Ethics Observations On The Rep. Chris Collins Insider Trading Indictment

Three-term GOP congressman Chris Collins was indicted for insider trading after prosecutors determined that after Innate Immunotherapeutics  alerted him to the failure of company’s clinical drug trials for a promising multiple sclerosis drug, Collins tipped off his son, allowing him and others to  save hundreds of thousands of dollars by selling their stock in the firm before the news was made public. Now Collins faces prison time if convicted.

 Collins was a member of the company’s board until May of this year, and at one point was its largest shareholder.

Speaker of the House Paul Ryan has stripped Collins of his seat on the Energy and Commerce Committee and asked the House Ethics Committee to investigate the allegations of insider trading. Collins has ended his re-election bid, but maintains that he is innocent. Such statements are like the puzzle about the White Foot and Black Foot tribes that look and sound identical but have one difference: the White Feet always lie, and the Black Feet always tell the truth. If you ask a member of either tribe, “Are you a truthful Black Foot or a lying White Foot?”, you will always get the same answer no matter what tribe the individual belongs to: “I am a truthful Black Foot!” And whether an indicted Congressman is guilty or innocent, he will always say, as Collins did, that the charges are “meritless” and that he will fight them to have his “good name cleared of any wrongdoing.”

Until the plea deal.

Collins’s involvement with Innate dates back all the way to 2005, before he ran for Congress. He organized support from wealthy friends and neighbors,  many of whom would later become his political donors,  to help bail out the company, which was flailing at the time. In addition to Innate Immunotherapeutics,  Collins has held leadership roles in other biotech companies.  Until his indictment, he was chairman of the board of directors of ZeptoMetrix, a private lab company based in Buffalo that he co-founded. That one has received millions of dollars in federal contracts, according to government records.

Collins reported owning between $25 million and $50 million in shares of  ZeptoMetrix. In June, he sold about a million dollars of stock in Chembio Diagnostics, a medical tests and equipment manufacturer, according to his ethics disclosure forms.

The congressional ethics office found last summer that  Collins may have violated ethics rules by asking the National Institutes of Health for help with the design of Innate’s now-failed clinical trial.

Observations: Continue reading

Morning Ethics Warm-Up, 9/30/2017: The Price Is Wrong, Traveling Men The Trump Cabinet,And The Return Of “Will & Grace”

Good Morning!

1 Under pressure from President Trump, who shouldn’t have appointed him in the first place, Health and Human Services Secretary Tom Price resigned  yesterday. He, along with other Trump officials, was under Congressional scrutiny for using expensive charter and military flights unnecessarily, costing taxpayers at a time when the administration is supposedly watching the budget. Under Federal Travel Regulations, officials are told to take the “most expeditious” means of transportation which “by no means should include personal use,” Chairman Trey Gowdy and ranking member Elijah Cummings had written to  letter to Price, 23 other agency heads, and the White House. Price has spent more than $400,000 on taxpayer-funded private jet travel since May.

Price’s abuses included a $17,760 round trip on a charter jet to Nashville, where the HHS Secretary stayed less than six hours, including lunch with his son. The day before he resigned and a day after the President publicly expressed displeasure over the travel abuses, Price had apologized. “Today, I will write a personal check to the U.S. Treasury for the expenses of my travel on private charter planes. The taxpayers won’t pay a dime for my seat on those planes,” Price said in a statement, adding that he will no longer take private planes while serving as Secretary. “No exceptions.” This was deceit, however. The repayment was just $51,887.31, a fraction of the true cost to the government. That was, as Price said, the cost of  the secretary’s “seats” if had flown commercial.

