President-elect Donald Trump's nominee to be the nation's top health official is facing calls for investigation of whether his stock picks were guided by insider knowledge gleaned as a senior member of Congress.
Rep. Tom Price, R-Ga., was chosen by Trump in part because of his plan to repeal "Obamacare," and his confirmation hearings are expected to be a spirited debate about the future of federal health insurance programs. Financial issues could take the hearings in a different direction, however, to determine whether there were any potential violations of federal law.
The Trump transition team says Price, chairman of the House Budget Committee, has complied fully with all applicable laws and ethics rules.
"Congressional Democrats are playing petty politics with these delay tactics and attempting to thwart President-elect Trump's mandate for reform," spokesman Phillip Blando said in a statement. "These charges are laughable."
Price would lead Health and Human Services, a $1 trillion department that oversees major insurance programs, drug safety and approval, medical research and disease prevention.
"There's enough here that, if you're serious about oversight, you can't simply say it's a coincidence and move on," said Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, one of two panels that traditionally hold hearings on HHS nominees.
Another Senate committee, Health, Education, Labor and Pensions, known as HELP, announced Wednesday it has scheduled a hearing on Price's nomination for Jan. 18. Trump, at his New York news conference, said his administration would present a plan to replace the Obama health law when Price is confirmed.
Senators should definitely examine Price's stock trades, said a former White House ethics lawyer for a Republican president.
"I do have to say that it shows an extraordinary lack of judgment for a member of Congress to be buying and selling health care stock," said University of Minnesota law professor Richard Painter, who served as ethics counsel for President George W. Bush. "That is just asking for trouble." Painter also serves as vice chair of Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group.
Recently Rep. Louise Slaughter, D-N.Y., and a consumer advocacy group asked the Securities and Exchange Commission to investigate Price's stock trades. An SEC spokesman declined to comment.
Slaughter wrote the SEC that she was particularly concerned about trades involving some 40 health care companies.
"The fact that these trades were made and in many cases timed to achieve significant earnings or avoid losses would lead a reasonable person to question whether the transactions were triggered by insider knowledge," Slaughter wrote, adding that she does not assume any violation took place.
A 2012 law that Slaughter helped write — the STOCK Act — clarifies that federal laws against insider trading apply to members of Congress and staff, and requires lawmakers to make regular disclosures. Insider trading involves acting on nonpublic information that a reasonable investor would consider important.
Records show that Price, an orthopedic surgeon-turned-lawmaker, has been an active trader in stocks. His purchases tend to involve major businesses across the economy, not only health care companies. They include financial companies, transportation firms and technology giants as well as pharmaceuticals and insurers.
The consumer group requesting an SEC investigation — Public Citizen — focused heavily on Price's purchase this summer of $50,000 to $100,000 in the stock of a little-known Australian drug development company. Innate Immunotherapeutics is trying to find a treatment for a severe form of multiple sclerosis.
The company is traded on the Australian Stock Exchange. In the U.S., the shares are traded in the over-the-counter market, as opposed to major exchanges like the New York Stock Exchange or the Nasdaq Stock Market. One of its directors and a major shareholder is Rep. Chris Collins, R-N.Y., who is helping with Trump's transition.
Records show that Collins bought 4 million shares of Innate Immunotherapeutics on Aug. 29. Two days later, Price purchased shares worth $50,000 to $100,000. At the time, the company's stock was trading for about 30 cents a share; it's now closer to 90 cents.
While the available information so far "falls short of evidence that any illegal insider trading or violations of congressional ethics rules have occurred, the patterns, opportunities and remarkable financial benefits gained, and to be gained, warrant investigation," Public Citizen wrote in its letter to the SEC and the Office of Congressional Ethics.
Sen. Patty Murray of Washington, the ranking Democrat on the HELP committee holding hearings next week, said, "There are real questions that need to be answered about (Price's) financial transactions."
Meanwhile, the Trump transition team is saying that some Democratic senators also trade health care stocks. "The same questions being raised by Senate Democrats about Dr. Price should be directed to their own members," Blando said.
Questions about Price's stock trading were first raised in a Wall Street Journal article last month.