Just as the House Republican bill to slash much of the Affordable Care Act moved forward, Rep. Mike Conaway, a Texas Republican and member of Speaker Paul Ryan’s leadership team, added a health insurance company to his portfolio.
An account owned by Conaway’s wife made two purchases of UnitedHealth stock, worth as much as $30,000, on March 24th, the day the legislation advanced in the House Rules Committee, according to disclosures. The exact value of Conaway’s investment isn’t clear, given that congressional ethics forms only show a range of amounts, and Conaway’s office did not respond to a request for comment.
It was a savvy move. Health industry stocks, including insurance giants like UnitedHealth, have surged as Republicans move forward with their repeal effort, which rolls back broad taxes on health care firms while loosening consumer regulations which prevent insurance companies from denying coverage for medical treatment. UnitedHealth has gained nearly 7 percent in value since March 24.
He wasn’t the only one. As the health care system overhaul advanced last month on the other side of Capitol Hill, Republican Sen. James Inhofe of Oklahoma purchased between $50,000 to $100,000 in UnitedHealth stock.
“Sen. Inhofe has a financial advisor who makes transactions on his behalf and these transactions are disclosed as required by the STOCK Act,” Nicole Hage, Inhofe’s spokesperson, told The Intercept. “The transaction you reference was routine and made without the Senator’s prior knowledge or consultation.”
The issue of insider political trading, with members and staff buying and selling stock using privileged information, has continued to plague Congress. It gained national prominence during the confirmation hearings for Health and Human Services Secretary Tom Price, when it was revealed that the Georgia Republican had bought shares in Innate Immunotherapeutics, a relatively obscure Australian biotechnology firm, while legislating on policies that could have impacted the firm’s performance.
The stock advice had been passed to Price from Rep. Chris Collins, R-N.Y., a board member for Innate Immunotherapeutics, and was shared with a number of other GOP lawmakers, who also invested in the firm. Conaway, records show, bought shares in the company a week after Price.
Conaway, who serves as a GOP deputy whip in the House, has a long record of investing in firms that coincide with his official duties. Politico reported that Conaway’s wife purchased stock in a nuclear firm just after Conaway sponsored a bill to deal with nuclear waste storage in his district. The firm stood to directly benefit from the legislation.
Some of the biggest controversies stem from the revelation that during the 2008 financial crisis, multiple lawmakers from both parties rearranged their financial portfolios to avoid heavy losses. In one case, former Rep. Spencer Baucus, R-Ala., used confidential meetings about the unfolding bank crisis to make special trades designed to increase in value as the stock market plummeted.
Congress eventually acted with the STOCK Act, legislation designed to curb insider trading abuses. But the law was quickly watered down with amendments, and some provisions of it were later repealed. As we’ve reported, the House of Representatives has actively fought efforts to enforce the law after the Securities and Exchange Commission attempted to investigate one congressional staffer accused of passing health care information to a set of hedge funds.
Update: July 6, 2017
This piece was updated with a response from Sen. Jim Inhofe’s spokesperson.