Senators Traded in Tobacco Stocks While Sitting on Health Committee
WASHINGTON—Two high-ranking lawmakers on the Senate committee that crafts legislation about health and oversees public health agencies disclosed that they or their families traded in tobacco company stock while they were on the committee, according to a STAT review.
Sen. Orrin Hatch (R-Utah) reported purchasing at least $15,000 worth of stock in Philip Morris International. Sen. Patty Murray’s (D-Wash.) husband, meanwhile, owned an account whose manager bought and sold about $1,000 worth of stock in Reynolds American while Murray was the top Democrat on the Committee on Health, Education, Labor, and Pensions.
The revelations come on the heels of the resignation of Dr. Brenda Fitzgerald, who left her post as the director of the Centers for Disease Control and Prevention last Wednesday, the day after Politico reported that she bought and sold tobacco company stock while in that job. Many in the public health community were incredulous that the leader of an agency dedicated to reducing tobacco use would invest in a tobacco company.
Fitzgerald later said that the stock was purchased by someone working for her investment manager, and that when she learned of the purchase, she directed the stock to be sold, according to the Wall Street Journal.
While executive branch employees are forbidden to work on issues in which they have a financial interest, such rules do not apply to members of Congress. Lawmakers are allowed to write and vote on bills that would impact themselves financially, although they have to disclose their financial positions—along with the holdings of their spouse and dependent children—and report when assets are bought or sold.
Fitzgerald’s various financial interests prevented her from working on certain agency projects and from attending some congressional hearings — a fact which drew criticism from Murray. In December, Murray wrote a letter to Fitzgerald, calling on her to resolve the conflicts of interest, and in January, the senator said she was “frustrated” that Fitzgerald was still unable to appear before the committee at hearings.
Until this past summer, Murray’s husband owned stock in a tobacco company.
A form filed by Murray on June 22, 2017, disclosed that her husband sold between $1,001 and $15,000 of Reynolds American stock on June 15. Disclosure forms do not list the date the stock was purchased.
According to a Murray aide, “the disclosure form shows the liquidation of an account managed by a broker without guidance.” Murray and her husband neither knew about the purchase nor specifically approved it, according to the aide.
The aide said that the purchase of the shares was not reported because the value of the stock was below $1,000, while the sale was reported because its value was just over $1,000. By law, members of Congress are only required to report purchases and sales of stock over $1,000.
“It doesn’t surprise me that you’re finding this conflict of interest among senators who are on the health care committee,” said Craig Holman, government affairs lobbyist for the watchdog group Public Citizen. “They’ve never seen fit to apply the same conflict of interest law to themselves that they apply to everyone else.”
Indeed, two years ago a STAT investigation found that in 2014, about 30 percent of senators and 20 percent of representatives held assets in biomedical and health-care companies, or in funds investing in those industries, including some lawmakers who sat on committees that advanced health-related legislation.
Murray has been critical of tobacco companies—she praised the Food and Drug Administration when the agency took up the baton of regulating all tobacco products, and criticized the agency when it delayed some of its oversight.
The Senate’s most senior Republican, who is also a member of the HELP committee, reported owning stock in Philip Morris International, which sells the famed Marlboro cigarette.
Hatch reported that on Oct. 23, 2012, when he was a member of the committee, an account on which he is a joint owner acquired between $15,001 and $50,000 of Philip Morris stock. He reported that in 2013, he owned less than $1,001 of the stock and collected dividends between $201 and $1,000.
On April 3, 2013, Hatch established a trust for some of his assets—an agreement with a bank where the bank manages the stocks and makes the decisions when to buy and sell, and what to do with the profits. The Philip Morris stock went into that trust.
Hatch’s office did not respond to requests for comment.