6 Senators Assessing Trump's HHS Nominee Own Health Care Stocks, Too
President-elect Donald Trump's pick to run the Department of Health and Human Services is taking heat for his controversial stock holdings in companies affected by laws he has worked on and voted for.
But federal records show several senators who will take part in confirmation hearings for Rep. Tom Price, a Georgia Republican, have substantial health-related holdings as well.
At least six members of the two Senate committees tasked with questioning or confirming Price, who was trained as an orthopedic surgeon, hold shares in health care companies. A Kaiser Health News analysis finds that the investments, which include shares in companies such as Merck, Medtronic and Gilead Sciences, have been held by Sens. Thomas Carper, D-Del., Bill Cassidy, R-La., Susan Collins, R-Maine, Tim Kaine, D-Va., Mark Warner, D-Va., and Sheldon Whitehouse, D-R.I.
"This conflict of interest problem is one that members [of Congress] have danced around over a period of years much too lightly," said former Rep. Lee Hamilton, a Democrat, who founded the Indiana University Center on Representative Government after spending more than 30 years in Congress. "And I think it needs to be corrected in order to have confidence in the institution."
KHN examined the most recent annual financial disclosures for the 40 senators who sit on either the Finance Committee; the Committee on Health, Education, Labor and Pensions; or both. The HELP Committee's courtesy hearing with Price is Wednesday, and the Finance Committee's more pivotal vote has been scheduled for Jan. 24.
About half the senators reported holding stocks in their households, but only six disclosed owning stocks in health and biomedical firms.
Of the six, Whitehouse and his family have the most health stocks, split among various IRAs, education savings accounts and other accounts and belonging to Whitehouse, his wife and his children. In all, they disclosed between $402,000 and $1.3 million in health-related holdings in 2015. The disclosures don't give exact numbers and instead include ranges.
Price has been criticized following a Wall Street Journal investigation that found he traded more than $300,000 in health-related stocks while serving on a health subcommittee of the House Committee on Ways and Means.
Democrats have called for investigations into whether Price made trades based on insider knowledge.
Earlier this month, Trump transition spokesman Phillip Blando blasted Democrats' hypocrisy and singled out Carper, Warner and Whitehouse for owning health stocks, calling for similar questions to be asked about their trades and holdings. He declined last week to comment further on the senators' stock holdings. Price has told ethics officials he would divest his stock in dozens of publicly traded companies.
Owning the stocks is legal, but not everyone agrees on whether it's fair, said Tim LaPira, a political science professor at James Madison University, adding that the Senate is on average wealthier than the House. "Of course they can invest their money as they please," he said.
The major concern, political analysts said, is that members of Congress will help pass laws to benefit companies in which they own stock.
According to the Senate ethics rules, "A Member, officer, or employee may not use his or her official position for personal gain."
Although insider trading has been illegal for members of Congress since 2012, it's nearly impossible to prove,
Research studies have shown that members of Congress tend to make higher returns on the stock market than the general public. "We found that in general, they earn about 12 percent a year more than the average bear,"
said Alan Ziobrowski, a retired Georgia State University real estate professor who published a 2004 study of Senate stock performance from 1993 through 1998. He did a similar study of House stock performance in 2011.
He said members of Congress could have access to information that can aid in stock picking, including earlier notice that laws are about to change or additional information gathered from industry lobbyists. Ziobrowski said a follow-up study by another researcher in 2013 found that members of Congress "quit fooling around on the stock market" after his study of the Senate was released, but that no one has repeated his analysis since.
Collins, Kaine and Whitehouse serve on the HELP Committee, whose jurisdiction includes measures pertaining to health, "biomedical research and development." Carper and Warner are on the Finance Committee, which deals generally with money and taxes. But it also handles "health programs under the Social Security Act and health programs financed by a specific tax or trust fund." Cassidy is on both committees.
Since 2015, Whitehouse appears to have been an active trader and filed 10 periodic transaction reports in 2016. Annual reports for 2016 aren't due until mid-May, but periodic reports must be filed within 45 days of a trade, according to the 2012 STOCK Act, which stands for Stop Trading on Congressional Knowledge.
Around the time the House released its near-final version of the 21st Century Cures bill, which was intended to speed the FDA's drug approval process, Whitehouse's family purchased more stock in Gilead Sciences, which makes the pricey hepatitis C drugs Sovaldi and Harvoni.
The Whitehouses' Gilead purchases that month ranged from $4,000 to $60,000. The family also purchased shares of Amgen and Abbott. Whitehouse later voted in favor of the bill
. The Gilead stock decreased in value following these purchases but got a slight bump up just before the bill was signed into law on Dec. 13. Some of the Gilead stock was sold about a week later.