SWAMP THING: Trump’s HHS Pick Tom Price Accused Of Insider Trading
Rep. Tom Price may have violated the 2012 Stock Act
Georgia congressman Tom Price is President-elect Donald Trump’s pick to lead the department of Health and Human Services, a key position that will aid Trump in his efforts to repeal and (yet to be seen) replace the Affordable Care Act. As his confirmation hearing approaches tomorrow, allegations of insider trading are raising questions about Price’s questionable ethics throughout his career as a US congressman.
Yesterday, CNN reported that Price purchased between $1,001 to $15,000 worth of shares in medical device company Zimmer Biomet days before introducing a bill that would directly benefit that company.
This all started in 2015, when Tom Price began to speak out against a new Centers for Medicare and Medicaid Services (CMS) regulation that made changes to how manufacturers are compensated for hip and knee implants through Medicare.
This regulation was going to hit medical device manufacturers like Zimmer Biomet the hardest, seeing how hip and knee implants account for 60 percent of its revenue. This is when Rep. Price made the sketchy moves:
In September 2015, Price spearheaded a letter to Andy Slavitt, the acting administrator of CMS, asking that the regulation be delayed because it “represents a significant change to our healthcare delivery system which could have a negative impact on patient choice, access and quality.”
Two days after the letter, Zimmer Biomet’s PAC cut Price’s reelection committee a check worth $1,000, according to campaign finance filings.
When CMS didn’t listen to Price, the congressman unveiled his legislation to delay implementing the regulation until 2018, with the bill coming days after investing in the company, whose shares were worth $103.59 at the time.
Three months after he introduced the bill, the company’s PAC cut Price’s campaign committee another $1,000 check, according to records.
Senate Minority Leader Chuck Schumer (D-NY) released a statement, stating that Price may have broken the law:
“This new report makes clear that this isn’t just a couple of questionable trades, but rather a clear and troubling pattern of congressman Price trading stock and using his office to benefit the companies in which he is investing. The Office of Congressional Ethics needs to conduct an immediate and thorough investigation into these potential violations of the STOCK Act before Rep. Price’s nomination moves forward.”
The Stock Act of 2012 “declares that such [congressional] members and employees are not exempt from the insider trading prohibitions arising under the securities laws.”
After the CNN story was published, an aide of Price said that the Zimmer Biomet stock was purchased by a broker-run account, and Price was not aware of the transaction. If that’s the case it would be oddly coincidental that the purchase would occur days before legislation was being introduced, by Price himself, for that company’s benefit.
If Price was indeed aware of this transaction, that would surely constitute a violation of the Stock Act, as he used his power for personal financial benefit in a way that would qualify as insider trading.
The Zimmer Biomet situation is reportedly one of many. The Wall Street Journal reported that over the past four years, Tom Price has traded around $300,000 worth of shares in health companies while working on legislation that could affect them.
Kaiser Health News reports that Australian biotech firm, Innate Immunotherapeutics, “sold nearly $1 million in discounted shares to two American congressmen sitting on House committees with the potential power to advance the company’s interests, according to company records and congressional filings.” Tom Price was one of them. The deal offered 18 cents a share for a stake in the companies stock which would grow to more than 90 cents a share.
According to his financial disclosures, Price has spent between $50,000-$100,000 on Innate Immunotherapeutics stock and has already made a 400% return on his investment.
Price’s stake in Innate Immunotherapeutics has raised questions of future conflicts of interest, seeing how the company’s private documents indicated that Innate’s fundraising efforts had the intent of getting the green light on their MS drug from the HHS’s Food and Drug Administration. A green light that Price would have a direct say in, as head of the HHS.
Tom Price has said that he would divest from 43 companies, including Zimmer Biomet and Innate Immunotherapeutics, within 90 days of being confirmed. Even if that were the case, his career of questionable ethics still hovers over him. We can expect that these topics will be at the center of his confirmation hearing.
Tom Price appears to be the kind of Washington politician that Trump ran his campaign bashing. President-elect Donald Trump has said he would drain the swamp. It is becoming clearer and clearer each day that he aims to do the opposite.
So with that, I leave you all with this very important question:
Is this a photo of Rep. Tom Price or a photo from the 1982 movie The Swamp Thing? Is there a difference?