Health pick’s trades put STOCK Act in spotlight

Health pick’s trades put STOCK Act in spotlight
© Getty Images

President-elect Donald TrumpDonald John TrumpKimberly Guilfoyle reports being asymptomatic and 'feeling really pretty good' after COVID-19 diagnosis Biden says he will rejoin WHO on his first day in office Lincoln Project offers list of GOP senators who 'protect' Trump in new ad MORE’s pick to lead his administration’s overhaul of the healthcare system is facing growing pressure over whether his portfolio and politics were too tightly mixed.

Senate Democrats are expected to grill Rep. Tom Price (R-Ga.) over whether his investment decisions were informed by his activities as a lawmaker who exerted significant influence over the nation’s health policy.

Price’s first hearing to be confirmed as secretary of the Department of Health and Human Services (HHS) will take place Wednesday.


The Price story has also thrust into the spotlight a 2012 law that forbids members of Congress from personally profiting from private information obtained through their congressional work.

The Stop Trading On Congressional Knowledge (STOCK) Act was one of the few bipartisan achievements of President Obama’s tenure. Of the 435 members in the House, 417 voted to pass it, including Price.

No lawmaker has faced insider trading charges since the law was approved, but it has given ammunition to Democrats eager to question Price’s trading activity.

Lawmakers have focused on a series of trades Price made in medical companies, oftentimes in close proximity to political activity that may have boosted their profits.

Democrats have gone so far as to call for Price’s confirmation hearing to be delayed until ethics investigators have had a chance to review the activity.

Sens. Al FrankenAlan (Al) Stuart FrankenPolitical world mourns loss of comedian Jerry Stiller Maher to Tara Reade on timing of sexual assault allegation: 'Why wait until Biden is our only hope?' Democrats begin to confront Biden allegations MORE (D-Minn.), Elizabeth WarrenElizabeth WarrenThe Hill's Campaign Report: Democratic Unity Taskforce unveils party platform recommendations Progressive activist Ady Barkan endorses Biden, urges him to pick Warren as VP Congress must act now to fix a Social Security COVID-19 glitch and expand, not cut, benefits MORE (D-Mass.) and Tammy BaldwinTammy Suzanne BaldwinBiden campaign adds staff in three battleground states Clinton, Buttigieg among Democrats set to hold virtual events for Biden Warren top choice for VP for some Black progressives MORE (D-Wis.) said Tuesday that Price’s confirmation should not go forward until an ethics probe has determined no wrongdoing was committed.

“Allowing Congressman Price's nomination to move to a hearing with questions about his ethical qualifications left unanswered would send an early, clear, and deeply troubling signal that the Senate's critical oversight functions will be given a back seat to the demands of the Trump Administration,” the lawmakers wrote in a letter Wednesday to Sen. Lamar AlexanderAndrew (Lamar) Lamar AlexanderCoronavirus Report: The Hill's Steve Clemons interviews Randi Weingarten China lashes out at US over WHO withdrawal The Hill's Morning Report - Presented by Facebook - Trump backs another T stimulus, urges governors to reopen schools MORE (R-Tenn.), who chairs the committee vetting Price.

Even if the hearing is not delayed, Democrats are making clear that Price’s personal trading will be a central focus of their attacks when he appears.

For its part, the Trump transition team has backed Price and dismissed the questions as partisan attacks aimed at derailing a pick central to the ObamaCare fight.

“Any effort to connect the introduction of bipartisan legislation by Dr. Price to any campaign contribution is demonstrably false,” said Phil Blando, a transition spokesman. “The only pattern we see emerging is that Senate Democrats and their liberal media allies cannot abide the notion that Dr. Tom Price is uniquely qualified to lead HHS and will stop at nothing to smear his reputation.”

The STOCK Act does not actually place stricter insider trading rules against members of Congress and their staff. Rather, the 2012 law beefs up disclosure requirements for financial trades and makes explicit that lawmakers and top executive branch officials are subject to those laws, just as other investors would be.

The Trump transition has defended Price’s trades, arguing they were not directed by Price but rather done by his broker as part of a normal portfolio realignment.

For example, CNN reported Monday that Price purchased between $1,000 and $15,000 in stock in a medical device company, Zimmer Biomet, and then days later introduced legislation that would delay a federal rule to the benefit of just such a company.

Zimmer Biomet also went on to contribute $2,000 to Price’s congressional campaign. There have also been additional reports that have connected some trading by Price in medical stock to political activity in similar sectors.

Senate Minority Leader Charles SchumerChuck SchumerA renewed emphasis on research and development funding is needed from the government Data shows seven Senate Democrats have majority non-white staffs Trump may be DACA participants' best hope, but will Democrats play ball? MORE (D-N.Y.) has seized on the reports, telling CNN Tuesday it “could very well be a violation of the law.”

“This is not some broad legislation. ... This is a very narrow, specific company that dealt with implants,” he told CNN Tuesday. “And the legislation specifically affects implants. He puts it in a week after he buys the stock?”

The Trump transition says that stock was purchased by Price’s broker as part of dozens of transactions, and was done without his knowledge. Trump officials also noted that the $2,697.74 in company stock that Price purchased in March had gained less than $300 in value since then.

Transition officials have also noted that some Democrats, including Sens. Mark WarnerMark Robert WarnerSenators press IRS chief on stimulus check pitfalls Hillicon Valley: Facebook takes down 'boogaloo' network after pressure | Election security measure pulled from Senate bill | FCC officially designating Huawei, ZTE as threats Overnight Defense: Democrats blast Trump handling of Russian bounty intel | Pentagon leaders set for House hearing July 9 | Trump moves forward with plan for Germany drawdown MORE (D-Va.) and Sheldon WhitehouseSheldon WhitehouseDemocrat asks Barr to preserve any records tied to environmental hacking probe Democrats warn Biden against releasing SCOTUS list Key Democrat accuses Labor head of 'misleading' testimony on jobless benefits MORE (D-R.I.) have also traded in medical stocks. Both those senators have defended the trading activity, calling them the work of their own independent advisers.

Some ethics experts argue that while the circumstances alone do not prove any wrongdoing, they could merit a closer look.

“It seems curious that he’d be introducing legislation that is seen as benefiting a few companies, and his broker just happens to buy stock,” said Lawrence Noble, general counsel for the Campaign Legal Center, a nonpartisan group that encourages strict enforcement of campaign finance laws. “Effectively what they’re saying is that it’s just a coincidence. He seems to have had these coincidences before.”