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Justice Department Weakens Longstanding Rule Against Election Interference By Prosecutors

Reprinted with permission from ProPublica

The Department of Justice has weakened its long-standing prohibition against interfering in elections, according to two department officials.

Avoiding election interference is the overarching principle of DOJ policy on voting-related crimes. In place since at least 1980, the policy generally bars prosecutors not only from making any announcement about ongoing investigations close to an election but also from taking public steps — such as an arrest or a raid — before a vote is finalized because the publicity could tip the balance of a race.

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US Attorney Broke Justice Department Policy In Absentee Ballot Probe

Reprinted with permission from ProPublica

When the Justice Department recently publicized an ongoing investigation into potentially improperly discarded Trump ballots, critics accused it of violating long-standing agency policy against interfering in an election.

But the unusual decision to publicly detail the Pennsylvania case may also have run afoul of guidelines that Attorney General William Barr himself issued to federal prosecutors this year, according to a memo obtained by ProPublica.

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Richest GOP Donor In South Dakota Was Probed For Child Pornography

Reprinted with permission from ProPublica

T. Denny Sanford, the richest man in South Dakota and a major donor to children's charities, was being investigated for possible possession of child pornography, according to four people familiar with the probe.

Investigators with the South Dakota attorney general's Division of Criminal Investigation obtained a search warrant as part of the probe, according to two of the people, who spoke on the condition of anonymity. They said the case was referred to the Department of Justice for further investigation.

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Trump Weakened Key Civil Rights Agency When It Is Needed Most

Reprinted with permission from ProPublica

In recent weeks, as protests against police violence and systemic racism have swept across the nation, a key federal civil rights agency — an agency created to bridge racial divides — has been largely absent.

Dubbed “America's Peacemaker," the Community Relations Service was established in 1964 as civil rights protesters across the South came under attack. The service, which is part of the Justice Department, is credited with helping to avert bloodshed during some of the most contentious demonstrations of the 1960s.

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How Fed Bailout Greased A Top Treasury Official’s Family Financial Firm

Reprinted with permission from ProPublica.

Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin have become the public faces of the $3 trillion federal coronavirus bailout. Behind the scenes, however, the Treasury's responsibilities have fallen largely to the 42-year-old deputy secretary, Justin Muzinich.

A major beneficiary of that bailout so far: Muzinich & Co., the asset manager founded by his father where Justin served as president before joining the administration. He reported owning a stake worth at least $60 million when he entered government in 2017.

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Sen. Burr Gives Up Intel Committee Chair As FBI Probe Intensifies

Reprinted with permission from ProPublica.

Sen. Richard Burr will be stepping aside as chairman of the Senate Intelligence Committee during the investigation into his stock trades, Senate Majority Leader Mitch McConnell announced Thursday.

“Senator Burr contacted me this morning to inform me of his decision," McConnell wrote in a statement. “We agreed that this decision would be in the best interests of the committee and will be effective at the end of the day tomorrow."

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Sen. Burr And Brother-in-Law Dumped Stocks On Same Day — Then Market Crashed

Reprinted with permission from ProPublica.

Sen. Richard Burr was not the only member of his family to sell off a significant portion of his stock holdings in February, ahead of the market crash spurred by coronavirus fears. On the same day Burr sold, his brother-in-law also dumped tens of thousands of dollars worth of shares. The market fell by more than 30 percent in the subsequent month.

Burr's brother-in-law, Gerald Fauth, who has a post on the National Mediation Board, sold between $97,000 and $280,000 worth of shares in six companies — including several that have been hit particularly hard in the market swoon and economic downturn.

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Sen.Burr Pushes Healthcare Industry Legislation While Trading Its Stocks

Reprinted with permission from ProPublica.

In his 15 years in the Senate, Richard Burr, a North Carolina Republican, has been one of the health care industry's staunchest friends.

Serving on the health care and finance committees, Burr advocated to end the tax on medical device makers, one of the industry's most-detested aspects of the 2010 Affordable Care Act. He pushed the Food and Drug Administration to speed up its approval process. As one of the most prominent Republican health care policy thinkers, he has sponsored or co-sponsored dozens of health-related bills, including a proposal to replace “Obamacare." He oversaw the implementation of major legislation to pump taxpayer money into private sector initiatives to address public health threats. “The industry feels very positive about Sen. Burr," the president of North Carolina's bioscience trade group said during Burr's last reelection campaign. “He's done a stellar job."

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Sen. Burr Sold His Pricey Townhouse To Lobbyist Donor


The chairman of the Senate Intelligence Committee, Richard Burr, has come under fire in recent weeks for unloading stock holdings right before the market crashed on fears of coronavirus and for a timely sale of shares in an obscure Dutch fertilizer company.

