With Obamacare in the balance, Senate minority leader Chuck Schumer has not been coy about his plans to make confirmation difficult for Georgia congressman Tom Price, Donald Trump’s nominee to head the Department of Health and Human Services. Now, the senator is making good on his promise, with help from CNN.
On Monday, CNN reported that Price purchased “$1,001 to $15,000 worth of shares” in biotech company Zimmer Biomet in March 2016, days before introducing the Healthy Inpatient Procedures (HIP) Act, “legislation that would have delayed until 2018 a Centers for Medicare and Medicaid Services (CMS) regulation that industry analysts warned would significantly hurt Zimmer Biomet financially once fully implemented.” Adding that Zimmer Biomet shortly after made a contribution to Price’s reelection campaign, CNN has made the story part of its dossier of conflict-of-interest stories plaguing the incoming Trump administration. Schumer, for his part, has called for a full-scale ethics investigation.
But the case is hardly what it seems.
On Monday night, the Trump transition team released a statement to reporters with information about Representative Price’s financial arrangements. According to the statement, Price has a diversified, broker-directed portfolio. All investment decisions are made by a Morgan Stanley financial adviser. On March 17, 2016, Price’s financial adviser purchased 26 shares of Zimmer Biomet, at a total value of $2,697.74, as part of a periodic portfolio rebalancing. Price was alerted to the sale on April 4. Eleven days later, Price submitted a House Periodic Transaction Report (a financial disclosure form required of House members) that reflected the trade. CNN provides no evidence that Price directed the trade, or that he knew about it before April 4.
The financial information is considerably less suggestive in context. Price’s net worth is estimated at upwards of $15 million. Taking even the Center for Responsive Politics’s lower estimate — $10.8 million as of 2014 — Price’s investment constitutes less than 0.03 percent of his net worth. There is no suggestion that Price’s legislation would significantly benefit Zimmer Biomet even if it passed (which it hasn’t), so there is no likelihood that the stock will accrue to Price’s benefit anytime soon. Has he really staked his congressional career on $3,000 in biotech stock? Or the $1,000 campaign contribution Zimmer Biomet gave him? And, of course, Price’s investment has been a matter of public record for eight months. Yet it’s only become a dire matter now?
Nor is the legislation itself particularly suspicious. In mid 2015, CMS proposed the Comprehensive Care for Joint Replacement Model, a new payment model for lower-extremity joint replacement procedures. In response, Price co-authored a letter with 60 other members of Congress requesting that the proposed January 1, 2016, effective date be postponed, on the grounds that “the CMS proposal represents a significant change to our healthcare delivery system which could have a negative impact on patient choice, access and quality.” That letter was delivered September 1, 2015. Consequently, implementation was delayed until April 1, 2016. The HIP Act was introduced on March 23, 2016. Predictably, the language of the bill introduced after the stock purchase closely reflects the language of the letter penned long before it, which stands to reason: Preserving “patient choice” in the face of attempts by the federal government to institute various health-care mandates has been a central plank of Price’s decade in Congress.
Congressional Democrats have rarely been scrupulous about ethics concerns — until they can puff up those concerns to derail political opponents.
Compare this to potential conflict-of-interest cases across the aisle, and it becomes clear just how flimsy is the charge against Price. In 2008, then-House speaker Nancy Pelosi purchased 5,000 shares of Visa stock at $44 a share, just as legislation targeting credit-card companies was introduced in the House. Two days later, the shares were trading at $64 apiece, a $100,000 gain. (Pelosi’s conflict of interest was so blatant, and her disavowal on CBS’s 60 Minutes so transparent, that it is commonly cited as an inspiration for the 2012 Stop Trading on Congressional Knowledge, or STOCK, Act.) In 2010, while supervising the congressional panel overseeing the $700 billion bank bailout, Massachusetts senator Elizabeth Warren took $90,000 to testify in a class-action lawsuit brought by retailers against several of the banks being bailed out. And, unsurprisingly, it turns out Schumer himself has profited from convenient holdings — such as the bonds he purchased from Fannie Mae and Freddie Mac in 2002 and redeemed in 2008 and 2009. All together, the bonds netted Schumer at least $46,000.
Congressional Democrats have rarely been scrupulous about ethics concerns — until they can puff up those concerns to derail political opponents. The scaremongering about Price does not stand up to the facts, or to common sense. But with Barack Obama’s signature health-care legislation on the line, expect Democrats to use every play in the book to make life difficult for key Republicans.