Senate Democrats said Friday they will scrutinize the health industry stock trades of President-elect Donald Trump’s nominee to head the Department of Health and Human Services, saying they want to ensure that Rep. Tom Price didn’t break insider trading laws while sitting on a major health care subcommittee.
The Georgia Republican’s trades over the past four years will be front and center in his confirmation battle, according to a senior Democratic aide, who told CNN his party will try to determine if Price violated the Stock Act, a 2013 law designed to ensure lawmakers don’t profit on private data they get through their official work.
While there is no evidence that Price, who is an orthopedic surgeon, used inside information when he made multiple trades on health insurance, pharmaceutical and biotech stocks, Democrats and some outside ethics experts think the trades raise serious questions.
“Members of Congress should use their offices to work for the people they represent, not line their own pockets — and as Democrats and Republicans have agreed in the past, any possibility that an elected official has fallen short of that very basic standard must be taken seriously,” said Sen. Patty Murray, the top Democrat on the Senate health committee. “I expect a detailed and thorough examination of Congressman Price’s financial history in the coming days and weeks.”
A spokeswoman for Sen. Ron Wyden of Oregon, the top Democrat on the Finance Committee, which will conduct confirmation hearings for Price, said: “Potential conflicts of interest and impropriety raise serious questions about any nominee’s fitness for the job, and Senator Wyden will consider those issues as a part of the Finance Committee’s thorough vetting process.”
Phil Blando, a spokesman for Trump’s transition team, said Price “takes his obligation to uphold the public trust very seriously.”
He has “complied fully with all applicable laws and ethics rules governing his personal finances,” and if confirmed would comply with the law, Blando added.
Price, the House Budget Committee chairman, had drawn the ire of Democrats even before his stock trades — which were first reported by CQ/Roll Call and the Wall Street Journal — become public.
Democrats oppose Price because he is a leading GOP architect of repealing the Affordable Care Act, the health care law they champion. If he is confirmed at HHS, he will have a major role in determining how the law will be scrapped and what will replace it.
Democrats believe Price’s stock trades provide them an opening to convince the public, and perhaps a handful of Republicans, to oppose his confirmation. Hearings are not yet scheduled but are expected in January. Democrats then will have 48 seats compared to 52 for Republicans, meaning they will need to convince at least three Republicans to abandon Price if they are to defeat him.
This year, Price bought and sold 12 healthcare stocks, including big name biotech stocks like Biogen and Gilead Sciences as well as major pharmaceutical companies like Eli Lilly, Pfizer, and Bristol-Myers Squibb. He also traded in Aetna, the large health insurer; Athena Health, a health care services company; and CVS.
Price made these moves while a member of the Health subcommittee of the Ways and Means Committee, which among other responsibilities oversees Medicare. He also voted for the 21st Century Cures Act, which was signed into law by President Barack Obama earlier this month.
It will provide billions for medical research and clears red tape so the Food and Drug Administration can approve drugs faster, something that could be good for drug companies.
Most of Price’s trades were in the range of $1,000 to $15,000.
His biggest position in 2016 was taken in an Australian biotech company called Innate Immunotherapeutic. Disclosure records indicate Price invested between $50,000 and $100,000 in the company that includes on its board of directors Rep. Chris Collins, R-New York. Collins was the first member of Congress to endorse Trump and now works on Trump’s transition team.
“It shows a lack of judgment to be buying and selling health care company stocks if you are serving on a congressional committee that is making decisions that are going to impact the value of health care company stocks,” ethics expert Richard Painter told CNN. “In particular, if someone has access to confidential information, the (Securities and Exchange Commission) could investigate them.”
Painter, who was chief ethics lawyer for Republican President George W. Bush, said he expects Democrats will try to take advantage of Price’s decision to trade health stocks.
“I’m a lot more interested in this than if you paid your nanny tax. Nobody went to jail for not paying their nanny tax but they did for insider trading,” Painter said. “If he made these trades the burden is going to be on him to convince the committee and the Senate that he was not in possession of material non-public information.”
Price made scores of trades over the last four years. While many were in health stocks, most were not. He has a varied portfolio with interests in Facebook, Boeing, Phillips 66 and more.