Now the North Carolina Republican's 2017 sale of his Washington, D.C., home to a group led by a donor and powerful lobbyist who had business before Burr's committee is raising additional ethical questions.

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FBI Probing Sen. Burr Over Pandemic Stock Sales

ProPublica is a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Federal authorities are scrutinizing Sen. Richard Burr's stock sell-off before the market crash triggered by the coronavirus outbreak, CNN reported on Sunday.

The news comes less than two weeks after ProPublica and the Center for Responsive Politics reported that Burr, a Republican from North Carolina, unloaded between $628,000 and $1.72 million of his holdings on Feb. 13 in 33 separate transactions, a significant portion of his total portfolio. The sales came soon after he offered public assurances that the government was ready to battle the coronavirus.

According to CNN, the FBI has reached out to Burr seeking information about the trades. The inquiry is in its early stages and is being done in coordination with the Securities and Exchange Commission.

Alice Fisher, an attorney advising Burr, declined to confirm the investigation, but she said in a statement to ProPublica that "Senator Burr welcomes a thorough review of the facts in this matter, which will establish that his actions were appropriate."

"The law is clear that any American — including a Senator — may participate in the stock market based on public information, as Senator Burr did," she said. "When this issue arose, Senator Burr immediately asked the Senate Ethics Committee to conduct a complete review, and he will cooperate with that review as well as any other appropriate inquiry."

The FBI and SEC declined comment.

The CNN report suggested that the Justice Department was scrutinizing stock trades made by multiple lawmakers. After the ProPublica story on Burr, various media outlets reported on other senators who also sold stock before the downturn, including a Daily Beast story on GOP Sen. Kelly Loeffler of Georgia and her husband selling between $1.27 million and $3.1 million of stock. They also purchased shares of Citrix, a work-from-home software company.

Loeffler has said the trades were made without her knowledge by a third-party financial adviser. A Loeffler spokesperson told CNN that Loeffler has not been contacted by the FBI.

Burr has defended his sell-off, saying he relied solely on public information to inform his trades, including CNBC reports, and did not rely on information he obtained as chair of the Senate Intelligence Committee.

His stock sales drew widespread outrage, resulting in calls for his resignation from prominent Republicans and Democrats. Three House Democrats have introduced legislation to bar lawmakers from trading individual stocks.

House Democrats Push For Tougher Oversight Of Regulators’ Conflicts Of Interest

Reprinted with permission from ProPublica.

A group of House Democrats introduced a bill on Wednesday that would require federal officials to disclose any potential conflicts of interest before they implement significant changes in U.S. regulations.

The lawmakers said the legislation is intended to alert the public if those involved in the decisions, including the president and his top advisers, would personally profit from revising or replacing the rules.

“President Trump ran and campaigned on this idea of draining the swamp,” said the bill’s author, Rep. David Cicilline, D-R.I. “We see, in fact, he has filled the swamp with people who have deep business interests and may be using their positions in the government to advance their financial interests.”

Among those who would have to project how much they would personally benefit from any particular regulatory changes are members of the new deregulation teams Trump has installed at federal agencies. The groups are tasked with weakening or eliminating government rules found to be overly burdensome for businesses.

The Congress members cited a recent investigation by ProPublica and The New York Times revealing that members of these deregulation teams have deep industry ties and are reviewing regulations their previous employers sought to weaken or kill. Appointees include lawyers who represented businesses in cases against government regulators, staff members of political groups raising so-called dark money and employees of industry-funded organizations opposed to environmental rules. At least four were registered to lobby the agencies they now work for and at least two may be positioned to profit if certain regulations are undone.

Federal agencies have defended their deregulation teams, saying appointees are adhering to strict ethics rules and generally avoiding topics that would narrowly affect recent former employers. The Trump administration has said its deregulatory push is necessary because similar reviews of existing rules by past administrations were not rigorous enough.

Cicilline’s bill, co-sponsored by Reps. John Conyers, Raul Grijalva, Lloyd Doggett, Gerry Connolly and Peter DeFazio — all Democrats — would require “an assessment and quantification” of the conflicts of interest for any major regulatory action. The report would disclose any possible personal benefit for the president, his senior advisers and members of the deregulation teams, along with the heads of the agency issuing the rule, the Office of Management and Budget and the Office of Information and Regulatory Affairs.

Though ProPublica and the Times have identified nearly three dozen deregulation team members with potential conflicts, a full vetting of industry connections has been difficult because some agencies have declined to provide information about the appointees — in many cases, not even their names.

Cicilline was among a group of Congress members who wrote a letter to the White House in August calling on the administration to release the names of all deregulation team members as well as documents relating to their potential conflicts of interest.

