Date: Tue, 4 Apr 2000 11:41:33 -0700

To: Recipient List Suppressed:;

By Rita Rubin, USA TODAY

WASHINGTON - A congressman asked the Securities and Exchange Commission on Monday to determine whether a manufacturer of saline breast implants violated securities laws when it denied it was under investigation.

The request by U.S. Rep. Tom Bliley, R-Va., stems from the response of Mentor Corp. to a March 23 article in USA TODAY.

The article stated that Mentor was the subject of an ongoing criminal investigation by the Food and Drug Administration for "allegations of serious irregularities" in studies Mentor conducted of its breast implants.

The article was based on an internal FDA memo. On the day it ran, Mentor's stock dropped nearly 50% before trading was halted briefly.

Later that day, the company issued a statement saying that the investigation was related to "manufacturing issues," as opposed to studies. Mentor also said that the FDA Office of Criminal Investigations denied the investigation had anything to do with serious research irregularities.

The stock in the Santa Barbara, Calif., company then rebounded sharply when trading resumed.

Bliley chairs the House Commerce Committee, which oversees the FDA. The committee recently asked whether the FDA stood by its original description of the Mentor investigation. A memo last Wednesday from an FDA staff member to a Commerce Committee investigator confirmed that the agency did.

"Since Mentor's public statement affected the trading of its stock, and material information in Mentor's public statement is in conflict with information provided by the FDA, I am forwarding this matter to the SEC to determine whether federal securities laws were violated," Bliley wrote in a letter to SEC Chairman Arthur Levitt.

But Mentor counsel Douglas Altschuler said he "absolutely, unequivocally" stood by the company's statement denying an FDA investigation into research irregularities. Altschuler said that the FDA staffer investigating Mentor told him he had never seen or heard of the description quoted by USA TODAY.

"Bliley is just off-base," Altschuler said . " I don't understand what's motivating this, or why this is going on. If there is a problem with our breast implant studies, let us know."

The FDA currently is examining the safety and effectiveness of implants.

On March 1, an FDA advisory committee recommended that the FDA allow Mentor to keep selling its saline implants.

In a letter March 17, Bliley had asked FDA Commissioner Jane Henney why the FDA allowed Mentor to appear before the advisory committee even though the company was under investigation.