WASHINGTON ― Senate Democrats want to postpone confirmation hearings for Rep. Tom Price (R-Ga.), President-elect Donald Trump’s nominee to head the Department of Health and Human Services, until investigations of his stock trading end.
Sens. Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wis.) and Al Franken (D-Minn.) on Tuesday called for postponement of the hearings, and sent a letter to Price asking for details of his purchase of an Australian biotech stock.
Democratic Senate Leader Chuck Schumer (D-N.Y.), meanwhile, took to the floor of the Senate to call for a delay, citing his request that the Office of Congressional Ethics investigate Price’s investments. Sen. Kirsten Gillibrand (D-N.Y.), author of the 2012 STOCK Act that bars insider trading by members of Congress, also asked the Securities and Exchange Commission to investigate.
A Senate committee has scheduled a confirmation hearing for Price on Wednesday amid a barrage of news stories raising questions about his stock trading while in office.
Kaiser Health News reported on Friday that Price received shares of an Australian biotechnology firm at a discounted rate not available on the open market. CNN reported on Monday that Price invested in a medical device manufacturer prior to introducing legislation specifically tailored to help that company. On Tuesday, Time reported that Price had purchased shares in six health care companies in 2016 while introducing legislation those companies lobbied to enact. The Wall Street Journal reported last month that Price had traded around $300,000 in shares of health care companies while working on legislation that would directly affect their bottom lines.
Price has claimed that his stock trades were made from a broker-directed fund operated by Morgan Stanley. All trades were made by his financial adviser, according to a fact sheet put out by the Trump presidential transition team. A spokesman for Morgan Stanley said the bank does not comment on private client accounts.
The Trump fact sheet was released in response to the CNN report that Price introduced legislation to help medical-device maker Zimmer Biomet soon after purchasing stock in the company. The statement said Price’s financial adviser purchased $2,698 in Zimmer Biomet on March 17, 2016. Price reportedly did not learn about the purchase until April 4, 2016 ― 12 days after he introduced legislation to delay a Medicare payment model for a specific medical device manufactured by Zimmer Biomet. Price had made $296 on the trade as of Jan. 13, according to the statement.
Price reached an agreement with the Office of Government Ethics to divest his stock holdings upon his confirmation as HHS secretary.
Ethics experts told HuffPost that they endorse an investigation into Price’s trades because there aren’t enough public facts to know whether he violated the STOCK Act or House ethics rules regarding conflicts of interest and the acceptance of improper gifts.
“I have no idea whether Rep. Price had any insider information,” Common Cause’s Paul S. Ryan, a campaign finance and ethics lawyer, said, referring to the Zimmer Biomet trade.
Larry Noble, a lawyer at the Campaign Legal Center and former general counsel to the Federal Election Commission, said Price committed “a possible violation” of the STOCK Act “if he knew that he was going to introduce the bill, it was not public he was going to introduce the bill, he buys stock immediately before that, and then introduces it and that helps it go up.”
House conflict-of-interest rules ban lawmakers from participating in government matters that could affect their financial interest.
Ryan noted there’s an exemption for ownership of publicly traded stock worth less than $15,000. Nearly all of Price’s health care company stock trades, including Zimmer Biomet, were for less than $15,000.
A major exception was Price’s purchase of Innate Immunotherapeutics shares for between $50,001 and $100,000. Both Price and Rep. Chris Collins (R-N.Y.) received a below-market price when they bought shares in the Australian biotech company through a private placement, according to Kaiser Health News. The shares have since appreciated more than 400 percent.
Lawmakers are barred from participating in initial public offerings not open to the broader public, Ryan said.
Noble said other rules may apply, “If they’re giving him a discounted price, that seems like it would be a gift and covered by the ethics rules.”
The Innate Immunotherapeutics stock purchase was the subject of the letter sent by Warren, Baldwin and Franken. The senators ask Price to disclose all information related to his purchase of the shares, including how he learned about the private placement and participated.
Gillibrand’s letter asks the SEC to investigate Price’s purchase of shares in Zimmer Biomet. Unmentioned in her request was that Price received a $2,000 contribution from the company’s political action committee after the legislation was introduced.
Any ethics investigation into whether Price took action to benefit a company or industry in connection with a campaign contribution is unlikely to go anywhere.
In 2011, the House Ethics Committee dismissed charges that Price and six other congressman from both parties created an appearance of impropriety by holding fundraisers with the financial services industry just days after voting in committee to weaken the Dodd-Frank banking reform law.