It's hard now to remember, but all the way back in January, Tom Price's nomination to lead the Department of Health and Human Services was very nearly derailed by revelations that the Georgia congressman had bought between $1,001 and $15,000 worth of stock in a medical device company—Zimmer Biomet—while he was working on legislation that would affect its profits.
During his Senate confirmation hearing, Senator Chris Murphy asked Price, "Tell me how it can possibly be O.K. that you were championing positions on health-care issues that have the effect of increasing your personal wealth?," while Senator Ron Wyden wanted him to admit he showed obvious bad judgment.
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For most people watching, the idea running through their heads was likely along the lines of, "Man, I would not want to be that guy." But for four of Price's colleagues in Congress, it was, "Get my broker on the phone!" Per Politico:
On the very day that Wyden was decrying Price's bad judgment, Rep. Doug Lamborn, Republican of Colorado, bought shares of the same tiny Australian company, Innate Immunotherapeutics. Within two days three more members also bought in—Republicans Billy Long of Missouri, Mike Conaway of Texas and John Culberson of Texas. Conaway added more shares the following week.
According to an investigation by Politico, some 28 members of the House and six senators each traded over 100 stocks in the past two years, "placing them in the potential
If you're wondering, "Wait, can they really get away with that?" the answer is, yes, they can, because lawmakers, by their own design, are not subject to the same conflict of interest rules as even the people in the White House (though this administration is clearly trying to change that). Five years ago, the hilariously named Stop Trading on Congressional Knowledge (STOCK) Act was passed, which, for the first time, required disclosures about stock trades and barred lawmakers from insider trading. But it hasn't really been the deterrent its sponsors had hoped:
. . . the bill's enforcement mechanisms have been hard to implement. So far, no one has been convicted of insider trading under the Stock Act. And when the Securities and Exchange Commission sought to enforce the act in recent years, it ran up against sweeping opposition in Congress.
When it comes to the congressmen who've made trades that look suspicious, many invariably have the same answer: their broker did it. "I don't decide on, neither am I even informed of, trades that are made in my account," Senator Sheldon Whitehouse told Politico of his purchase of Gilead Sciences, Abbott Laboratories, and McKesson, while he was working on a $6.3 billion medical research funding bill.
Representative Chuck Fleischmann, who sits on the health-care appropriations panel and bought shares in companies developing cancer drugs around the time Joe Biden was leaning on congress to fund his "Cancer Moonshot" proposal, said, "In regard to my stocks, I treat my investments like a blind trust and was unaware of the transaction since my financial adviser makes the transactions."
But those claims ring a tad bit hollow, given the fact lawmakers like Fleischmann could actually put their money in a blind trust—as many of their colleagues have done—but have chosen not to do so. "If you're really not going to be involved, then put it in a blind trust and let a truly independent adviser—not a family relative—make those decisions for you," Campaign Legal Center counsel Larry Noble told Politico.
"When they say, 'Well I didn't know my broker was going to buy it,' you have to start parsing words.
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