On December 30, leaders of the House and Senate Armed Services committees announced the selection of former Google CEO Eric Schmidt and 11 others to join a newly formed federal commission on biotechnology.
The National Security Commission on Emerging Biotechnology, tasked with evaluating the biotech industry and recommending investments to enhance U.S. security, is anticipated to wield significant influence over policy and federal spending in this advanced sector.
Notably, commission members are not required to divest their personal biotech investments despite their role in shaping U.S. industry oversight. Schmidt, through his venture capital firm First Spark Ventures, holds stakes in multiple biotech companies, potentially positioning himself to benefit financially from increased federal biotech investments.
A source familiar with Schmidt’s stance, speaking on January 19, indicated that Schmidt would not participate in the selection or monitoring of federal investments in the sector, nor in decision-making regarding First Spark’s investments. The source affirmed Schmidt’s commitment to complying with all disclosure requirements.
Following discussions about potential conflicts of interest, Schmidt announced on January 25 that he plans to donate 100% of the “net profits” from his First Spark investments to charity. The timing of this decision and the specific charities to benefit have yet to be disclosed.
Walter Shaub, former director of the U.S. Office of Government Ethics, expressed concerns about the commission, noting the lack of adequate safeguards against conflicts of interest. He emphasized that commission members are exempt from criminal conflict of interest laws that might otherwise require recusal or divestment due to its congressional establishment.
In response, a spokesperson for the Senate Armed Services Committee, which oversees the commission, assured that Schmidt and other members were chosen by bipartisan leaders and are expected to adhere strictly to government ethics policies.
They emphasized that the commission itself is structured to prevent undue influence, with congressional oversight throughout its tenure.
Dr. Jason Kelly, appointed chairman of the commission, intends to retain his CEO role at Boston-based biotech firm Ginkgo Bioworks, specializing in genetic engineering.
His spokesperson underscored that Kelly serves on the commission in a personal capacity and did not specify plans regarding potential equity divestment from Ginkgo Bioworks.
The decision by Schmidt to donate his First Spark profits was portrayed by his representative as a reflection of his philanthropic motivations. However, Shaub argued that such a gesture does not resolve the fundamental conflict of interest issue inherent in financial involvement with government policy decisions.
The Pentagon has already committed substantial investments in biotechnology, including a recent announcement of $1 billion over five years to bolster bioindustrial domestic manufacturing infrastructure.
The new federal commission is expected to play a pivotal role in guiding such investments during its anticipated two-year term.
Schmidt’s involvement in influential Washington commissions is not new; previously, concerns were raised over his investments in artificial intelligence while chairing a federal AI commission from 2018 to 2021. Despite criticisms, there was no evidence of ethical breaches or illegal conduct related to these investments.
Schmidt co-founded First Spark in 2021, focusing its investments heavily within the biotech sector, including companies like Walking Fish Technologies, Vitara Biomedical, and Valitor.
Efforts to reach First Spark officials for comment via LinkedIn were unsuccessful, as the firm does not publicly list contact information on its website.
Representative Ro Khanna, also appointed to the commission, indicated through a spokesperson that he does not hold individual stocks, and his wife’s assets are managed in a diversified trust, which is designed to mitigate conflicts of interest.
Dawn Meyerriecks, former deputy director of the CIA for Science and Technology and a commission member, stated via LinkedIn that the commission’s setup is still in progress.
She affirmed that all commissioners will comply with required disclosure forms and work closely with government ethics counsel to address any potential conflicts related to the commission’s expected work.
