effort. A committee spokeswoman said she didn’t know whether Upton plans to hold a full committee vote on holding Dyer in contempt of Congress.
While Democrats initially agreed the Daleiden videos raised some troubling questions, they have demanded the special panel cease what they call a “witch hunt” of biomedical companies. They most recently objected to a new $800,000 appropriation from Congress to cover the costs of running the panel, which brings its budget to nearly $1.6 million.
“If House leadership was focused on facts and fiscal responsibility, we would stop squandering funds on this select panel immediately,” said Rep. Suzan DelBene, D-Wash.
The special committee’s investigation of StemExpress is supposed to end in December, when it is expected to release a final report from its year-long probe before disbanding. Dyer says she would love to hear Republicans declare her company in the clear, but doesn’t expect it.
“I would personally, of course, love to see results that don’t seem likely to happen, which is for Upton to say ‘there’s nothing here, folks, we want to support research,'” Dyer said.
In the meantime, complying with the panel’s exact requests could be a logistical challenge for Dyer. In the Nov. 2 letter inquiring about the paper shredding payments, attorney March Bell gave her a deadline to respond.
It was Oct. 17.