Price is not the only Trump official whose travel practices and expenditures raise at least the appearance of impropriety, but if one had to be the symbolic whipping boy, Price was a great choice. He was also my choice back in January for “Trump Cabinet Appointee Most Likely To Make Money Off Of His Position.” In a post expressing disgust at Price’s appointment, I wrote,

“Last year, Price purchased shares in Zimmer Biomet, a medical device manufacturer right before he introduced  legislation that would have directly benefited the company. Price bought between $1,001 to $15,000 worth of shares in the company last March, and then, less than a week after the transaction,  introduced the HIP Act…to delay until 2018 a regulation that industry analysts believed  would significantly hurt Zimmer Biomet, one of two companies most affected by a regulation that limits payments for joint implant procedures. Not only did Price have a financial stake in the regulation he tried to stall,but after Price introduced  his bill, Zimmer Biomet’s political action committee donated to the Georgia congressman’s reelection campaign.”

2. Losing one arrogant, travel-abusing high official may not be enough. It’s an interesting problem: is it fair to make one miscreant the focus of abuses that involve many? No; it’s also not practical, and therefore not responsible, to behead a significant portion of the Executive Branch because oversight was lax and an unethical culture had been allowed to take hold. I think Veterans Affairs Secretary David Shulkin would be an excellent and deserving candidate to join Price as metaphorical head on a pike.

Shulkin took a 10-day trip to Europe this past July, for meetings with Danish and British officials about veterans’ health issues. He treated much of the trip as a vacation, taking in a Wimbledon championship tennis match, touring Westminster Abbey and taking a cruise on the Thames with his wife, whose expenses were also paid for by you and me. The federal government paid for the commercial flights for Shulkin and his wife, and provided a per-diem reimbursement for their meals and other expenses. How did Mrs. Shulkin rank reimbursements and taxpayer-funded airfare? A VA spokesman explained that she was traveling on “approved invitational orders” and had “temporary duty” travel expenses.

In other words: “Huminahuminahumina…” Continue reading

Why Health and Human Services Nominee Price’s Smoking Gun Ethics Breaches Won’t Disqualify Him

smoking-gun

There was good news on the Trump Administration Ethics Train Wreck, still just pulling out of the station. Despite the ethically-challenged reaction fro the Trump transition team when it was revealed that Monica Crowley had plagiarized in her latest book, somebody, somewhere, persuaded the conservative radio talk-show host to resign her new White House post. Good. But as many—most?—predicted, the muck is just beginning to bubble to the surface.

CNN reports that Rep. Tom Price,Trump’s nominee for Secretary of Health and Human Services who will have much of the responsibility for dismantling Obamacare  without triggering a health system crash, appears to have engaged in a flagrant instance of using his position for financial gain.  Last year, Price purchased shares in Zimmer Biomet, a medical device manufacturer [Full disclosure: I have one of their artificial hip joints, setting off metal detectors at airports all over the world] right before he introduced  legislation that would have directly benefited the company.

Price bought between $1,001 to $15,000 worth of shares in the company last March, and then, less than a week after the transaction,  introduced the HIP Act (Clever!) to delay until 2018 a regulation that industry analysts believed  would significantly hurt Zimmer Biomet, one of two companies most affected by a regulation that limits payments for joint implant procedures. Not only did Price have a financial stake in the regulation he tried to stall,but after Price introduced  his bill, Zimmer Biomet’s political action committee donated to the Georgia congressman’s reelection campaign.

Merely a coincidence, I’m sure.

Price is scheduled to appear before the Senate Health Committee this week, and the Senate Finance Committee later. He should withdraw, or failing that, Trump should pull the nomination. Price’s purchase of the Zimmer Biomet shares isn’t the first time he’s used inside information (the inside information being “I’m going to propose a bill”) to buy shares in a company. The Wall Street Journal reported last month that he traded roughly $300,000 in shares over the past four years in health companies while pursuing legislation that could affect their bottom lines.

Yeccch. Continue reading

The Seventh Annual Ethics Alarms Awards, Part II: The Worst of Ethics 2015

Donald and Hillary

Ethics Corrupters of the Year

(Awarded to the unethical public figure whose prominence, popularity and success most corrupts the public’s ethical values)

A Tie: Hillary Clinton and Donald Trump.  Nobody else is close.