He said they have received no response. “This sadly has become the practice of this administration to routinely ignore members of Congress. That’s very disturbing to me and other members,” Cicilline said.

The congressman does not yet have any Republican support for his legislation, which would be needed for it to pass. “One would hope that shining light on this would be a bipartisan issue,” Cicilline said. Members of the House Republican leadership didn’t immediately return requests for comment.

The deregulation teams are part of Trump’s push to cut red tape across government, and have created a new avenue of influence for industries trying to kill rules they say hurt profits, depress job creation and raise prices. Environmental, consumer and other liberal groups have argued such regulations protect the public, keeping drinking water clean and roads safe, for example.

Among the appointees are Byron Brown, who is a member of the deregulation task force at the Environmental Protection Agency. He is married to a senior government affairs manager for the Hess Corporation, an oil and gas company regulated by the EPA.

The agency has declined to say whether Brown or his wife own shares in Hess, though an agency ethics official said Brown had recused himself from evaluating regulations affecting the company. The agency declined to say whether Brown would also recuse himself from issues affecting the American Petroleum Institute, where his wife’s company is a member. The association has lobbied to ease Obama-era natural gas rules, complaining in a recent letter to Brown’s team about an “unprecedented level of federal regulatory actions targeting our industry.”

Before she led the deregulation team at the Department of Housing and Urban Development, Maren Kasper was a director at Roofstock, an online marketplace for investors in single-family rental properties. Financial disclosure records show that Kasper owned a stake in the company worth up to $50,000.

Changes at HUD could increase investor interest in rental homes, affecting a company like Roofstock. The agency, for example, oversees the federal government’s Section 8 subsidies program for low-income renters. Ethics officials allowed Kasper to keep her stake during her short tenure on the task force, but she pledged not to take actions that would affect the company.

Header image: Rep. David Cicilline, D-R.I. (Bill Clark/Roll Call/Via Getty Images)

Tom Price’s $150,000-Plus Stock Windfall

Reprinted with permission from ProPublica.

 

Tom Price doesn’t appear to have suffered a financial hit when he fulfilled his pledge to sell off some assets as the new head of the Department of Health and Human Services.

On one transaction alone, Price made a profit of more than $150,000 on shares he held in a tiny Australian biotech company, according to his financial disclosures. His purchases of that stock, which came while he was serving in Congress, were the subject of particular scrutiny during his confirmation hearings in January. He was one of a handful of U.S. investors allowed to buy discounted shares in Innate Immunotherapeutics, which was working on an experimental multiple sclerosis drug.

Price invested about $10,000 in 2015 and another $50,000 to $100,000 in the company last summer, records show. He appears to have sold all those shares on two days in February, reaping between $265,000 and $550,000, according to forms he filed last month with the federal Office of Government Ethics. Filers are required to show only a range of the value of any sold or purchased stock, meaning that his overall profit could range from $154,983 to as much as $489,981.

The forms show Price also sold shares worth a total of tens of thousands of dollars in about three dozen other companies involved in businesses including health care, technology and airlines.

While he served in Congress, Price reported trading hundreds of thousands of dollars’ worth of shares in health-related companies while he voted on and sponsored legislation affecting the industry. He testified at his HHS confirmation hearings that his trades were lawful and transparent. Democrats accused him of potentially using his office to enrich himself. ProPublica previously reported that his trading is said to have been under investigation by federal prosecutors.

Price testified during his confirmation hearings that the discounted shares in Innate Immunotherapeutics “were available to every single individual that was an investor at the time.”

But, as The Wall Street Journal reported, the discounted shares were only available to American investors by invitation. Price learned of the company from his friend Rep. Chris Collins, R-N.Y., a company director and its largest shareholder. Collins told the Journal he invited Price to buy, and Price did so in two purchases, one at 18 cents a share and another at 26 cents a share during the summer of 2016. When Price sold off his investment, Innate was trading at around 90 cents.

Before he was confirmed, Price pledged to sell off his holdings.

Price did not respond to a request for an interview.

Price has said before that his trades while he was in Congress were promptly disclosed, as required by law. He has rejected allegations that he ran afoul of insider-trading rules or used his position as chair of the powerful House Budget Committee to get information or opportunities not available to normal investors.

Last week, ProPublica reported that on the same day his stockbroker bought him up to $90,000 of stock in six pharmaceutical companies, Price arranged to call a top U.S. health official, seeking to scuttle a controversial rule that could have hurt the firms’ profits and driven down their share prices.

 

Tom Price Intervened On Rule That Would Hurt Drug Profits, The Same Day He Acquired Drug Stock

Reprinted with permission from ProPublica.

