As President-elect Donald Trump and his people lay waste to various media-government norms and standards, they now appear intent on defanging the retraction request. The Presidential Transition Team on Tuesday issued one such document that accused CNN of the following journalistic malpractice: “On January 16, 2017, CNN broadcast a story by Manu Raju, titled ‘First on CNN: Trump’s Cabinet pick invested in company, then introduced a bill to help it,’ which omitted facts and drew conclusions in an effort to attack President-Elect Donald Trump’s designee for Secretary of Health and Human Services, Dr. Tom Price.”
The piece, said the retraction request, was “blatantly false.” It was not.
Rep. Tom Price (R-Ga.) is Trump’s nominee to serve as the secretary of the Department of Health and Human Services. Price, however, has traded in medical stocks even though his post in the House involves health policy, as the Wall Street Journal has reported. The Journal found more than $300,000 in trading of “health-related companies over the past four years” as Price went about “sponsoring and advocating legislation that potentially could affect those companies’ stocks.” As we write this post, Price is being grilled at a Senate confirmation hearing that is touching on these matters.
Citing House records, CNN’s Raju earlier this week reported that last March, Price bought $1,001 to $15,000 worth of shares in Zimmer Biomet, a medical device company specializing in knee and hip implants. The purchase was followed less than a week later by Price’s introduction of the Healthy Inpatient Procedures (HIP) Act, which would delay implementation of a regulation affecting companies such as Zimmer Biomet. “This new, mandatory payment model handed down from CMS comes with tremendous risk and complexity for patients and health care providers. Rushing its implementation would be unreasonable and potentially detrimental to patients and their quality of care,” Price said in a statement. “At the very least, a delay in implementation is warranted to give all involved time to better assess, review, and weigh the impact and consequences of this proposal and more adequately prepare so patients are protected.” As Raju reported, Zimmer Biomet was among two companies that would have been most dramatically affected by the regulation that Price sought to delay.
And here’s the money-in-politics kicker to this story: After Price introduced the regulation-delaying bill, his reelection campaign received a contribution from the medical company’s political action committee.
In his initial response, Price spokesman Phil Blando didn’t address the specifics of the transaction: “Dr. Price takes his obligation to uphold the public trust very seriously,” Blando told CNN. “The Office of Government Ethics has completed an exhaustive review of Dr. Price’s financial holdings and just as Dr. Price was compliant with congressional disclosure rules, Dr. Price will comply fully with the recommendations put forward by the ethics office.”
Once CNN and Raju published the piece, however, the landscape shifted. As if shocked by the claims in the CNN story, Price’s people attempted to rebut the story on two fronts. First, Blando issued this statement: “Any effort to connect the introduction of Dr. Price’s legislation, co-sponsored with Democrats, to a campaign contribution is demonstrably false. Dr. Price is fully complying with the recommendations put forth by the Office of Government Ethics.” And second, “a Price aide” said that “Zimmer Biomet is included in a broker-directed account and that the stock was purchased without [Price’s] knowledge,” reads the story.
CNN updated Raju’s story with the fresh input from team Price. Key point: Raju noted in the article that he’d asked about a broker, though he received no reply on that point.
Based on the foregoing, the presidential transition team issued this statement:
On January 16, 2017, CNN broadcast a story by Manu Raju, titled “First on CNN: Trump’s Cabinet pick invested in company, then introduced a bill to help it”, which omitted facts and drew conclusions in an effort to attack President-Elect Donald Trump’s designee for Secretary of Health and Human Services, Dr. Tom Price.
The facts were available to CNN through House Financial Disclosure Filings. Mr. Price’s position on the Comprehensive Joint Replacement demonstration, which date back to fall 2015, is also a matter of public record.
The facts are:
• Dr. Tom Price has a diversified portfolio with Morgan Stanley in a broker-directed account. The portfolio includes both health care and non-health care related stocks.
• 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.
• 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.
• Dr. Price learned of the purchase of Zimmer Biomet on April 4, 2016, when his financial advisor sent him a list of trades to be disclosed on his House Periodic Transaction Report (PTR).
• Dr. Price submitted the PTR reflecting the March trades on April 15, 2016.
• Dr. Price began work on his legislative effort to delay the comprehensive joint replacement demonstration project in 2015 in order to preserve treatment options for patients. He sent a Dear Colleague letter regarding this effort on September 21, 2015.
The Presidential Transition Team requests that CNN retract this blatantly false story.
When was the last time that a retraction request so thoroughly confirmed a story? Far from a retraction-worthy effort, Raju’s work profiles as a model of careful and measured journalism. According to an email chain provided by CNN, Raju pressed Blando in an email that laid out every material detail, including a timeline of Price’s purchase of Zimmer Biomet shares; his subsequent introduction of the regulation-delaying legislation; his attempt in 2015 to influence the Centers for Medicare and Medicaid Services (CMS) on this regulation; the fact that Zimmer Biomet would take a big hit from the regulation; and the matter of the campaign donation.
Based on all that, Raju posed the following questions:
Why did Dr. Price purchase shares of Zimmer Biomet shortly before introducing the legislation?
Is he concerned about the appearance of insider trading?
Does he regret the move?
Did he use a broker to make the purchase? If so, who is his broker?
Instead of receiving discrete responses to those worthwhile questions, Raju got the blanket statement that answered none of them. Nor was this a rush job — Raju sent his questions to Blando last Thursday and didn’t publish the story until Monday.
This being the Trump era, this being CNN, this being a hard-nosed story — a huge amount of pressure is now being applied to the 24/7 news network. In addition to the retraction request from the transition team, two lawyers representing Price have sent a four-page letter to Richard Davis, the network’s executive vice president of news standards and practices. It attacks Raju’s reporting and appears to lay the groundwork for legal action. After seeking a retraction of the story, the letter argues that repetition of its reporting “can be treated as a knowing publication of false statements and as potentially defamatory communications.”
The argument from J. Randolph Evans and Benjamin P. Keane rests on two main pillars. “The truth of the matter is … that Dr. Price was involved in HIP Act development long before his financial advisor purchased Zimmer Biomet as part of his portfolio rebalancing on March 17, 2016.” That’s Pillar No. 1. However, an early version of the story shared with this blog by CNN notes that Price has been active on just this front over the past year and a half. Now for Pillar No. 2 in the letter: “Likewise, it is clear that Dr. Price introduced the bill itself long before he even learned that he held a stake in Zimmer Biomet on April 4, 2016.” The letter notes that the congressman’s publicly available disclosure form lists April 4, 2016, as the date on which he was notified of this purchase.
CNN should have made note of that detail in the original story, write Price’s attorneys. An updated version addresses the knowledge question.
The Erik Wemple Blog despises this form of non-engagement. A review of the facts shows that Raju invited Price & Co. to provide extensive and detailed feedback on all aspects of the timeline. He got blandness. Then, after CNN published a factual story, the subjects freaked out about mitigating facts that were omitted from the story. Is this the response of the drain-the-swamp crowd to enterprise reporting on congressional ethics?
As Raju reported, Price held onto his Zimmer Biomet stock even after April 4. In Wednesday’s confirmation hearing, Sen. Elizabeth Warren (D-Mass.) badgered Price on this whole matter, asking whether Price reprimanded or fired his broker after learning that she’d invested in a stock affected by Price’s legislative activities. “What I did was comply with the rules of the House,” responded Price.