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Isakson aided MiMedx in its frustrations with VA

Parker “Pete” Petit was in a bind.

One of his biopharma company’s top customers, the Department of Veterans Affairs, in 2016 was looking to cut down on purchases, and the Atlanta VA had started scaling back on products from MiMedx, calling them costly and unproven, according to a Tuesday report in The Wall Street Journal.

So Petit turned to long-time friend Sen. Johnny Isakson, R-Georgia, who chairs the Senate’s Veterans Affairs committee, to help Marietta-based MiMedx get its way.

Later, Petit told his top brass that his friend had come through, according to an internal email obtained by The Atlanta Journal-Constitution.

“We have done everything,” Petit wrote in a July 2016 email to company executives, “in terms of talking with the individual in the VA office who sent out this directive to having our Senator make some phone calls to find out what had gone wrong.

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“After those initiatives,” Petit continued, “I believe things for MiMedx will stabilize, and we will not be fighting those battles any longer.”

U.S. Sen. Johnny Isakson and former MiMedx chief Parker “Pete” Petit have been friends for decades. ASSOCIATED PRESS

Now, questions are being raised about how much help Isakson provided and whether it prompted the VA to resume using the products.

The company is facing accusations that it inflated sales figures and boosted stock prices by flooding VA facilities with products — a practice known as channel stuffing. VA healthcare workers also have been forced out of jobs, and some criminally charged, after allegations of improprieties involving MiMedx products.

The company, once ranked the fifth-fastest growing public company by Fortune magazine, is under investigation by multiple federal agencies, faces stockholder lawsuits and recently was delisted by Nasdaq.

Petit, through his attorney, declined to comment Wednesday.

Isakson did not comment. However, a spokeswoman for the senator, Amanda Maddox, confirmed that Petit complained to Isakson about the VA’s new processes during a meeting at the senator’s Washington office. Isakson then asked a staffer for the VA committee, who reports to the senator as chairman, to look into it, Maddox said.

The staffer then received a briefing from a Washington-based VA representative in May 2016, Maddox said. Isakson was apparently satisfied, she said.

“There was no other communication with the VA about the issue after that briefing,” the spokeswoman said in an email, “so it is safe to assume that after this conversation took place, that was the end of it.”

There was no further follow-up, Maddox said.

MiMedx’s former chairman and CEO, Parker “Pete” Petit, resigned in July amid an internal investigation and an external audit by Ernst & Young, which has since resigned as auditor. SPECIAL (The Atlanta Journal-Constitution)

She also said that Isakson did not recall making the phone calls described in Petit’s email.

The Wall Street Journal article implies the inquiry had put the Atlanta VA on notice. The story describes internal VA documents where officials talk about responding to the congressional inquiry and reference Isakson’s personal relationship with Petit.

Maddox said that was not the intent. “In fact, in the inquiry, we did not mention Atlanta or MiMedx. We just said we received a complaint from a vendor.”

Petit has always boasted about his lofty political connections. He served as President Trump’s campaign finance chairman in Georgia, has been friends with Isakson for decades and has a close relationship with another Georgia politician, former Rep. Tom Price who also briefly served as secretary of Health and Human Services for the Trump administration.

Petit has contributed to both Isakson and Price and helped raise money for their campaigns. 

The Journal article said Price also tried to helped MiMedx, sending letters to executives for 11 insurance companies in urging them to cover MiMedx products in what was dubbed “The Price Campaign” by MiMedx insiders.

Price told the Journal he didn’t recall writing the letters, which said their denial of coverage on the product EpiFix was probably an oversight, and the newspaper said it couldn’t determine if the letters helped persuade the companies to cover the product.

The AJC could not reach Price for comment.

Ryan Alexander, president of the Washington-based budget watchdog group Taxpayers for Common Sense, said members of Congress often make inquiries on behalf of corporate constituents with federal agencies. If Isakson made phone calls on the company’s behalf, as Petit’s email suggests, that would be an unusual show of favoritism, but not if he only had a staffer look into it.

“The question is, did he go farther than that?” Alexander said.

Petit resigned from MiMedx in July, but his departure was later designated as “for cause.” A company news release that Petit, the ex-COO, the ex-CFO and a former controller/treasurer all “engaged in, among other things, conduct detrimental to the business or reputation of the company.”

The AJC obtained Petit’s internal email this summer. The newspaper then asked Isakson’s office about any interventions he may have made for Petit or MiMedx. At the time, Maddox told the newspaper that Isakson’s involvement had been limited to inquiring about a Freedom of Information request Petit made, unspecified payment issues and helping Petit contact the VA inspector general to discuss concerns about a rogue sales agent.

Maddox apologized Wednesday and said in her earlier remarks she had been unaware of the inquiry involving the VA products.

It’s unclear if that inquiry had any impact on the VA’s decision-making at the time. Asked Wednesday if the facility continued using MiMedx products, a spokesman for the Atlanta VA referred questions to the VA’s inspector general’s office, which did not respond to the AJC.

Staff Writer Tamar Hallerman contributed to this article.

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