On the face of it, at least, the stock trades look pretty fishy. Rep. Tom Price (R-GA), President-elect Donald Trump’s choice for secretary of health and human services, traded more than $300,000 in shares of health-related companies over the past four years, even while sponsoring major legislation that could affect those companies.
Price, one of the leading opponents of the Affordable Care Act, bought and sold stock in roughly 40 health care, pharmaceutical and biomedical companies since 2012, according to an analysis by The Wall Street Journal. Yet technically he did nothing wrong within a government institution notorious for its weak ethics rules.
Price, a wealthy surgeon and the chair of the House Budget Committee, bought and sold stocks in prominent drug and health care companies including Bristol Meyers Squibb, Gilead Sciences, Amgen, Pfizer and Aetna, according to the report.
The Georgia Republican sits on the Ways and Means subcommittee on health, which oversees Medicare, Obamacare and other government health care programs.
Over the past several years he has sponsored or co-sponsored 44 bills that could have important financial repercussions for the nation’s health care, insurance and drug manufacturing industries. A spokesman for Price, Phil Blando, told The Wall Street Journal that the conservative lawmaker takes his obligation to uphold the public trust very seriously and has complied with all relevant laws.
However, Democrats are sure to question Price about the scope and timing of his financial dealings during his Senate Finance Committee confirmation hearings next month. And some government ethics experts say that even if Price’s investment activities were all above board, the fact that a highly influential lawmaker invested in companies that could be impacted by his legislative action unavoidably raises suspicions and doubts. “It undermines the public trust,” Michael Carome, director of the nonprofit Public Citizen’s Health, told Roll Call.
Congressional ethics rules give members extraordinary leeway in managing their financial portfolios. There is nothing in the House ethics rules that can prevent a member from buying and selling shares of stock, even if the committees on which they serve have jurisdiction over companies or industries in which the member has invested. As long as they publicly disclose those transactions, lawmakers are free to invest their money as they see fit.
“Basically … members of Congress set their own rules when it comes to investments and things,” said Norman Ornstein, a congressional scholar with the American Enterprise Institute. “There are supposed to be checks and balances in terms of the Office of Congressional Ethics in the House and the Ethics Committee, but they’re pretty limited in what they do.”
“It’s an honor system in a way,” Ornstein said in an interview Friday. “You are free to buy and sell stocks and you’re supposed to be able to understand when you’re getting into conflicts of interest … When you are deeply involved in health policy like Price, and you’re making decisions every day that effect the price of stocks … it strikes me that you should be really extra careful about what you’re doing here.”
Congress and the Obama administration have attempted to come to grips with the problem of the questionable trading practices of lawmakers, with mixed results. In 2012, President Obama signed into law the Stop Trading on Congressional Knowledge (STOCK) Act that barred members from using “any non-public information derived from the individuals’ position … or gained from performance of individual duties for personal benefit.”
The anti-insider trading legislation was enacted on the heels of a shocking 60 Minutes report in 2011 that members of Congress could legally trade stocks based on potentially market-moving information garnered as part of their duties – information that wasn’t available to the public. Correspondent Steve Kroft reported that then-Rep. Spencer Bachus (R-AL), a senior member of the House Financial Services Committee, bet against the market in the lead up to the 2008 financial crisis after receiving an “apocalyptic briefing” from then-Fed Chairman Ben Bernanke and then-Treasury Secretary Hank Paulson.
The STOCK Act, signed by Obama with much fanfare, also applied to officials of the executive branch and their staffs. It greatly expanded financial disclosures and made all of the data searchable to make it easier for investigators and journalists to ferret out potential wrongdoing.
But a year later, Congress and Obama quietly watered down some of the most important provisions as part of a bill shepherded through the House by then-House Majority Leader Eric Cantor (R-VA). The plan to automate and digitize financial disclosure forms was abandoned. Investigators now have to apply in the basement of the Cannon House Office Building for authority to print out hard copies of relevant documents.
Price joins an administration in which conflict of interest concerns are far from isolated. President-elect Trump himself appears to plan on retaining ownership of his business, which ethics experts have warned will inevitably -- and quickly -- lead to questions about whether he and his family stand to benefit from specific actions taken by his administration.
For example, Trump's National Security adviser, retired Army Lt. General Mike Flynn, has served on the board of a defense contractor and ran a lobbying company that had contracts with foreign government, and continued to do so even as he was receiving classified intelligence briefings with Trump during the campaign.
Trump's nominee for Defense Secretary, retired Marine General James Mattis, is on the board of a major defense contractor, General Dynamics, which has paid him well over $1 million in cash and stock since 2013. The new administration's pick for secretary of state, Exxon Mobil CEO Rex Tillerson, served as a board member of an oil company joint venture between Exxon and the Russian government that has been affected by U.S. sanctions.
None of these potential conflicts are disqualifying on their own -- Trump's nominees can make a clean public break with their past commitments when they join the government. But the sheer volume of them creates the impression among critics at least that the president-elect is staffing his administration with people who have extraordinarily close ties to companies and foreign governments that will have business before the federal government.
Rob Garver contributed to this report.