The Presidential Transition Team called a CNN story about Dr. Tom Price (R-GA) “junk reporting” and late Tuesday requested “that CNN retract this blatantly false story,” noting that the network failed to accurately report all the facts.
Though the term “fake news,” which President-elect Trump used in a news conference last week to describe CNN’s reporting, was not specifically used, it is clear the Presidential Transition Team considers this latest story from CNN yet another report from that network to which those words also apply.
Price, who will appear before the Senate Health, Education, Labor, and Pensions Committee on Wednesday for his confirmation hearing to become the secretary of Health and Human Services, is one of eight Trump cabinet nominees Schumer has vowed to stop.
A legal expert familiar with the Stop Trading on Congressional Knowledge (STOCK) Act of 2012 tells Breitbart News that allegations made by Senate Minority Leader Chuck Schumer (D-NY) on Tuesday and first reported by CNN that “Donald Trump’s pick to quarterback the replacement of Obamacare, Tom Price, might have broken the law with a questionable stock purchase” are baseless and “entirely about politics.”
Late Monday, CNN reported that “Rep. Tom Price last year purchased shares in a medical device manufacturer days before introducing legislation that would have directly benefited the company, raising new ethics concerns for President-elect Donald Trump’s nominee for Health and Human Services secretary.”
“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,” Sen. Schumer said in a statement first reported in the CNN story.
“The transaction being harped about is so small it barely clears the law’s reporting requirements,” Brady Toensing, former Senate legislative aide and current white collar criminal defense attorney, experienced in defending federal lawmakers and executive branch employees, tells Breitbart News.
“Most importantly, the stock purchase was done through a broker without the Congressman’s knowledge, which is the end of the story for allegations like these. I suspect his accusers are well aware of this, which means these allegations are entirely about politics,” Toensing adds.
“Dr. Price’s Morgan Stanley financial advisor designed his portfolio and directed all trades in the account. Pursuant to the arrangement with Morgan Stanley, the financial advisor, and not Dr. Price, has the discretion to decide which securities to buy and sell in his account,” the Presidential Transition Team said in a statement.
The statement continues:
Dr. Price’s financial advisor periodically rebalances his portfolio to ensure proper diversification. On March 17, 2016, Morgan Stanley undertook a comprehensive rebalancing of Dr. Price’s portfolio. In the course of that rebalancing, the advisor purchased 26 shares of Zimmer Biomet, worth $2,697.74, on behalf of Dr. Price.
The STOCK Act of 2012 applied insider trading laws, which have governed the conduct of executives in publicly traded companies for decades, to members of Congress and employees of the executive branch of the federal government. Those laws require that prosecutors must establish that two elements must be proven to obtain a conviction for violation of insider trading rules:
(1) The person who orders the trade in the stock has a fiduciary duty, to shareholders in the case of the an executive in a publicly traded company, or to the United States and citizens of the United States in the case of a member of Congress or an employee of the executive branch of the federal government; and
(2) The person must make a trade in the stock on the basis of material, non-public information.
“If Tom Price didn’t direct or even know about the trades, how could he be trading on the basis of material non-public information?” a second attorney, an expert in securities law, who is a partner in a major international law firm, tells Breitbart News.
“He reported all these trades. None of them were hidden. His broker rebalanced his portfolio,” the attorney notes.
The attorney says:
Some of the stock purchases were in health care, some were energy, some were financial institutions. If you look at the disclosure there were 34 trades on March 17, and while they included some health care companies they also included: Bank of America, American Express, Lowes Corporation, United Technologies, Xerox Corp, Williams Co, Nike, and Ross Stores.
Republicans were quick to point out the highly political nature of Schumer’s attack on Price, as well as CNN’s role in spreading the narrative.
“I hate to interrupt *the narrative* but it seems awfully relevant that these trades were made w/o Price’s knowledge,” Brendan Buck, an aide to Speaker Paul Ryan (R-WI) tweeted on Tuesday.
At least one other media publication noted the partisan nature of the Democrats’ attack on Price.
“No lawmaker has faced insider trading charges since the law was approved, but it has given ammunition to Democrats eager to question Price’s trading activity,” the Hill reported late Tuesday:
Democrats have gone so far as to call for Price’s confirmation hearing to be delayed until ethics investigators have had a chance to review the activity.
Sens. Al Franken (D-Minn.), Elizabeth Warren (D-Mass.) and Tammy Baldwin (D-Wis.) said Tuesday that Price’s confirmation should not go forward until an ethics probe has determined no wrongdoing was committed.
“Allowing Congressman Price’s nomination to move to a hearing with questions about his ethical qualifications left unanswered would send an early, clear, and deeply troubling signal that the Senate’s critical oversight functions will be given a back seat to the demands of the Trump Administration,” the lawmakers wrote in a letter Wednesday to Sen. Lamar Alexander (R-Tenn.), who chairs the committee vetting Price.
Presidential Transition Team spokesperson Phil Blando said in a statement on Tuesday:
Any effort to connect the introduction of bipartisan legislation by Dr. Price to any campaign contribution is demonstrably false. The only pattern we see emerging is that Senate Democrats and their liberal media allies cannot abide the notion that Dr. Tom Price is uniquely qualified to lead HHS and will stop at nothing to smear his reputation.
But late Tuesday, Schumer repeated and expanded upon his original allegation to CNN’s Manu Raju.
“If he knew about it, it could very well be a violation of the law,” Schumer said.
“Now they say there’s a broker, it’s kind of strange that this broker would pick this stock totally independently of him introducing legislation that’s so narrow and specific to this company,” Schumer added.
In a highly unusual move, White House Press Secretary Josh Earnest joined the partisan narrative about Trump’s pick to run the Department of Health and Human Services.
“This doesn’t seem like a complicated scheme; this seems like exactly the kind of financial entanglement that’s left a lot of people feeling alienated from Washington, D.C.,” Earnest said on Tuesday.
The Presidential Transition Team noted that “[a] key point is that if Price divested today, the total profit on this stock investment would be less than $300”:
Dr. Price’s financial advisor periodically rebalances his portfolio to ensure proper diversification. On March 17, 2016, Morgan Stanley undertook a comprehensive rebalancing of Dr. Price’s portfolio. In the course of that rebalancing, the advisor purchased 26 shares of Zimmer Biomet, worth $2,697.74, on behalf of Dr. Price.
26 shares divided by $2,697.74 is $103.76 per share.ZBH stock closed at $115.20 on January 13, 2017. Dr. Price’s 26 shares were worth $2,995.20 at the end of closing that day. Accordingly, his stock holdings in ZBH have risen a total of $297.46 since March 17, 2016.
“No one has alleged he’s traded based on insider information,” the securities law expert who is the partner in a major international law firm tells Breitbart News.
“The fact of the matter is Dr. Price personally didn’t direct these trades. The broker had the discretionary authority of the account to execute the trades,” the legal expert adds.
Previous reporting by CNN’s Raju was popular at the Democratic National Committee, where staffers mentioned earlier stories Raju wrote in several emails included in those that WikiLeaks released.
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