Fri, Jan 6, 2023 9:00 AM
By Ria Roebuck Joseph, Center Square contributor, The Center Square
According to a DC ethics watchdog, Congress as a whole has an ethics problem with insider trading. Oregon's Democratic Rep. Earl Blumenauer and his wife are top examples of the problem, says the Foundation for Accountability and Civic Trust (FACT).
At the close of 2022, FACT released its list of Congressional ethics violators, with a slight shift from previous years. This year’s list revealed the top violation of congress as a whole as well, i.e. conflict of interest and personal finances.
The first example cited by FACT is Rep. Blumenauer for the $15,000 purchase of Amgen stock by his wife. In FACT’s request to the Office of Congressional Ethics to investigate whether the congressman was in violation of conflict of interest laws, the Executive Director of FACT, Kendra Arnold, pointed out that “the law does not distinguish between whether stock shares were purchased in the Member’s name or the Member’s spouses name, in each instance the stocks are treated as the Members.”
Blumenauer, who is a member of the House Ways and Means Committee and its Health Subcommittee, appeared compromised because his position on the subcommittee could have given him foreknowledge that the Department of Health and Human Services had planned to purchase $290 million worth of Nplate - an Amgen drug dispensed for radiological emergencies in the event of blood cell injuries after nuclear exposure. This was a precautionary measure planned by HHS amidst threats from Vladimir Putin to unleash nuclear weapons.
Just eight days before HHS announced its multi-million dollar purchase, Blumenauer’s wife snapped up stock in Amgen which saw a 24% price increase after the announcement.
Ethics can be called into question when members appear to use their official position, and information gained from that position, for financial benefit. The Sept. 26 shares purchase in the biopharmaceutical company appeared to be just that, says the group.
“Given the information that they have access to, under the ethics rules, Members of Congress who sit on committees must meet a higher standard. Every time the public sees a transaction like this it causes them to question the motivation of our elected officials, something the ethics rules are specifically designed to prevent. The facts of this case require that the OCE investigate to determine precisely what occurred here and to prevent these types of transactions in the future,” Arnold stated when she revealed Blumenauer’s purchase.
Additionally, Arnold pointed out in her call for an investigation, that a conflict of interest exists when the private affairs of a member on the subcommittee (such as stock ownership) conflicts with their ability to act on behalf of the public interest (such as voting on legislation and other official duties). In other words, owning shares in a company of which you may later have to decide policy and take governmental action, creates public doubt that a committee member can act impartially and therefore compromises the integrity of that action.
Arnold urged The Office of Congressional Ethics “to immediately investigate whether Representative Blumenauer (1) used information obtained from his official role on the Heath Subcommittee and (2) further violated conflict of interest laws with his role on the Health Subcommittee which can directly affect his personal financial interests.”
Blumenauer’s wife has, in the past, traded in stocks or bonds in several health care companies under the oversight of the House Ways and Means Committee and its Health Subcommittee of which Blumenauer is a member, according to The New York Times.
“Unfortunately, this past year the underlying theme of FACT’s complaints involve numerous government officials and their personal financial holdings. As you can see in the complaints in our list these involve the important and basic ethics laws that require disclosure and avoidance of conflicts of interest. Since these rules are fundamental and violations are serious, we hope this trend does not continue in 2023,” Arnold stated.