Records show Diana Harshbarger was officer, shareholder for company she claimed to have ‘no role or involvement in’

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(WJHL) – Recent TV attack ads link Kingsport pharmacist Diana Harshbarger, a frontrunner in the First Congressional District Republican primary, to American Inhalation Specialists (AIMS), a pharmaceutical company whose actions resulted in a four-year prison sentence for her husband, Robert.

Those ads insinuate — and in at least one case flat out claim — that Diana Harshbarger’s ability to self-fund her campaign’s heavy TV advertising rotation can be partly traced to money made by the now-defunct company.

Harshbarger has twice told News Channel 11 — through her campaign — that she had nothing to do with AIMS.

‘I had no role or involvement in that company whatsoever.’

diana harshbarger on american inhalation medication specialists, may 13

At least from a legal perspective that claim isn’t true, state business documents and records from a court case show.

News Channel 11 made a public records request to the Tennessee Secretary of State’s office and the results show that on paper, Diana Harshbarger was indisputably involved with AIMS.

She was the secretary and one of just two officers and two directors — Robert being the other — from at least 2000 through 2013, when she became president after Robert Harshbarger began his prison sentence.

AIMS’ annual report for 2012 showing Diana Harshbarger as secretary and one of two directors.

News Channel 11 reported on AIMS in mid-May after Harshbarger released an ad criticizing Chinese pharmaceutical manufacturing and U.S. reliance on it. At that time Harshbarger said she “had nothing to do with” AIMS.

After the negative ads came out last week, Harshbarger campaign chairman Zac Rutherford called claims linking Diana Harshbarger to AIMS a “baseless attack” that had been debunked. He said AIMS was a “company Diana had zero involvement in. Zero.”

Harshbarger’s campaign has not yet responded to requests for comment on this story.

Whether Diana Harshbarger’s documented links to AIMS mean she is “running campaign ads made possible by her family selling phony medicine from China,” as one ad alleges, is a difficult if not impossible question to answer based on available documents.

The company was inactive after the court case, Diana Harshbarger’s campaign people said, and it dissolved in 2018. When AIMS was in business, though, the secretary’s role was one that a business law professor said would advisably be taken seriously.

“I would think especially where there are regulatory matters, when you’re dealing with a profession, that if you were going to be a secretary of the corporation you would really want to take it seriously,” University of Tennessee College of Law professor Brian Krumm told News Channel 11.

Further, court documents show both Harshbargers were plaintiffs in a lawsuit stemming from a 1997 car accident in which Diana Harshbarger was injured. A motion filed in that case listed Diana Harshbarger as a shareholder in the company and said she was driving an AIMS company car.

Harshbarger calls out China on pharmaceuticals

When Diana Harshbarger released her own ads in early May criticizing Chinese pharmaceutical manufacturing, News Channel 11 published a story about the facts surrounding Robert Harshbarger’s case. He eventually entered a guilty plea to mislabeling Chinese drugs as U.S. made products from 2004-2009.

“I had nothing to do with it,” Harshbarger told News Channel 11 through a campaign representative at the time. “My husband had a company that made medications. I had no role or involvement in that company whatsoever.”

Diana Harshbarger

We wanted to know whether the case, which resulted in Robert Harshbarger’s agreeing to a four-year prison sentence and paying fines and asset forfeitures totaling about $1.2 million, impacted Diana Harshbarger’s own business approach going forward.

“It didn’t impact me at all,” Harshbarger said in her statement after declining an in-person interview.

State business filings showed Diana Harshbarger became AIMS’ registered agent when the 2013 annual report was submitted April 1, 2014.

Krumm oversees UT Law’s business clinic, which provides free representation to small and medium-sized businesses. He said those smaller businesses often have a spouse act as the secretary because any corporation must have both a president and a secretary.

Brian Krumm

A pharmacy is a different story, he said. There, it wouldn’t be advisable in his view for an officer to be so removed from the day-to-day as to be able to plausibly claim they had “nothing to do” with the business.

“When you have two professionals, understanding the regulatory issues involved with compounding drugs — let’s put it this way, if I was their lawyer I wouldn’t recommend a passive position like that,” Krumm said. “For either of them.”

PACs call out Harshbarger on China

Negative ads released July 16 from two separate political action committees (PACS) have revived the topic, claiming clear links between Diana Harshbarger and AIMS.

For instance, a PAC supporting her opponent Timothy Hill, Club for Growth Action, says in its ad “Harshbarger’s company charged taxpayers full price for cut-rate Chinese drugs.”

In addition to the state business filings, Diana Harshbarger was also referenced in connection with AIMS in a court case.

In April 1997, Diana Harshbarger suffered personal injuries and property damage when a trailer wheel broke loose on a mobile home hauler and hit a vehicle she was driving in the opposite direction on Stone Drive in Kingsport.

Robert and Diana Harshbarger sued for damages. As the case progressed, on April 7, 2000, their attorney, Tom Jessee, filed a motion for AIMS to be joined to the lawsuit.

That motion stated that Diana and Robert Harshbarger were “the shareholders” of AIMS and that she was driving an AIMS company car.

UT Law’s Krumm offered this assessment on the court document.

“If she didn’t have anything to do with the business at all, she was using a company car, and that troubles me a little bit,” he said. “Because if she’s not doing anything for the company and she’s using a company car, is she declaring that as a benefit on her income taxes?”

Baseless attacks, on target, or something in between?

Was AIMS Diana Harshbarger’s company in practice as much as it was on paper? Is there evidence proving, for instance, that Diana Harshbarger is “running campaign ads made possible by her family selling phony medicine from China,” as an ad run by the “Bless Your Heart Coalition” PAC claims?

That’s a tough call, Krumm said. Without evidence that Diana Harshbarger knew about her husband’s fraudulent behavior or benefited financially from AIMS, the possibility remains that in practical terms she was barely involved.

“Can a corporate officer do things that are not in the knowledge of the directors or the board? Yes, they can, just like husbands and wives can hide things from each other in personal relationships,” Krumm said.

AIMS was incorporated in 1994. Its first annual report available at the state, filed in 2000, listed Diana as the corporation’s secretary, with Robert Harshbarger acting as president. The couple was listed as AIMS’ only directors, and Diana Harshbarger signed the 2002, 2006 and 2008 annual reports.

Diana Harshbarger remained secretary, with Robert as president, every year through 2012. That was three years after federal agents executed a search warrant on AIMS.

Robert Harshbarger was indicted in November 2012. He electronically signed the 2012 annual report on April 3, 2013, six weeks before entering a guilty plea to charges of introducing misbranded drugs into interstate commerce and health care fraud.

When campaign staff responded to News Channel 11 inquiries in May, they mentioned that Diana Harshbarger was busy running her own company while Robert ran AIMS.

On paper, though, Robert Harshbarger was also involved with Custom Compounding Centers of America — Diana’s company, according to her campaign.

Even through Custom Compounding was Diana Harshbarger’s company, Robert Harshbarger was its registered agent for years. On July 30, 2012, state records show, Diana Harshbarger replaced him as registered agent for Custom Compounding Centers of America.

That change occurred four months before Robert Harshbarger’s indictment.

The following year, Diana Harshbarger was listed as both president and secretary of AIMS, and she continued to file reports up through 2017 (for the 2016 calendar year). AIMS was dissolved in 2018.

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