New revelations about U.S. Rep. Tom Price’s financial entanglements could complicate Senate Republicans’ plan to swiftly confirm the Roswell Republican as President-elect Donald Trump’s health secretary in the new year.
Senate Democrats on Friday seized on a report from The Wall Street Journal that Price traded more than $300,000 in shares of health-related companies over the past four years while pushing legislation on Capitol Hill that could have had an impact on those businesses' bottom lines.
The report thrusts into the spotlight Price's ties to the medical community. It also raises new questions about potential conflicts of interest to which Price, an orthopedic surgeon, will need to answer during his Senate confirmation hearings that are expected to be held next month.
Publicly, Democrats took a measured tone Friday, but they signaled they plan to zero in on whether the timing of Price’s stock actions violate a 2012 insider trading law that bars members of Congress and their aides from buying stocks based on nonpublic information acquired in their positions.
“As Democrats and Republicans have agreed in the past, any possibility that an elected official has fallen short of that very basic standard must be taken seriously,” said U.S. Sen. Patty Murray of Washington, the top Democrat on the Senate Health, Education, Labor and Pensions Committee, one of two panels that will hold confirmation hearings on Price. “I expect a detailed and thorough examination of Congressman Price’s financial history in the coming days and weeks.”
Trump’s team circled its wagons around Price. A transition spokesman said Price “has complied fully with all applicable laws and ethics rules governing his personal finances.”
“As HHS secretary Dr. Price will work closely with the relevant federal government ethics offices to ensure his continued compliance and transparency,” the spokesman said in a statement.
Price’s office declined to comment. The Roswell congressman has not granted an interview about his Cabinet nomination since the news of the pick went public Nov. 28.
Senate confirmation
Robert Walker, the former chief counsel to the House Ethics Committee, said what he’s seen of Price’s stock trades doesn’t appear to be insider trading.
He said that in order to prove Price ran aground of such ethics laws, opponents will need to concretely tie individual stock trades with the transmission of specific, nonpublic information.
“That’s a pretty high barrier to meet,” Walker said.
In confirmation battles, however, whether a nominee has followed the letter of the law is just one of many considerations. Appearances also play a major role.
Richard W. Painter, an ethics lawyer for President George W. Bush’s administration who now teaches at the University of Minnesota, said the questions surrounding Price’s trading activity still represent a serious challenge.
Painter said Price should provide evidence to prove he did not use confidential information in making those trades and that he cleared the activity with the House Ethics Committee.
“He’s got some explaining to do,” Painter said of Price. “For confirmation, the burden really ought to shift to him to show he was not in possession of material, nonpublic information. If it’s in the gray area, that’s not good. It shows a lack of judgment.” And that, Painter said, creates an impression that undermines public confidence.
Lacking the votes to sink Price’s nomination on their own, Senate Democratic leaders are hoping that some sort of public backlash can help prompt Republicans to abandon support for Price.
They will need to win over at least three GOP senators to do so, assuming that all Democrats stick together in opposition. That may not be an easy undertaking in hyperpolarized Washington during a time when Republicans are eager to get moving on Trump’s agenda. Price is expected to take a lead role in pursuing a key part of that agenda: the repeal and replacement of the Affordable Care Act, better known as Obamacare.
What is unclear at the moment is how problematic Price’s stock trading will be for Senate Republicans, if at all. Most stayed quiet on Friday in the hours leading up to the holiday weekend, including the GOP chairmen of the two committees vetting Price.
Georgia U.S. Sen. Johnny Isakson late Friday expressed his continued support for Price.
“Tom has worked tirelessly in Congress to improve Americans’ health care, and his integrity and character are without question. He is the right person for the job and will bring his experience as a doctor and his passion for public service to the Department of Health and Human Services as secretary,” Isakson said in a statement.
Without the help of Republicans, the most Democrats could do to sabotage Price’s nomination on their own is to temporarily delay his vote on the Senate floor.
Historical precedent
Price is certainly not the first Cabinet nominee to be forced to answer questions about his business ties and potential conflicts of interest.
Several nominees from Presidents Bill Clinton, George W. Bush and Barack Obama faced similar scrutiny, which cost some their chance to serve.
Former Senate Majority Leader Tom Daschle was one of the most recent. Nominated by Obama for secretary of health and human services, Daschle withdrew his nomination after admitting he had not paid some $128,000 in income taxes and acknowledging he had earned hundreds of thousands of dollars in consulting and speaking fees from health care interests.
Other Obama picks won confirmation under criticism, including Timothy Geithner, who faced pointed criticism when he was nominated to be treasury secretary over personal tax lapses involving income he received from the International Monetary Fund.
Years earlier, two of George W. Bush’s Cabinet nominees, Linda Chavez as secretary of labor and Bernard Kerik as secretary of homeland security, dropped out after facing scrutiny, according to Forbes.
Price’s health ties
Price’s financial ties to the health care industry while serving in Congress and the Georgia Senate are long-running and well-known.
Four of the five largest donors to Price’s campaign committee in the 2016 election cycle were health care organizations.
What’s lesser known is Price’s penchant for trading shares of companies in the health care-related fields, which was first reported Thursday by The Wall Street Journal.
An Atlanta Journal-Constitution review of Price’s financial disclosure reports to Congress found he invested in 11 health care, pharmaceutical or biomedical companies this year, and he sold stock in five others. All but one of those transactions were valued between $1,000 and $15,000 and happened on March 17, according to the disclosure reports.
The biggest transaction, however, was Price’s Aug. 31 purchase of between $50,000 and $100,000 worth of stock in Innate Immunotherapeutics, an Australian biomedical firm.
Back when he was in the Georgia Senate, much of Price’s campaign money came from doctors, medical groups, and insurance and pharmaceutical companies, according to an AJC review of Price’s campaign disclosures from 1998 to 2003.
Unsurprisingly considering his long association with the Medical Association of Georgia — the state’s doctors lobby — he collected $7,000 from the MAG and $4,000 from MAG Mutual, the group’s medical malpractice arm. Price was a leading proponent of so-called “tort reform,” which would have limited lawsuit awards against doctors for malpractice.
In Congress, Price has pushed legislation to limit malpractice awards as well.
Many pharmaceutical companies donated to Price campaigns, even though most of the time he represented the minority party. Eli Lilly contributed four times between 1998 and 2003, Pfizer three times and Abbott Laboratories five times, according to the AJC review.
He also received at least three contributions from cigarette maker Philip Morris.
Many of the same companies gave to other lawmakers, but Price received a particularly high percentage of health care money.
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