I’m sorry that these two are so dominating the awards. They also dominated the posts last year. If they dominate the awards next year, God Save The United States of America…

Double Standard Of The Year

The deference accorded to anti-white protesters on dozens of college campuses, not just by spineless administrators but much of the news media. Similar protests, conduct and rhetoric by white students would be immediately condemned for what it would be: blatant racism.

 Lie of the Year

Hands Up! Don’t shoot! The lie was uttered in 2014, but acquired new status after the Justice Department unexpectedly and definitively determined that the evidence did not support the inflammatory myth that Mike Brown was shot dead in Ferguson while trying to surrender to Officer Wilson. Never mind: the lie is part of the manifesto of Black Lives Matter and similar groups; it is still alluded to by activists and shameless politicians; it still divides the nation and focuses hate on police departments; and it has contributed to getting police officers killed while making communities more vulnerable to crime. It may be the Lie of the Decade.

Uncivil U.S. Official of the Year

Justice Antonin Scalia, who crossed all lines of judicial restraint, collegiality and civility when he excoriated his colleague, Justice Kennedy, who was the fifth vote in the majority of SCOTUS’s ruling  that same-sex marriage was a Constitutional right no state could deny, with this comment in a footnote:

“If, even as the price to be paid for a fifth vote, I ever joined an opinion for the Court that began: ‘The Constitution promises liberty to all within its reach, a liberty that includes certain specific rights that allow persons, within a lawful realm, to define and express their identity,’ I would hide my head in a bag. The Supreme Court of the United States has descended from the disciplined legal reasoning of John Marshall and Joseph Story to the mystical aphorisms of the fortune cookie.”

——U.S. Supreme Court Justice Scalia,

 

The Jesse Jackson Award 

(For the Year’s Worst Amateur Diplomat)

Barack Obama.  I know, this is snarkier than I like to be in these awards, but the signature diplomatic measure of the past year, the astounding, one-sided, dangerous and Munich-like deal with Iran, could only be the product of an ideological tyro placing wishes and hopes over diplomatic responsibility, and not for the first time. For most Presidents, trading dangerous terrorists for a deserter would be nadir. History has seen many tragedies seeded by world leaders with no diplomatic skills: the disastrous Treaty of Versailles,  Potsdam, and the treaty that this one most resembles, negotiated by the hapless Neville Chamberlain. We can only hope that the worst case scenario doesn’t materialize, but if it does not, it will be moral luck.

Most Unethical Sports League

New England Patriots quarterback Tom Brady speaks at Salem State University in Salem, Massachusetts, May 7, 2015. REUTERS/Charles Krupa/Pool ORG XMIT: BKS06

The NFL, for the third year in a row. “Concussion,” Tom Brady, Deflategate, more evidence that NFL players are slowly killing themselves with brain damage, Johnny Manziel.  What a great sport pro football is.

Sports Cheat of the Year

Tom Brady, New England Patriots ball-deflating quarterback.  Brady eventually avoided punishment because the NFL botched both its investigation and its imposition of penalties, but his smirking, cynical comments about the incident made it clear that he thinks cheating is no big deal, and most of his fans agree.

Not surprisingly, Brady supports Donald Trump.

Unethical Lawyers of the Year

Law Firm Division:  Lawyers Stephen Diaco, Robert Adams and Adam Filthaut of the Florida firm Adams & Diaco were found to have “maliciously” set up the drunken-driving arrest of their opposing counsel in a  high-profile defamation trial. The plot involved a comely paralegal and a cooperative DUI cop. Last I checked, it looked like all three lawyers would be disbarred for life.