On the same day the stockbroker for then-Georgia Congressman Tom Price bought him up to $90,000 of stock in six pharmaceutical companies last year, Price arranged to call a top U.S. health official, seeking to scuttle a controversial rule that could have hurt the firms’ profits and driven down their share prices, records obtained by ProPublica show.

Stock trades made by Price while he served in Congress came under scrutiny at his confirmation hearings to become President Trump’s secretary of health and human services. The lawmaker, a physician, traded hundreds of thousands of dollars’ worth of shares in health-related companies while he voted on and sponsored legislation affecting the industry, but Price has said his broker acted on his behalf without his involvement or knowledge. ProPublica previously reported that his trading is said to have been under investigation by federal prosecutors.

On March 17, 2016, Price’s broker purchased shares worth between $1,000 and $15,000 each in Eli Lilly, Amgen, Bristol-Meyers Squibb, McKesson, Pfizer and Biogen. Previous reports have noted that, a month later, Price was among lawmakers from both parties who signed onto a bill that would have blocked a rule proposed by the Obama administration, which was intended to remove the incentive for doctors to prescribe expensive drugs that don’t necessarily improve patient outcomes.

What hasn’t been previously known is Price’s personal appeal to the Centers for Medicare & Medicaid Services about the rule, called the Medicare Part B Drug Payment Model.

The same day as the stock trade, Price’s legislative aide, Carla DiBlasio, emailed health officials to follow up on a request she had made to set up a call with Patrick Conway, the agency’s chief medical officer. In her earlier emails, DiBlasio said the call would focus on payments for joint replacement procedures. But that day, she mentioned a new issue.

“Chairman Price may briefly bring up … his concerns about the new Part B drug demo, as well,” she wrote. “Congressman Price really appreciates the opportunity to have an open conversation with Dr. Conway, so we really appreciate you keeping the lines of communication open.”

The call was scheduled for the following week, according to the emails.

An HHS spokesman didn’t respond to a request for comment from Price. DiBlasio and Conway didn’t respond to questions about the phone call.

The proposed rule drew wide opposition from members of both parties as well as industry lobbyists and some patient advocacy groups. It was meant to change a system under which the government reimburses doctors the average sales price for drugs administered in their offices or inside clinics, along with a 6 percent bonus. Some health analysts say that bonus encourages doctors to pad their profits by selecting more expensive treatments.

Critics argued that the rule might cause Medicare enrollees to lose access to lifesaving drugs. Lawmakers worried the federal government was potentially endangering patients and turning them into guinea pigs in a wide-scale experiment in cost savings.

However, supporters of the rule said the experiment in payments was the kind of drastic action needed to rein in soaring health costs. “We are actively reforming every other aspect of our health-care system to pay for value except pharmaceuticals,” Rep. Jan Schakowsky (D-IL), said at the time. “Drug manufacturers are the only entity that can charge Medicare anything they want.”

The six companies that Price invested in were steadfastly opposed to the rule. McKesson formally warned investors in a Securities and Exchange Commission filing that such a change could hurt share prices. The firms lobbied the government to kill the plan.

And at two of the six companies Price invested in, people who used to work for the congressman were part of the lobbying effort.

Price’s former chief of staff, Matt McGinley, lobbied House members for Amgen, disclosure records show. Another former Price aide, Keagan Lenihan, lobbied on behalf of McKesson, where she was director of government relations at the time. Lenihan has since reunited with Price, returning to government to work as a senior adviser to her old boss at HHS.

Neither McGinley nor Lenihan responded to requests for comment.

Although Price said he wasn’t aware of his broker’s trades at the time they were made, he would have learned of his holdings no later than April 2016 when he signed and filed his latest financial disclosure forms. In earlier disclosures, Price signed forms listing his other health-related holdings, which included some drug stocks.

Price’s personal intervention raises more questions about the overlap between his investments and his work as a member of Congress.

According to House ethics guidelines, “contacting an executive branch agency” represents “a degree of advocacy above and beyond that involved in voting” on legislation where a financial conflict of interest may exist.

“Such actions may implicate the rules and standards … that prohibit the use of one‘s official position for personal gain,” the guidelines state. “Whenever a Member is considering taking any such action on a matter that may affect his or her personal financial interests, the Member should first contact the Standards Committee for guidance.”

Tom Rust, chief counsel for the House Ethics Committee, declined to comment, saying any consultations with members of Congress are confidential.

In December, after Trump was elected and named Price as his choice to lead HHS, Obama administration health officials scrapped their plan to change the drug reimbursement system. “The complexity of the issues and the limited time available led to the decision not to finalize the rule at this time,” a spokesman said.