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Democratic presidential contender Sen. Kirsten Gillibrand's husband has for more than a decade held a financial stake in an obscure medical device company, even as the New York lawmaker voted in favor of legislation that expedited the approval process for such devices.
Gillibrand's husband Jonathan is an investor in WindCrest LLC, which in 2012 filed patent applications for its flagship invention, a tiny device designed to help guide wires in delicate surgeries. The company's business partners were still seeking to commercialize it as recently as this week, they told CNBC.
The couple, married nearly two decades ago, does not appear to have made any money from the stake in the company. Gillibrand has said in financial disclosures that the investment is worth less than $50,000. She has disclosed the stake every year she has been in office.
But what those disclosures don't reveal is that the money-losing venture could one day turn a profit, thanks to its invention. That payday, however, will require securing a deal with a device manufacturer, according to the Cleveland Clinic, which partnered with WindCrest on the invention.
The investment, though legal, raises questions about whether Gillibrand will profit from an industry she has played a role in regulating as a senator, and which she could influence as president.
And Gillibrand's reluctance to discuss it could weaken one of her chief arguments against President Donald Trump, whose opaque business dealings have earned scrutiny from Democrats and good government groups, and who has declined to release his tax returns.
Gillibrand has made financial transparency a key element of her campaign, and just this week made a splash by releasing her 2018 tax returns and calling on her 2020 rivals to do the same.
While Gillibrand's husband's stake in the WindCrest is mentioned in their joint tax filing released Wednesday, the senator does not appear to have publicly discussed the nature of its work. Gillibrand was the first declared presidential candidate to release last year's tax returns. When she did so, she urged her fellow Democratic contenders to do the same in the interest of transparency.
The senator's campaign declined to comment on the record for this story. An aide told CNBC that the investment was made by Jonathan Gillibrand in 2005, that the couple has not made a profit on it, and that Jonathan has only ever had a "small minority share in the company."
"To Jonathan's understanding, the investment is of little to no value," the aide said. "Senator Gillibrand was proud to release her tax returns first, and believes that radical transparency is important as an elected official."
Little has been reported about WindCrest, which claims to work "to advance the medical device industry and the care of patients" on its website. An email sent to the company bounced back, and a phone call went straight to the voicemail inbox of a separate company called Whittaker Solutions.
Allison Marshall Whittaker, listed as the owner of Whittaker Solutions and a member of WindCrest LLC on her LinkedIn page, declined to comment.
Whittaker provides "design, business, medical & equine info," according to its Delaware corporate charter, as well as "strategic analysis consulting services to businesses and individuals."
In July 2012, the FDA cleared the "Navis Torquer," a medical device that promised to make it easier for vascular surgeons to handle the tiny guidewires that are essential to delicate procedures such as the implantation of catheters.
That clearance was the result of years of effort, and eventually a partnership between WindCrest, which had been filing for patents on similar devices since 2004, and the Cleveland Clinic, one of the country's top hospitals.
The Cleveland Clinic was approached by WindCrest to help commercialize the device, according to Eileen Sheil, the Cleveland Clinic's director of corporate communications.
In order to do so, the two companies formed a partnership called Navis Medical, and are currently in the process of seeking out a company to manufacture the product, Sheil said.
According to Sheil, the device is not being used on patients, but the hope is that one day it will be.
"This little gadget seems to have some potential," Sheil said.
If the product ever made it to market, that could potentially be a financial windfall for Gillibrand. The American catheter market surpassed $1 billion in 2014, and is expected to grow alongside a rising number of genital surgeries, according to a 2017 report from Grand View Research.
To date, the senator's husband has notched losses of about $100 on his stake in the company every year for which that data is available. The aide did not explain why the couple did not sell the investment, given its consistent losses.
The FDA clearance of the device happened to coincide with Congress taking up legislation that affected the industry.
Three days after the FDA cleared the Navis Torquer, President Barack Obama signed into law a sweeping bill that, among other things, expedited the approval process for medical devices and pharmaceuticals, and called on the FDA to prepare a report on the barriers that small businesses face in the medical device approval process.
The Senate voted to pass the bill two months earlier with 96 votes in favor, including Gillibrand's.
"She was proud to support the bill which helped address life-threatening medicine shortages to treat illnesses like childhood leukemia," the Gillibrand aide said.
Gillibrand's actions appear to be perfectly legal and in compliance with disclosure rules, according to government ethics lawyers consulted by CNBC. But they raise questions.
Scott Amey, the general counsel for the nonpartisan Project on Government Oversight, said that his organization was pushing to strengthen the Senate's conflict of interest rules to require not just disclosure, but to prevent senators from voting on bills in which these types of apparent conflicts of interest exist.
"Disclosure is great, but the rules should be strengthened to require recusal so that actual and apparent conflicts are avoided," Amey said in an email.
"Ethics rules and laws should bolster public confidence in the integrity of Congress and the decisions Members make for the country," he said.
Sen. Elizabeth Warren, another 2020 contender, has proposed legislation that would strengthen conflict of interest laws that apply to members of Congress and White House officials.
"The general issue is that, if somebody has a financial interest in a medical device company, it doesn't matter where they are in the [approval] process, if they are working on health-care legislation, they've got a problem," said Richard Painter, who served as President George Bush's top White House ethics lawyer and mounted a failed bid for the Senate in 2018.
Painter, who has been sharply critical of Gillibrand in the past, noted that the amount that Gillibrand has invested in the company was small in comparison to conflicts he saw from other members of Congress, some of whom own large stock holdings worth millions.
But Painter said that he would still advise a sale of the investment.
"The bottom line is, I think she's got to get rid of it," he said. "If she's running for president, she's got to get rid of it fast."
There's no indication that Gillibrand's voting record has been swayed by her stake in WindCrest. Other presidential contenders, in particular Sen. Amy Klobuchar of Minnesota, have faced far more scrutiny for their perceived friendliness to the industry. Minnesota is the American home of Medtronic, the largest medical device maker in the world.
Gillibrand, for her part, has already been combating accusations about her perceived coziness with the industry. On Sunday, Gillibrand will attend a fundraiser at the home of Sally Susman, a top Pfizer executive, CNBC has reported. Tickets cost between $1,000 to $2,700.