Scary Lawyer Division: California lawyer Douglas Crawford  held a can of pepper spray a yard from the face of the opposing lawyer saying, “I will pepper-spray you if you get out of hand.” Then the lawyer pointed a stun gun at Traver’s head and said, “If that doesn’t quell you, this is a flashlight that turns into a stun gun.” To show he wasn’t kidding, Crawford discharged the stun gun the startled lawyer’s face.

Hard-working Lawyer Division: Massachusetts lawyer,  Karen Andrade, was  charged with prostitution after a police investigated a report by a suspicious neighbor and  found online reviews of both the lawyer’s legal services and her escort services

Celebrity Lawyer Division: Michael Cohen,  one of Donald Trump’s lawyers, told the Daily Beast that it was legally impossible for a man to rape his wife. He was only a couple of decades and many court cases behind on his research. That piece of legal scholarship came after he had threatened the website’s staff in language usually associated with loan sharks and pimps.

Unethical Prosecutor of the Year

Mosby

Baltimore’s City Attorney Marilyn Mosby
Continue reading

Congress’s Ongoing Insider Trading Scandal

insider_trading_ban

The best I can figure is that when the exposure of outrageous corruption will devastate power politicians in both parties, neither party, nor their partisan herds, nor their lackey journalist allies, see it as advantageous to look under that rock. Does anyone have a better theory? Because the fact that almost all Senators and members of Congress, and often their staffs, enrich themselves using their knowledge of what laws are about to be passed, and the fact not only is nothing being done about it, but that most of the public doesn’t even know about it and no one is working very hard to tell them, is maddening.

The latest chapter is typical of the hypocrisy and dishonesty in this long-running ethics fiasco.

In 2012, Congress passed the STOCK Act, a bill that was supposed to stop insider trading for lawmakers and their staffs. Of course, the laws making insider trading illegal should have already stopped the practice, and the ethics rules prohibited it as well with such phrases as “conflicts of interest” and “appearance of impropriety.” Lawmakers aren’t supposed to break laws, you see. No, really. They’re not!
Continue reading

So Who Do We Trust To Fight Crony Capitalism?

Shut out of the last Iowa debate because of low poll numbers, earnest, honest, ethical, reasonable, intelligent and boring candidate Jon Huntsman gave his assessment of the event to ABC’s Christiane Amanpour, saying that the main issue facing the country was a trust deficit:

“The most important issue of all was not even touched upon and that is the deficit of trust we have in the United States, in fact it may have played right into the trust deficit. That is, nobody trusts Congress anymore. We need term limits in Congress, we need to close the revolving door that allows members of Congress to move right on into the lobbying profession. No one has trust anymore towards the executive branch, no one trusts Wall Street with the banks that are too big to fail. So I would argue that the issues that are most salient in our political dialogue today were not even touched upon last night…”

Huntsman is right. It was especially astounding that this issue wasn’t addressed in the debate (and that those crack moderators Diane Sawyer and George Stephanopoulos  didn’t mention it) after more than a month of Occupy Everywhere protests that sorta-kinda dealt with the trust issue (oh,  what a little focus could have wrought!)  and the recent “60 Minutes”  expose on insider trading by members of Congress. Also preceding the debate was this trust-buster: in July of 2008, Bush Treasury Secretary Hank Paulson held a meeting with select Wall Street fund managers and gave them advance notice of government action that they could use to make significant profits: Continue reading

Today’s Ethics Quiz: How Do You React To Congressional Insider Trading?

 

Gekko for Congress. He has what It takes...Insider trading experience!

An  study in the journal Business and Politics last week reported that the investments of members of the House of Representatives outperformed those of the average investor by 55 basis points per month, or 6 percent annually. It concluded that lawmakers are taking advantage of inside information to make significant profits, engaging in conduct that would send a Gordon Gekko or Martha Stewart to jail.

“We find strong evidence that members of the House have some type of non-public information which they use for personal gain,” the four researchers who authored  “Abnormal Returns From the Common Stock Investments of Members of the U.S. House of Representatives” wrote. Continue reading